1. Copyright 2004: Cybergen Technologies Inc. Slide #1 end-to-end recharge & e-commerce transaction flow scenarios Telco/MSO Billing & Payment System (BPS) end-to-end recharge & e-commerce transaction flow scenarios Anthony Clark Business and Technology Analyst Cybergen Technologies Inc. Lombard, IL USA July 16 th, 2004

2. Copyright 2004: Cybergen Technologies Inc. Slide #2 Contents Purpose BPS e-Commerce Network-Level Architecture Recharge Scenarios –Cash: walk into Verizons office and pay cash –Prepaid card: buy card at a retail store, then later, phone in the recharge –Bank Card: Walk or phone in to Verizons office and give card number Enter card number into Verizons web site Call into BPS IVR and key in card number Using BPS Balance to Pay for Goods & Services (on the order of 10 to $20 per transaction) –Phone Calls –Short Messages –Internet Merchants –Pay-by-Phone Merchants (e.g., Movie Tickets) –Vending Machines Enter BPS account info into vending machine (key in or swipe card) Call Vending Machines IVR system ( solutions of this type may be in service in Europe) Call BPS –Bricks & Mortar Merchants (e.g., Cashier at a retail store) Enter BPS account info into Cash Register Peripheral (key in or swipe card) Call Merchants IVR system Call BPS Additional Issues to Consider –Human Factors –Infrastructure –Business Agreements Background Slides –eCASH transaction flow –PayPal transaction flow

3. Copyright 2004: Cybergen Technologies Inc. Slide #3 Purpose To give the highest-level end-to-end view of how e-commerce works (or should work) for Telco/MSO Billing & Payment Systems (BPSs). Notes: –I use company names such as Verizon, MoviePhone, and Mastercard for illustration purposes only. It is not implied that these services will actually be offered by these companies. Feel free to plug in your favorite company. I just felt that the charts are easier to understand with real company names vs. mobile operator or merchant. –In my research, I didnt find any end-to-end scenarios, so I had to reverse engineer some info based on marketing material or system specs.

4. Copyright 2004: Cybergen Technologies Inc. Slide #4 e-commerce network-level architecture LDAP eCASH Telco/MSO Billing & Payment System (account balances) Telco/MSO Billing & Payment System (account balances) Internet Verizons Bank ECMP Consumers Bank Card Bank Vending Machines Merchants Cash Register Merchants Web Server Merchants Web Server Internet? Merchants Web Site Merchants Bank Payment Processor Payment Processor Card System Association Card System Association Spend Recharge: Buy card & phone in Recharge: + walk in with cash or bank card + phone in with bank card + List of Prepaid Cards: status & balance

5. Copyright 2004: Cybergen Technologies Inc. Slide #5 Recharge with Cash Consumer walks into Verizons office with cash Pays cash to Agent Agent uses Billing & Payment System (BPS) account balance Cash is carried to Verizons bank

6. Copyright 2004: Cybergen Technologies Inc. Slide #6 Recharge with Prepaid Card Verizon sells prepaid cards to retailers Proceeds are deposited in Verizons bank Verizon maintains a list of sold (but deactivated) cards at the BPS Consumer walks into retail store and buys a prepaid card At the checkout counter, the cashier activates the card (thwarts shoplifters) how are cards activated? Somehow the cash register should contact the BPS to activate the card… After leaving the store, the consumer calls BPS (BPS has a phone number) and interacts with the BPS via IVR to setup a PIN etc.

7. Copyright 2004: Cybergen Technologies Inc. Slide #7 Walk-in or Call into Verizons Office Recharge with Credit Card (or any bank card) Walk-in or Call into Verizons Office Consumer walks in (or calls in) to Verizons office with a bank card Gives card number to agent Agent uses the usual merchant dial-in to Verizons bank to get authorization for the amount Verizons bank contacts consumers bank Funds are eventually transferred from consumers bank to Verizons bank Agent increases users BPS account balance.

