A generic framework to understand and address the needs and requirements of the mobile payments process

1. Mobile Payments Framework
Review
Lakshmana Kattula
Enterprise/Solution Architect
vivalaks@gmail.com
June 2011

2. Mobile Payments Framework
Stakeholders Requirements Payment Solutions Technologies
Basis of Payment SMS
Simplicity & Usability
Consumers Bank Account
USSD
Universality
Credit Card
Merchants WAP
Interoperability
Mobile Bill
Phone based apps
Financial Services Security
Remote SIM based apps
Cost
Mobile Network Operator
Direct to Mobile Bill
NFC
Speed
Technology Vendors PR SMS
Cross border Dual Chip
SMS based apps
Payment Service Provider Mobile Wallet
Use Cases Peer to Peer
PKI
Security & Authentication Mobile Banking WAP or Mobile Web
Provider
Smartphone apps
Retail
Handset Manufacturer Evolution & Roadmap
Restaurant Proximity Paper
Regulatory Bodies
Contactless Electronic
Ticketing
Digital Goods In Store Mobile

3. Key Terms
• Mobile Payment - where a mobile phone is used to initiate, authorize and
confirm an exchange of financial value in return for goods and services
• Mobile Payment Provider - a logical entity which facilitates financial
transactions between mobile phone customers. Ex: mCheck, ngpay,
Obopay, PayMate

4. Market Context
Legal, Regulatory and
Social & Cultural
Standardization
Environment
Environment
mPayment Service
Providers
New ePayment Mobile Traditional Payment
Services Payment Services
Services
Consumer Power Merchant Power
Technological Commerce
Environment Environment

5. Stakeholders – Consumers
• Personalized service
• Minimal learning curve
• Trust, privacy and security
• Ubiquitous – anywhere, anytime and any currency
• Low or zero cost of usage
• Interoperability between different network operators, banks and devices
• Anonymity of payments like cash
• Person to person transfers

6. Stakeholders – Merchants
• Faster transaction time
• Low or zero cost in using the system
• Integration with existing payment systems
• High security
• Being able to customize the service
• Real time status of the mobile payment service

7. Stakeholders – Financial Services
• Network operator independent solutions
• Payment applications designed by the bank
• Exceptional branding opportunities for banks
• Better volumes in banking – more card payments and less cash
transactions
• Customer loyalty

8. Stakeholders – Telcos
• Generating new income by increase in traffic
• Increased Average Revenue Per User (ARPU) and reduced churn
(increased loyalty)
• Become an attractive partner to content providers

9. Stakeholders – Regulatory
Bodies/Government
• Revenue through taxation of m-payments
• Standards

10. Stakeholders – Technology Vendors
(Mobile Devices)
• Large market adoption with embedded mobile payment application
• Low time to market
• Increase in Average Revenue Per User (ARPU)

11. Requirements
1. Simplicity and Usability (No learning)
2. Universality (C2C, B2C, B2B, Micro, Macro)
3. Interoperability (standards and open)
4. Security, Privacy and Trust (hacking, etc)
5. Cost (existing systems)
6. Speed (customers and merchants)
7. Cross border payments (global)

12. Payment Solutions – Basis of
Payment
On the basis of payment (Lim, 2007)
1. Bank account based (bank account linked to
mobile number)
2. Credit card based (credit card linked to the
mobile number)
3. Telecommunication company billing based
(prepaid airtime, debit and postpaid
subscription, credit)

13. Payment Solutions – Remote or
Proximity

14. Technologies for Mobile Payments
GSM mobile phone may send or receive information (mobile data service)
through three possible channels – SMS, USSD or WAP/GPRS. The choice of
the channel influences the way m-payment Solutions are implemented.
1. SMS (store and forward, asynchronous)
2. USSD (session based, transactional)
3. WAP (GPRS packet switched data, MMS, email, web, etc)
Secondly, the m-payment client application may reside on the phone or else it
may reside in the subscriber identity module (SIM)
1. Phone based apps (J2ME, etc)
2. SIM based app (more secure!)
3. NFC (phones enabled with NFC)
4. Dual Chip (telephony SIM and payments chip card, preferred by banks)
5. Mobile Wallet (several customer accounts or credit cards stored)

15. Evolution & Roadmap
• Paper
• Electronic
• Mobile

16. Use Cases – A Generic Interaction
Model
Merchant
M-Payment Application
Service Provider
Mobile Phone Banks
Smartphone
Mobile Mobile
Wallet App
Network
Mobile Number
(SMS, USSD,
WAP) Account/Card
details
SIM Mobile (Customer,
Wallet App Merchant) Certifying Authority
Certificates

17. References
• http://www.mobilemarketingwatch.com/cate
gory/mobile-marketing/mobile-payments/
• http://www.mpf.org.in/
• Mobile Payments
http://www.slideshare.net/bcijmb/mobile-
payments-8127038