Transcript Mobile Payments 2004 - Carnegie Mellon University

Electronic Payment Systems
20-763
Lecture 13
Mobile Payments,
Virtual Money
20-763 ELECTRONIC PAYMENT SYSTEMS
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Mobile Payment Players
User
Network
Operator
Financial
Institution
Content
Provider/
Merchant
Mobile Payment Issues
User
• Security
• Privacy
• Ease of Use
• Devices
Network
Operator
• Open
Standards
• Interoperability
• Roaming
Financial
Institution
Content
Provider/
Merchant
• Authentication
• Getting Paid
• Integrity
• User adoption
• Non-repudiation • Low Cost
• Fraud reduction
Issues
SOURCE: ARVANI GROUP
Current Business Models
Card based (Visa, MC)
 Carrier based (DoCoMo)
 Third party (PayBox)

SOURCE: ARVANI GROUP
Mobile Card Systems
MOTOROLA P7389
TRIBAND WAP PHONE
WITH SMARTCARD READER
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Mobile EMV Chip Debit/Credit
Voice or IP Browsing &
Offer Request
Issuing
Bank
Wallet forwards
address details
Merchant
Clearing &
Settlement
WAP, i-Mode
Merchant Offer
Shipment
Confirmation
OPTION 1:
Multi-app:
SIM + EMV
(CEC)
Gateway
Wallet
Server
SET or
SSL/TLS
Purchase Request
Acquiring
Payment
Engine
Acquiring
Bank
Authorisation
Request / Response
Option 2: Dual
slot phone with
full size EMV
M/CHIP transaction with
ARQC and ARPC / ARC
data classed as “Card
Present” Transaction
SOURCE: MAOSCO
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Wireless Card Authorization
SOURCE: SAMSUNG
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Mobile Phone Future
Millions
Projected
cellular
subscribers
More handsets than PCs
connected to the Internet
by the end of 2003 !
Projected Web
handsets
Projected PCs connected
to the Internet
1996
1997
1998
1999
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2001
2002
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2003
2004
2005
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Mobile Payment Population Growth
SOURCE: CELENT
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Paybox
paybox
2
paybox connects
transaction partners
and rings consumer
on mobile phone
1
Consumer has goods in shopping
basket and selects “paybox - pay with
mobile phone“ on website
4
...entering the
paybox-PIN on the
mobile phone
5 Clearing&
settlement is done
via electronic
direct debit
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3
Consumer
authorises the
payment to the
Internet shop
by...
SPRING 2004
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SOURCE: PAYBOX NORDIC AB
Paybox Combines Networks
Payment
Space
Authorization Space
Banking Network
GSM Network
PAYMENT MADE THROUGH
BANKING NETWORK
AUTHENTICATION AND
AUTHORIZATION MADE
OVER GSM NETWORK
Transaction
Space
Internet
TRANSACTION TRIGGERED
OVER THE INTERNET
•
•
•
•
•
works with any mobile phone
any network provider
supports WAP via GPRS or UMTS
high taxicab penetration
6% of all B2C in Germany
SOURCE: PAYBOX NORDIC AB
20-763 ELECTRONIC PAYMENT SYSTEMS
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paybox: Payment Procedure
paybox
3. Call customers mobile phone
2. Send phone # + amount
4. Confirm recipient + amount (PIN)
5. Confirm payment
1. Send phone number
Customer
Vendor
6. Ship goods
SOURCE: ANDREAS KUNZ
Paybox Features
• Payment authentication by mobile phone, relies on
SIM identification and GSM encryption
• Started in May 2000 in Germany, now also
operational in Austria, Spain and Sweden with more
to come (e.g. Britain)
• 50% owned by Deutsche Bank
• Amounts: starting at about 1€
• Transfer to other mobile phone (1-2% or 25 cent
fees) or bank account possible
• Offline shopping possible
20-763 ELECTRONIC PAYMENT SYSTEMS
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Paybox Cross-Border Mobile Payments
Consumer
Merchant
Provision of Goods and Services
Purchase
PIN
authorization
Call on GSM network
Paybox:
Transaction Instruction Engine
Transaction
Request and
Confirmation
via EDI
Deutsche Bank´s Network
Money Transaction
Consumer
Account
at ANY bank
in ANY country
Direct Debit
Clearing System
Crediting
Merchant
Account
at ANY bank
in ANY country
SOURCE: PAYBOX
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AsiaPay PayDollar
• PayDollar Mobipay
– supports iPaq or Palm
• Bank cards
• PayDollar Direct (peer-to-peer email)
• PayDollar PPS – real-time online debit payments
– DEMO
SOURCE: PAYDOLLAR
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Vending
Machine
Mobipay
OR
Internet
Merchant
Mobipay
System
with Access
Node router
Product .....:
REF. 1234
WEB
WEB
2
Processor
+Issuer/
Acquirer
8
1
4
5
3
GSM
4
7
+
6
8
REF:REF:
))))Delivery