8. Copyright 2004: Cybergen Technologies Inc. Slide #8 Call into BPS Recharge with Credit Card (or any bank card) Call into BPS Consumer calls BPS (BPS has a phone number) and interacts with the BPS via IVR. Requests recharge and gives bank card number. BPS must get authorization for the amount (and also settlement) from the consumers bank. Options are: –The usual retail store type dialup to Verizons bank –A new connection to Verizons bank (maybe via the internet) Verizons bank gets authorization (and settlement) from Consumers bank (possibly via an intermediary) BPS increases the account balance.

9. Copyright 2004: Cybergen Technologies Inc. Slide #9 Verizons Web Site Recharge with Credit Card (or any bank card) Verizons Web Site Consumer surfs to Verizons web site Logs into secure section to access account Brings up recharge form Fills in bank card info Website must get authorization for the amount (and also settlement) from the consumers bank. Options are: –The usual retail store type dialup to Verizons bank –A new connection to Verizons bank (maybe via the internet) Verizons bank gets authorization (and settlement) from consumers bank (possibly via an intermediary) Verizons bank tells Verizons web site that the transaction is complete Verizons web site tells the BPS to increase the account balance. Verizons web site informs consumer that the transaction is complete

10. Copyright 2004: Cybergen Technologies Inc. Slide #10 Pay for Phone Calls Ill skip discussing this flow since it is not part of e-commerce. Nor is it a recharge.

11. Copyright 2004: Cybergen Technologies Inc. Slide #11 Pay for Goods & Services from an Internet Merchant Consumer surfs to merchants web site Requests purchase and enters BPS account number & PIN. Note: Website must contact the BPS to decrease balance Website sends request via ECMP to eCASH eCASH forwards request to BPS BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to the internet merchants bank BPS sends ACK back to merchants website stating that the transaction is complete Website informs consumer that the transaction is complete

12. Copyright 2004: Cybergen Technologies Inc. Slide #12 Pay for Goods & Services from an automated pay-by-phone Merchant Note: I use a movie ticket example here Consumer calls the MoviePhone (444-FILM) IVR system Consumer touch tones in a movie ticket purchase request Consumer touch tones in BPS account number and PIN IVR system contacts BPS to decrease balance BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to MoviePhones bank BPS sends ACK back to MoviePhones IVR system stating that the transaction is complete MoviePhones IVR system informs consumer that the transaction is complete

13. Copyright 2004: Cybergen Technologies Inc. Slide #13 No phone needed Pay for Goods from an automated vending machine No phone needed Consumer walks up to a vending machine On the machine, consumer keys in purchase request On the machine, consumer keys in BPS account number and PIN Note: it may be faster to let the consumer swipe a card. (a Verizon issued BPS card? Or maybe this is the recharge card?) Vending machine contacts BPS to decrease balance. BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to vending machines bank BPS sends ACK back to vending machine stating that the transaction is complete Vending machine informs consumer that the transaction is complete and releases product

14. Copyright 2004: Cybergen Technologies Inc. Slide #14 phone is used (this type of service may already be in use in Europe) Pay for Goods from an automated vending machine phone is used (this type of service may already be in use in Europe) Consumer walks up to a vending machine Consumer calls vending machines IVR system. (phone number printed on the vending machine) Consumer touch tones in: –Machine number (if many machines use the same phone number) –Product number –BPS account number –PIN number IVR system contacts BPS to decrease balance. BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to vending machines bank BPS sends ACK back to vending machines IVR system stating that the transaction is complete IVR system sends a message to the vending machine (via internet? Wireless?) telling it to release the product IVR system informs consumer that the transaction is complete

15. Copyright 2004: Cybergen Technologies Inc. Slide #15 phone is used to call BPS Pay for Goods from an automated vending machine phone is used to call BPS Consumer walks up to a vending machine Consumer calls BPS. (BPS has a phone number) Consumer touch tones in: –Machine number –Product number –BPS account number –PIN number BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to vending machines bank BPS informs consumer that the transaction is complete BPS sends a message to the vending machine (via internet? Wireless?) telling it to release the product

16. Copyright 2004: Cybergen Technologies Inc. Slide #16 phone not needed Pay for Goods from a bricks & mortar merchant phone not needed Consumer walks up to cashier with shopping cart of products to be purchased Cashier rings up total price for shopping cart Consumer keys in BPS account number & PIN on the cash register peripheral Note: it may be faster to let the consumer swipe a card. (a Verizon issued BPS card? Or maybe this is the recharge card?) Cash register contacts BPS (via internet?) to decrease balance BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to merchants bank BPS sends a message to the cash register informing the cashier that the transaction is complete BPS sends ACK to consumer stating that the transaction is complete

