Ecosystem Scenarios for Cloud-based NFC Payments Pardis Pourghomi and George Ghinea School of...

Ecosystem Scenarios for Cloud-based NFC Payments

Pardis Pourghomi and George Ghinea School of Information Systems, Computing and Mathematics

Brunel UniversityLondon, UK

UB8 [email protected]

[email protected] - Brunel University, UK

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Introduction to NFC

• NFC is designed for short distance wireless communication• NFC is complementary to Bluetooth and 802.11 with their

long distance capabilities• Easy and simple connection method• Enables the exchange of data between devices over the

distance of up to 20 centimetres • Provides communication method to non-self powered

devices


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Examples of using NFC enabled mobile phones

• Download music or video from a smart poster• Exchange business cards, Pay bus or train fair, Parking

tickets, Pay at Kiosks, Pay and purchase at Point of Sale Terminals

• Access controls in office, hotels, airports, print receipts to printer


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What is a Secure Element (SE)?

• SE is intended as an attack resistant microcontroller• Combination of hardware, software, interfaces and

protocols embedded in a mobile handset that enable secure storage

• Provides a secure area for the execution of the applications and protection of the payment assets (i.e. payment keys, application codes, payment data)

• Can also be involved in authentication process


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What is a Secure Element (SE)?

• Operating system running on the SE must be able to install, personalize and manage multiple applications

• The SE is essential in NFC transactions and ownership/control of it may yield commercial or strategic advantage

• SE types: Stickers, removable Secure Memory Card (SMC), Universal Integrated Circuit Card is (UICC), Embedded SE (eSE)


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NFC ecosystem players

• Consumer: is the party that is considered as the end user in an NFC ecosystem.

• Merchant: is considered as the consumer matching part.• Secure Element issuer (SEI): is the party that issues the

SE in an NFC ecosystem. It is also controlling the SE in which it decides how the storage of an SE should be used.

• Secure Element provider: SE provider is the manufacturer of the SE. It has a direct relationship with SE issuer and service provider.

• Service Provider (SP): is the party that issues the payment application and deploys data element to consumer. SP is also responsible for managing the payment application which is stored in SE.


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NFC ecosystem players

• Mobile Network Operator (MNO): is responsible for providing the GSM network for data transmission. In our case, the MNO is the SE issuer (SE in the form of UICC).

• Trusted Service Manager (TSM): The role of TSM is to integrate several SEs and SPs.

• Acquirer: The main role of the acquirer is handling financial payments by clearing and settling transactions through the financial institutions.


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SE management

• SE management in a mobile multi-application environment is very challenging

• SP and SE issuers have ‘n’ to ‘n’ active relationship• Partners may have limited control over the service

environment • Current card issuance models cannot support the dynamic

post issuance personalization process (lack of SP’s control on SE)


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Mobile wallet + Cloud computing

• Is there a need for cloud? • Would NFC do the job on its own?• There is a need for a clear right to go market strategy for mobile

payments• There is not much agreement in the minds of mobile wallet

stakeholders• Which technology will finally get accepted by consumers and

merchants? • PayPal, Telefonica/O2, and Best Buy have announced wallets that

are using cloud technology – “cloud wallets”


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NFC wallet & Cloud wallet NFC Wallet Cloud Wallet

A chip is required – stored in the phone A mobile app is required – Logging

A mobile app is required – Logging Client registers with the SP (cloud)

Phone can be scanned on the POS Registered info are stored in an offline database

Beneficial for busy environments e.g. train stations

Pre-paid account is required

Improves the loyalty experience of clients Required info (e.g. credit card details) is pulled out from the database when client aims to make a payment

Different apps can be integrated into a single app

Beneficial for merchants – no need to change their current POS terminals


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NFC Cloud Wallet model – Overview

1) Customer scans his NFC enabled phone on the POS to make the payment

2) The payment application is downloaded into customer’s mobile phone SE

3) The POS communicates with the cloud provider to check whether the customer has enough credit

4) Cloud provider transfers the required information to the POS

5) The merchant either authorizes the transaction or rejects customer’s request

6) The merchant communicates with the cloud to update customer’s balance


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NFC Cloud Wallet model – General idea

Additional Security (optional)

• When NFC enabled phone sends a request to the cloud provider to get permission to make a payment (step 1), the cloud provider sends a SMS requesting a PIN number to identify the user of the phone

• Customer sends the PIN back to the cloud provider as an SMS – Verification


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Ecosystem scenarios: Direct Link between POS and MNOExtension to NFC cloud wallet model

Assumptions: • The SE is part of the SIM (UICC)• The cloud is part of the MNO• The MNO manages the SE/SIM

(GSM)• Banks, etc. are linked with the MNO• MNO is the only party which

manages confidential data stored in the cloud

• More info: Pourghomi, P., Saeed, M., Q., and Ghinea, G. A Proposed NFC Payment Application, In International Journal of Advanced Computer Science and Applications (IJACSA), volume 4, Number 8/2013, pages 173-181. The Science and Information Organization Ltd, 2013.


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Ecosystem scenarios: Unlinked POS and MNO

Assumptions:

• The main SE (virtual SE) is part of cloud – managed by MNO

• A secure tamper resistant component is in mobile device used for authentication (phone’s SE)

• The MNO manages the SE/SIM (UICC)

• Banks, etc. have connections with MNO

• Vendor trusts MNO


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The virtual SE V.S. phone’s SE

Virtual SE (stored in cloud): Securely store personal data such as debit and credit card information, user identification number, loyalty program data, payment applications, PINs and networking contacts

Phone’s SE: Stores authentication data such as keys, certificates, protocols and cryptographic mechanisms


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Research challenges

• Integration of financial institution(s) with MNO

• Integration of cloud with MNO

• Design secure transaction protocols according to payment

scenarios

• Further exploration of cloud architecture (SP perspective)


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Thank you for your attention!

Question time

Contact: pardis.pourghomi@brunel .ac.uk

Ecosystem Scenarios for Cloud-based NFC Payments Pardis Pourghomi and George Ghinea School of...

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