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Toan Do – Tan Tran – Vinh Nguyen Since thousands year ago, people have been creating the method to exchange valued goods, from direct goods exchange to intermediate exchange and then invented the money. From using stone or shell even paper money to make transaction, now people can easily to use some kind of “virtual money” like a plastic card (called debit or credit card) or a computer to finish a trading transaction. From several years ago, a new term was strongly concerned by both technical side and business side about new way to make a payment, it is about mobile payment. Many predictions show that, mobile payment could quickly change the way we do business and the volume of payment transaction via this technology could touch hundred billions US dollar in next years. Even though this trend still has many things to proof how people expect from it.
Because of struggling for existence, from primitive age, people tried to find the way for communication and made a good exchange. Used smoke as signal to inform other in hunting or in the war; exchanged directly between meat and rice are very clearly example about communication and payment in Stone Age. It was also a background idea for the evolution of payment technology in modern society. Along with human development, the demand of trading increased quickly. Directly goods exchange or event using some natural materials as intermediate goods exchange also had many limitation and barriers when making a big or complicate transaction. By discovering the metal, mining technique and foundry, people used small piece of metal (a coin) as intermediate media in trading, instead of deliver goods directly. By this age, some simplest models of bank were occurred as valued goods keeper. At that time, the ancient people knew to use bird or horse to transfer information. We cannot see the relationship between the communication and trading anymore. After that, at the end of Middle age, European started using trade bills in exchange; it meant the buyer promised to make payment at some specific future date. Because, the buyer was the reputable person or the bills were guaranteed by an issuer, so the seller can change those bills into money at some merchant banker. It was the first kind of credit, a new term of payment. But this kind of money was not prevalent much and was just accepted in closed area. In some local areas, people also used tally, made by wood, in which recorded some taxes that promised to pay in future.
business. Along with the explosion of information technology and telecommunication. so that. banking had some important innovations. broadband network and 3G #mobile network.. the 3G mobile network was firstly deployed in Japan again.. to total number of mobile subscribers in the world is …. According to the. To the end of 18th century. the world had been developing rapidly in every aspect.. now a mobile phone is not only the cell-phone. . as text data and it can be widely known as SMS#.. This 2G #network is digital network. the first commercial mobile network was launched in Japan. the merchants and traders required a wider network of payment that support their business.In 16th and 17th century. In this time... . lending. it can bring not only the voice but the data also. money changing fund transfer. The world population over the Industrial Revolution State of the art Even though the first mobile phone was introduced in 1973 in United States but until 1979. This network allowed connected devices to exchange data together at a high speed. From that time. This first generation mobile network was pure analog network so it can only transfer the voice only. This booming lead the reaction of human about finding the different way to make food. Ten years later. that converges almost ending technology.. it is a mobile computer. With the steady development of micro technology. The world population increased from 1 billion to 2 billion within over 100 years. and trading transaction. In 1991. world trading had began to explode along with growth of colonialism. the first 2G mobile network was launched in Finland on GSM #standard. for example accepted deposits. the Industrial Revolution boomed. This huge number of devices creates a new trend in the way people make business. the payment stepped forward into new generation.
The basic idea of this technique is create a “virtual money” and the more important thing is the bridge to connect the buyer and the seller. the disadvantages of this technique is user have to memorize the structured text message. Samsung with Android or iPhone with Apple iOS. it is easily to see people using mobile to transfer text to another mobile owner. handset manufacturers. to transfer money from mobile owner to other. Some familiar mobile phones integrated many features like: camera. but with simpler text. anywhere with only a smart phone and a connection. Normally. and this is a strong point to put mobile into very interesting business filed. wi-fi connection. user just only transfer money from real bank account from any bank to the virtual wallet and then make the payment anytime. when smart-phone becomes prevalent. voice recognition. it is just an alternative option only. people can also make a transaction via mobile like transfer money to other. Along with the amazing development of micro technology. this is quite inconvenience way to do the business. from mobile network operators. utilities companies. Not only the bank. Nowadays. This technology base on 2G mobile network only and does not require any add on application on the device so everyone can easily use it daily without the high-end mobile phone. pay a bill. pay electricity bill or even top-up the mobile account. Instead of going to branch of the bank. Ignore the security issue at some weakness points. That is the reason the developer integrated QR# technology in mobile device to support some vertical industries like . This trend involved diverse type of business owner. just only the simplest one. In mobile banking. One of the widest appliances on this field is mobile banking. retail stores and payment platform providers to banks. advertiser and third party content providers and so on. compatible with 2G network. the business owner tries to apply more complex software on the devices to create convenience interface with customer. Of course. for example. the smart-phone uses strong microchip so it can process image very well. in a flexibility operating system like Nokia with Widows Mobile. many intermediate payment companies have started jumping into this rich field.. The background idea is trying to bring the Internet Banking into mobile device so that customer can do the transaction anytime. fund transfer and so on. the transaction requires the both partners have bank accounts on a same banks but with mobile-wallet. inquiry account. transportation companies. GPS.called mobile payment.. At a higher level. The principle here is each people has at least one mobile phone and at least one bank account and the mission is connect these two properties together. These kinds of mobile phone pushed the business create advantage competitive by develop business application on those devices. now customer can stay at home or workplace to make any transaction such as listing statistics. They create some virtual products like mobile-wallet which customer can use mobile to make payment when shopping on-line or offline also. the syntax must be like this: FT [destination account] [amount] [passcode]. anywhere without concern about the seller„s bank account. a small mobile device now can include a high resolution camera.
