Mobile Payment Systems
Presented By Amit Naik at the 2nd IndicThreads.com Conference On Mobile Application Development, August 2011 http://Mobile.IndicThreads.com
Content
Overview of Mobile Payment Systems
Amit Naik
BMC Software
1
Agenda
Why should we care? Mobile Payment types World of NFC NFC Payment Networks Start-ups in Mobile Payments space Wrap-up Q&A
2
Why should we care?
Lot of money in this space Mobile Payments To Triple To $670 Billion By 2015 ² Report by Juniper Research 141 Million people spending $86.1 Billion Using Mobile Payments - Gartner 2011 Paypal alone seeing $3 Billion Using Mobile Payments in 2011 ² Paypal blog "And one more thing..."
3
4
5
iPhone 5 rumored to have NFC!
Are you willing to bet against Apple disrupting the mobile payments space? Just like: - Music (iPod) - Phones (iPhone) - Tablets (iPad)
6
Is it safe?
PIN protected Safer than Cash Lost SmartPhone noticed in 15 mins, Lost Wallet 60 mins on avg.! Info Encrypted while on Phone
7
Mobile Payment Types
8
Types of Mobile Payments
Interactive Voice Response (IVR) based
Applies to Landline and Mobiles
Premium SMS based Direct Billing ² Customer Identity based Web Payments Contactless (NFC)
Point-of-Sale Peer-to-Peer
9
Mobile Payment types ² cont·d
Direct Billing and Contactless modes of mobile 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 worldwide will have an NFC-enabled phone by 2014
10
World of NFC
11
Overview of NFC - Origins
Near Field Communications (NFC) is a form of Radio Frequency ID (RFID) communication Invented by NXP Semiconductors (Philips) & Sony in 2002 ´Near Fieldµ (less than 0.10 meters) typically not more than a few centimeters Enhanced Security and lower power needs
12
NFC Overview ² 3 operation Modes
Card 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 ´smart postersµ
Peer-to-Peer
Enables devices to communicate with one another E.g. NFC-enabled laptops and printers
13
NFC Overview - Technology
14
NFC ready smart phones
BlackBerry Bold Touch 9900/9930 Samsung Galaxy S II (select phones) Nokia C7-00 (Symbian) aka T-Mobile Astound HTC Incredible S with NFC chip (China) Nokia has numerous non-smart phones with NFC for a while in the market iPhone 5?
15
NFC Software Stack
Open NFC is a open source software stack with 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...)
16
17
NFC Payment Networks
18
Google Wallet
19
How Does Google Wallet Work?
Android App ² Stores your ´plasticµ details Credit 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
20
Google Wallet ² Security layers
Credit card info stored in encrypted form Secure Element - Separate Chip on phone
Its own memory isolated from phone memory Restricted access by ´trusted appsµ only
PIN reqd. to activate phone·s NFC antenna ² turned off after each info. exchange Device must be in close proximity reader
21
Wallet Security Layers ² Cont·d
NFC transceiver is only enabled when the phones screen is illuminated PIN is a must to authorize payment transfers ² in form of Secure Credentials Credentials transferred directly using Master Cards Paypass protocol Wallet app prevents obvious weak PIN like 1234 , 1111 & Enforces lock out
22
ISIS Payment Network
23
ISIS Payment Network
NFC based Payment Network AT&T, Verizon, & T-Mobile together formed ISIS network Supports VISA, MasterCard, American Express, and Discover ISIS enabled Phones not on the market and Architecture is not yet published US trials starting 2012
24
NFC Adoption Stats
Credit card companies worried about new entrants disrupting ecosystem Chicken-and-Egg: People can·t use NFC no hardware ² manufactures do not make NFC hardware as people do not use it NFC to become widely deployed by 2014 Multiple Startups filling gap between Full NFC and Pure Old Credit Card (POCC)
25
Startups - Mobile Payments Area
26
Square - P-2-P mobile payments
27
SMB and P-2-P mobile payments
Square Dongles allows merchants to use Cell Phones/Tablets to swipe credit cards Attachment fits into the audio jack of the iPhone/iPad/Android device App. on the phone then transmits info to Square·s servers and Charges the card VISA recently made a strategic investment Start-up Valued at around $1 Billion!