01021234
01021234
REF ptas
1234
1500
OPERATOR
Store
Xx
Store
NETWORK
Alternative:
+ PINPIN:OK
12345
-----
4. Data validation
1. User chooses Mobipay payment
5. PIN request
method on merchant site
2. Merchant sends unique Mobipay 6. PIN response
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PAYMENT SYSTEMS
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2004
MICHAEL I. SHAMOS
reference asociated
with amount
User
Authorisation
3. User sends reference (+ PIN)
8. Confirmation
If PIN
not
entered
directly
International Mobipay
Principle: Use existing international payment infrastructure
7
Current international
card infrastructure
Mobipay
International
Acquiring
Bank
4
5
6
MERCHANT
1
Issuing
Bank
2
3
Local
Mobipay
Local
Mobipay
0
4
CLIENT FROM
COUNTRY B
Country A
GSM
Roaming
Country B
SOURCE: MOBIPAY
T-Mobile Micropayment Service
3. Return signed
purchase order
2. Sign
purchase
order
Customer:
mobile
devices
2. Upload
application
and
credentials
1. Provide
Customer‘s
keys and
certificate
4. Check
signature
Merchant:
Point of Sale
1. Send
purchase
order
Mobile
Gateway
1. Register
a) Send
collected
purchase
orders
regularly
Content
Billing
Application
Repository
Micropayment
Public Key
Infrastructure
Advertising
b) Check
purchase
orders
c) Clearing
and settlement
Location Based
Services
3. Create key pair
and certificate
Financial
Institution
Customer registration
2. Certification
request
Mobile commerce platform
Application and
credential upload
Clearing and
settlement
SOURCE: T-SYSTEMS
Digital Wallets
• Files or devices containing payment information,
possibly representations of money
• Used for seamless payments, without significant user
intervention
SOURCE: LAUDON & TRAVER
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Microsoft Wallet
20-763 ELECTRONIC PAYMENT SYSTEMS
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How Microsoft Passport Works
SOURCE: LAUDON & TRAVER
20-763 ELECTRONIC PAYMENT SYSTEMS
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Major Ideas
•
•
•
•
Mobile payment is expanding rapidly
Wallets yield great conveneince
Blind digital signatures are possible
eCash is a minor development
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Q&A
20-763 ELECTRONIC PAYMENT SYSTEMS
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mCommerce: Replacement for
Cash & Card
Vending,
Access,
Ticketing,
etc.
Users
Telco network
WWW
External
Business
Systems
Call
Center
Data
Internet
Mobile Payment Platform
Financial
Institutes /
Telco
billing
SOURCE: SONERA
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A Mobile Payment Scheme
Mobile
Gateway
4. Request PO (API)
5. Certified PO
Mobile
PSP
0. Routing
8. Deposit
Merchant’s
PSP
2. Offer
(WML)
7. Deposit
3. Payment
Authorization
Mobile buyer
0
Merchant
SOURCE: NEWGENPAY.COM
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Mobile Aggregators
SEE ALSO YODELEE2GO
WIRELESS BANKING: EDS
SOURCE: VERTICAL ONE
20-763 ELECTRONIC PAYMENT SYSTEMS
SPRING 2004
COPYRIGHT © 2004 MICHAEL I. SHAMOS