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Overview of Mobile
Payment SystemsAmit Naik
BMC Software
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Agenda
Why should we care?Mobile Payment types
World of NFC
NFC Payment Networks
Start-ups in Mobile Payments space
Wrap-upQ&A
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Why should we care?
Lot of money in this space
Mobile Payments To Triple To $670 BillionBy 2015 Report by Juniper Research
141 Million people spending $86.1 BillionUsing Mobile Payments - Gartner 2011
Paypal alone seeing $3 Billion Using MobilePayments in 2011 Paypal blog
"And one more thing..."
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iPhone 5 rumored to have NFC!
Are you willing tobet against Appledisrupting the
mobile paymentsspace?
Just like:
- Music (iPod)- Phones (iPhone)- Tablets (iPad)
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Is it safe?
PIN protectedSafer than Cash
Lost SmartPhone
noticed in 15 mins,Lost Wallet 60 minson avg.!
Info Encryptedwhile on Phone
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Mobile Payment Types
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Types of Mobile Payments
Interactive Voice Response (IVR) basedApplies to Landline and Mobiles
Premium SMS based
Direct Billing Customer Identity based
Web Payments
Contactless (NFC)Point-of-Sale
Peer-to-Peer
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Mobile Payment types contd
Direct Billing and Contactless modes ofmobile payment seeing faster adoption
Direct Carrier Billing examples: Zong
(Paypal) , BilltoMobile, Boku, MoPay,Billing Revolution, etc.
NFC leads in contactless payments tech.
Juniper Research: 1 in 6 users worldwidewill have an NFC-enabled phone by 2014
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World of NFC
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Overview of NFC - Origins
Near Field Communications (NFC) is aform of Radio Frequency ID (RFID)communication
Invented by NXP Semiconductors(Philips) & Sony in 2002
Near Field (less than 0.10 meters)
typically not more than a few centimeters
Enhanced Security and lower power needs
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NFC Overview 3 operation ModesCard Emulation
Enables devices to act like contactless cards
NFC-enabled mobile phones used for payment
Reader/ Writer
Enables devices to interact with RF tags
E.g. NFC-enabled phones used to read smartposters
Peer-to-Peer
Enables devices to communicate with one another
E.g. NFC-enabled laptops and printers
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NFC Overview - Technology
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NFC ready smart phonesBlackBerry Bold Touch 9900/9930
Samsung Galaxy S II (select phones)
Nokia C7-00 (Symbian) aka
T-Mobile AstoundHTC Incredible S with NFC chip (China)
Nokia has numerous non-smart phones
with NFC for a while in the market
iPhone 5?
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NFC Software Stack
Open NFC is a open source software stackwith Hardware Abstraction Layer
Multiple bindings available for different
devices Open NFC for Android,
WinCE/Mobile Edition,
Linux Edition (for embedded Linux or Linux for PC),
PC Edition (for Windows XP/Vista/7), and
Core Edition for small OS (Nucleus, REX...)
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NFC Payment Networks
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Google Wallet
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How Does Google Wallet Work?