28
Square Competitors
VeriFone ² Makes both NFC software and traditional Credit card readers for iPhone Reader Case wraps around the bottomhalf and plugs into the dock of iPhone InnerFence is another company that makes a similar card reader for iPhone/iPads Plugs into the dock of the iPhone/iPad
29
FigCard ² WiFi based payments
Fig card (Paypal) provides an application for Wifi enabled smart phones Cheap USB dongle for Merchant POS Fig card app stores Credit cards details When customer is ready to pay, app on phone sends encrypted WiFi signal to POS Phone number/ Credit card number etc not exchanged ² Electronic confirmation
30
Card.io ² Capture card info easier
App on phone takes a picture of Credit Card Strips out reqd. info & send it to Merchant Deletes picture from phone once completed API available for third-party integration
31
Jumio ² Similar to Card.io
Mobile app that takes a picture of Card Scans picture and extracts info. Also can use WebCam at a POS terminal Securely transmits data
32
Naratte Zoosh ² Ultrasound Paymts
Data delivery by ultrasound waves ~20,000 Hz Any phone that plays normal mp3s will work Regular Speakers and Microphone capable of sending and reception Works securely even in noisy environments
33
Wrap-up: Future of Mobile Payments
Almost unlimited possibilities for disruption of existing shopping experience Low barrier to demo stage Location aware offers ² Phone GPS + NFC Verified check-ins Offers (FourSquare) Personalized Offers (Browsing history) Instant in-store offers (Proximity based)
34
Wrap-up ² cont·d
Instant coupons, instant offers (on-line) Receipts are electronically processed ² Phone App. has a transaction log and actual Receipt could be E-mailed/Scanned Lots of innovation ² From SMS based payments to NFC based payments in all markets
35
Q&A
36
Get in touch!
37
References
Juniper Research Report: http://www.marketwire.com/press-release/mobilepayments-market-almost-triple-value-2015-reaching-670bn-according-newjuniper-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-paymentspredictions-to-3-billion-in-2011/ Steve Jobs Images by Albert Watson (Angry old Man) and National Geographic October 1982 - Moira Johnston/Charles O·Rear NFC Technology Architecture: http://www.nfcforum.org/resources/presentations/ Open NFC: http://www.open-nfc.org/infos.html Google Wallet: http://google.com/wallet
38
References ² cont·d
Google Wallet Security: http://www.pcworld.com/article/228959/google_wallet_security_has_a_wea kness.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/
39
Amit Naik
BMC Software
1
Agenda
Why should we care? Mobile Payment types World of NFC NFC Payment Networks Start-ups in Mobile Payments space Wrap-up Q&A
2
Why should we care?
Lot of money in this space Mobile Payments To Triple To $670 Billion By 2015 ² Report by Juniper Research 141 Million people spending $86.1 Billion Using Mobile Payments - Gartner 2011 Paypal alone seeing $3 Billion Using Mobile Payments in 2011 ² Paypal blog "And one more thing..."
3
4
5
iPhone 5 rumored to have NFC!
Are you willing to bet against Apple disrupting the mobile payments space? Just like: - Music (iPod) - Phones (iPhone) - Tablets (iPad)
6
Is it safe?
PIN protected Safer than Cash Lost SmartPhone noticed in 15 mins, Lost Wallet 60 mins on avg.! Info Encrypted while on Phone
7
Mobile Payment Types
8
Types of Mobile Payments
Interactive Voice Response (IVR) based
Applies to Landline and Mobiles
Premium SMS based Direct Billing ² Customer Identity based Web Payments Contactless (NFC)
Point-of-Sale Peer-to-Peer
9
Mobile Payment types ² cont·d
Direct Billing and Contactless modes of mobile 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 worldwide will have an NFC-enabled phone by 2014
10
World of NFC
11
Overview of NFC - Origins
Near Field Communications (NFC) is a form of Radio Frequency ID (RFID) communication Invented by NXP Semiconductors (Philips) & Sony in 2002 ´Near Fieldµ (less than 0.10 meters) typically not more than a few centimeters Enhanced Security and lower power needs
12
NFC Overview ² 3 operation Modes
Card 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 ´smart postersµ
Peer-to-Peer
Enables devices to communicate with one another E.g. NFC-enabled laptops and printers
13
NFC Overview - Technology
14
NFC ready smart phones
BlackBerry Bold Touch 9900/9930 Samsung Galaxy S II (select phones) Nokia C7-00 (Symbian) aka T-Mobile Astound HTC Incredible S with NFC chip (China) Nokia has numerous non-smart phones with NFC for a while in the market iPhone 5?