17. Copyright 2004: Cybergen Technologies Inc. Slide #17 phone is used to call Merchants System Pay for Goods from a bricks & mortar merchant phone is used to call Merchants System Consumer walks up to cashier with shopping cart of products to be purchased Cashier rings up total price for shopping cart Consumer calls Merchants IVR system Consumer touch tones in: –Cash Register ID –BPS subscriber ID –PIN –Shopping cart price IVR system contacts BPS to decrease balance BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to merchants bank BPS sends ACK back to merchants IVR system stating that the transaction is complete IVR system sends a message to the cash register (via internet?) informing the cashier that the transaction is complete. IVR system informs consumer that the transaction is complete

18. Copyright 2004: Cybergen Technologies Inc. Slide #18 phone is used to call BPS Pay for Goods from a bricks & mortar merchant phone is used to call BPS Consumer walks up to cashier with shopping cart of products to be purchased Cashier rings up total price for shopping cart Consumer calls BPS (BPS has a phone number) Consumer touch tones in: –Merchant ID –Cash Register ID –BPS subscriber ID –PIN –Shopping cart price BPS decreases the balance BPS sends a message to Verizons bank to transfer funds to merchants bank BPS sends a message to the cash register informing the cashier that the transaction is complete BPS sends ACK to consumer stating that the transaction is complete

19. Copyright 2004: Cybergen Technologies Inc. Slide #19 Additional Issues to Consider Human Factors: –Some of the preceding consumer interactions are complex. Many consumers, especially those in the US, may not want to key in a lot of info into a cell phone to make small purchases… Voice recognition may not be accurate enough for financial transactions. Having a card to swipe may help for face-to-face purchases. Another solution may be needed for phone-in purchases. Infrastructure: –This is not a simple add-on to the existing network. Modifications and/or replacements may be needed for Vending Machines, Cash Registers, Web Servers, eCASH, and IVR systems. These changes are needed to allow these systems to communicate with the Telco Payment System. –There may be internal network changes needed to enable the inter working of the above endpoints. Business Agreements: –Agreements (including sharing of some consumer data) among the owners of the above endpoints (e.g., Vending Machines) may be needed to enable the operation of this e-commerce network.

20. Copyright 2004: Cybergen Technologies Inc. Slide #20 Background Slides

21. Copyright 2004: Cybergen Technologies Inc. Slide #21 Animation (please view in slideshow mode) (also see note pages) eCASH Transaction Flow? Animation (please view in slideshow mode) (also see note pages) eCASH Internet Verizons Bank ECMP Consumers Bank Card Bank Vending Machines Merchants Cash Register Merchants Web Server Merchants Web Server Internet? Merchants Web Site Merchants Bank Payment Processor Payment Processor Card System Association Card System Association Spend Recharge: Buy card & phone in Recharge: + walk in with cash or bank card + phone in with bank card 6b 3 45 6a2 6c 1 LDAP Telco/MSO Billing & Payment System (account balances) Telco/MSO Billing & Payment System (account balances) + List of Prepaid Cards: status & balance

22. Copyright 2004: Cybergen Technologies Inc. Slide #22 Animation (please view in slideshow mode) PayPal Transaction Flow? Animation (please view in slideshow mode) eCASH Internet Consumer As Bank Account ? ECMP Consumer Bs Bank Account Consumer B Transaction Flow: Web Server e-mail via web site Transaction processor Web Server e-mail via web site Transaction processor Consumer Bs PayPal Account Consumer Bs PayPal Account Consumer As PayPal Account Consumer As PayPal Account Consumer A PayPal: + e-mail payments from consumer to consumer + used by 50% of eBay transactions + a free service + Users save the 3% or so credit card transaction fee + Paypal makes money on the float. (i.e., they dont pay interest immediately) + Recharge PayPal Account + Withdraw funds from PayPal Account + Move $20 to from Bs account to As account + transfer funds + tell A that he has $20 + e-mail to A you have $20 + e-mail $20 to A