Android App Stores your plastic detailsCredit card numbers, Name, Expiry, etc
Point-of-Sale (PoS) equipped with NFC
Contactless Readers (PayPass)App. transfers Credit Card authorization
using NFC chip on Mobile device
Compatible with Nexus S/Nexus S 4G today
Citi MasterCard and Google Card used
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Google Wallet Security layers
Credit card info stored in encrypted formSecure Element - Separate Chip on phone
Its own memory isolated from phone memory
Restricted access by trusted apps only
PIN reqd. to activate phones NFC antenna turned off after each info. exchange
Device must be in close proximity reader
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Wallet Security Layers Contd
NFC transceiver is only enabled when thephones screen is illuminated
PIN is a must to authorize payment
transfers in form of Secure CredentialsCredentials transferred directly using
Master Cards Paypass protocol
Wallet app prevents obvious weak PINlike 1234 , 1111 & Enforces lock out
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ISIS Payment Network
NFC based Payment NetworkAT&T, Verizon, & T-Mobile together
formed ISIS network
Supports VISA, MasterCard, AmericanExpress, and Discover
ISIS enabled Phones not on the market and
Architecture is not yet published
US trials starting 2012
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NFC Adoption Stats
Credit card companies worried about newentrants disrupting ecosystem
Chicken-and-Egg: People cant use NFC
no hardware manufactures do not makeNFC hardware as people do not use it
NFC to become widely deployed by 2014
Multiple Startups filling gap between FullNFC and Pure Old Credit Card (POCC)
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Startups - Mobile Payments Area
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Square - P-2-P mobile payments
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SMB and P-2-P mobile payments
Square Dongles allows merchants to useCell Phones/Tablets to swipe credit cards
Attachment fits into the audio jack of the
iPhone/iPad/Android deviceApp. on the phone then transmits info to
Squares servers and Charges the card
VISA recently made a strategic investment
Start-up Valued at around $1 Billion!
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Square Competitors
VeriFone Makes both NFC software andtraditional Credit card readers for iPhone
Reader Case wraps around the bottom-
half and plugs into the dock of iPhoneInnerFence is another company that
makes a similar card reader for
iPhone/iPads
Plugs into the dock of the iPhone/iPad
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FigCard WiFi based payments
Fig card (Paypal) provides an applicationfor Wifi enabled smart phones
Cheap USB dongle for Merchant POS
Fig card app stores Credit cards details
When customer is ready to pay, app onphone sends encrypted WiFi signal to POS
Phone number/ Credit card number etcnot exchanged Electronic confirmation
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Card.io Capture card info easier
App on phone takes apicture of Credit Card
Strips out reqd. info &
send it to MerchantDeletes picture from
phone once completed
API available forthird-party integration
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Jumio Similar to Card.io
Mobile app that takesa picture of Card
Scans picture and
extracts info.Also can useWebCam
at a POS terminal
Securely transmitsdata
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Naratte Zoosh Ultrasound Paymts
Data delivery byultrasound waves~20,000 Hz
Any phone that playsnormal mp3s will work
Regular Speakers and
Microphone capable ofsending and reception
Works securely even in
noisy environments
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Wrap-up: Future of Mobile Payments
Almost unlimited possibilities fordisruption of existing shopping experience
Low barrier to demo stage
Location aware offers Phone GPS + NFC
Verified check-ins Offers (FourSquare)
Personalized
Offers (Browsing history)
Instant in-store offers (Proximity based)
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Wrap-up contd
Instant coupons, instant offers (on-line)Receipts are electronically processed
Phone App. has a transaction log and
actual Receipt could be E-mailed/ScannedLots of innovation From SMS based
payments to NFC based payments in all
markets
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Q & A
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Get in touch!
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ReferencesJuniper Research Report: http://www.marketwire.com/press-release/mobile-
payments-market-almost-triple-value-2015-reaching-670bn-according-new-juniper-1534333.htm
Gartner 2011 mobile data: http://www.gartner.com/it/page.jsp?id=1749114
Paypal blog on mobile payments:
https://www.thepaypalblog.com/2011/06/paypal-doubles-mobile-payments-
predictions-to-3-billion-in-2011/
Steve Jobs Images by Albert Watson (Angry old Man) and National GeographicOctober 1982 - Moira Johnston/Charles ORear
NFC Technology Architecture: http://www.nfc-
forum.org/resources/presentations/
Open NFC: http://www.open-nfc.org/infos.html
Google Wallet: http://google.com/wallet
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References contdGoogle Wallet Security:
http://www.pcworld.com/article/228959/google_wallet_security_has_a_weakness.html
ISIS: http://www.paywithisis.com
Square: https://squareup.com/
VeriFone: http://www.verifone.com/InnerFence: http://www.innerfence.com/
FigCard: http://figcard.com/
Card.io: http://card.io
Jumio: https://pay.jumio.com/
Naratte: http://www.naratte.com/
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