15
NFC Software Stack
Open NFC is a open source software stack with 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...)
16
17
NFC Payment Networks
18
Google Wallet
19
How Does Google Wallet Work?
Android App ² Stores your ´plasticµ details Credit 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
20
Google Wallet ² Security layers
Credit card info stored in encrypted form Secure Element - Separate Chip on phone
Its own memory isolated from phone memory Restricted access by ´trusted appsµ only
PIN reqd. to activate phone·s NFC antenna ² turned off after each info. exchange Device must be in close proximity reader
21
Wallet Security Layers ² Cont·d
NFC transceiver is only enabled when the phones screen is illuminated PIN is a must to authorize payment transfers ² in form of Secure Credentials Credentials transferred directly using Master Cards Paypass protocol Wallet app prevents obvious weak PIN like 1234 , 1111 & Enforces lock out
22
ISIS Payment Network
23
ISIS Payment Network
NFC based Payment Network AT&T, Verizon, & T-Mobile together formed ISIS network Supports VISA, MasterCard, American Express, and Discover ISIS enabled Phones not on the market and Architecture is not yet published US trials starting 2012
24
NFC Adoption Stats
Credit card companies worried about new entrants disrupting ecosystem Chicken-and-Egg: People can·t use NFC no hardware ² manufactures do not make NFC hardware as people do not use it NFC to become widely deployed by 2014 Multiple Startups filling gap between Full NFC and Pure Old Credit Card (POCC)
25
Startups - Mobile Payments Area
26
Square - P-2-P mobile payments
27
SMB and P-2-P mobile payments
Square Dongles allows merchants to use Cell Phones/Tablets to swipe credit cards Attachment fits into the audio jack of the iPhone/iPad/Android device App. on the phone then transmits info to Square·s servers and Charges the card VISA recently made a strategic investment Start-up Valued at around $1 Billion!
28
Square Competitors
VeriFone ² Makes both NFC software and traditional Credit card readers for iPhone Reader Case wraps around the bottomhalf and plugs into the dock of iPhone InnerFence is another company that makes a similar card reader for iPhone/iPads Plugs into the dock of the iPhone/iPad
29
FigCard ² WiFi based payments
Fig card (Paypal) provides an application for Wifi enabled smart phones Cheap USB dongle for Merchant POS Fig card app stores Credit cards details When customer is ready to pay, app on phone sends encrypted WiFi signal to POS Phone number/ Credit card number etc not exchanged ² Electronic confirmation
30
Card.io ² Capture card info easier
App on phone takes a picture of Credit Card Strips out reqd. info & send it to Merchant Deletes picture from phone once completed API available for third-party integration
31
Jumio ² Similar to Card.io
Mobile app that takes a picture of Card Scans picture and extracts info. Also can use WebCam at a POS terminal Securely transmits data
32
Naratte Zoosh ² Ultrasound Paymts
Data delivery by ultrasound waves ~20,000 Hz Any phone that plays normal mp3s will work Regular Speakers and Microphone capable of sending and reception Works securely even in noisy environments
33
Wrap-up: Future of Mobile Payments
Almost unlimited possibilities for disruption of existing shopping experience Low barrier to demo stage Location aware offers ² Phone GPS + NFC Verified check-ins Offers (FourSquare) Personalized Offers (Browsing history) Instant in-store offers (Proximity based)
34
Wrap-up ² cont·d
Instant coupons, instant offers (on-line) Receipts are electronically processed ² Phone App. has a transaction log and actual Receipt could be E-mailed/Scanned Lots of innovation ² From SMS based payments to NFC based payments in all markets
35
Q&A
36
Get in touch!
37
References
Juniper Research Report: http://www.marketwire.com/press-release/mobilepayments-market-almost-triple-value-2015-reaching-670bn-according-newjuniper-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-paymentspredictions-to-3-billion-in-2011/ Steve Jobs Images by Albert Watson (Angry old Man) and National Geographic October 1982 - Moira Johnston/Charles O·Rear NFC Technology Architecture: http://www.nfcforum.org/resources/presentations/ Open NFC: http://www.open-nfc.org/infos.html Google Wallet: http://google.com/wallet
38
References ² cont·d
Google Wallet Security: http://www.pcworld.com/article/228959/google_wallet_security_has_a_wea kness.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/
39