all information of the product display on the phone. One of the most interesting technologies is NFC: Near Field Communication. this card and the mobile could be integrated together to become a very powerful personal device. Come back to the first idea of mobile payment is converging banking account and mobile device together. That make customer decide properly. This solution has many disadvantages but it is a source of the breakthrough idea in mobile payment. people see the poster advertise a new movie. it is also called contactless card which allow one-way communication only. It was developed from RFID (Radio Frequency Identification) but allow to two-way communication between end points. Nowadays. A new type of plastic card includes a smart chip which could be programmed. According to In-Stat (www. This solution acts as mobile computer with the card reader combine together to become mobile POS. media. integration between credit card and mobile is a new trend of business developer. in near future. NFC occurred in payment card. It is predict that. NFC is a set of standard for smart-phone to establish radio communication with each other in a distance of few centimeters. Visa and Master trying to integrate credit card reader into mobile device. people can point the camera to that piece and see the trailer of the move and even can book some seats on the cinema and pay the tickets as well. Unsurprisingly when seeing people go to super market with the mobile in hand and points to the goods in half of second.in-stat. . In some recent year ago. NFC is not a new technology. the global mobile payment volume will reach 45 billion US dollar in 2015.com). Or. In payment card industry. ROM and RAM. when walking on the street. This is a huge market to push business developer to find the new channel of trading. On the poster has a mall piece looks like no meaning but when using mobile. advertisement. it is credit mobile instead of current credit plastic card. using NFC as communication method and can be use for multipurpose appliances.retail. Visa and Master has been racing to reach a new market: Mobile credit card. In some recent years. This card has CPU. two giants of financial institutes. What‟s next? As mentioned above.
camera included. Wi-fi and 3G communication or Wimax in future. Retailer: Obviously. no wallet and no Visa or Master card when go shopping. Moreover. With some other features of mobile. The appliance of this technology could be applied in the following: Transportation: People can use mobile to buy bus or train ticket electronically and automatically when get on the vehicle by putting the mobile near the POS devices.The architecture of NFC integrated mobile The picture above is one of the examples to illustrate how NFC can be integrated with mobile to become payment mobile device. Not only using in payment. With the strength of mobile capacities such as CPU. It can be used to pay road fee when people travelling on the road or pay the taxi fee as well. Media and Ads: . NFC mobile could be used for check in and boarding card. with NFC mobile. an NFC-Mobile will become an indispensable device. the mobile can be also an electronic airline ticket. no cash. such as the material. the manufacturer or even the vote of other buyer who bought and used it already. people in future just needs to bring the mobile only. the buyer can easily and quickly accesses all information of the goods.
the audience can watch the trailer and book the seat in cinema or pay that ticket.The poster of an advertisement will be more active because the audience can use NFC mobile to access the detail information of the advertising product. the developer identified some key issues. When applied to transactions over mobile networks security issues regarding device limitations and network immaturity have also to be addressed. Security First of all. security is the most important prerequisite for any type of monetary exchange. Beside the convenience of NFC. With numerous developing mobile payments consortia. Those are some pictures of future mobile payment with NFC. This is the reason why business developer invests on this technology. issues of standardization and interoperability also have to be addressed. Kiosk POS: There is no more coin in future. The poster of Mobile payment Risks and Challenges Parallel with the development of mobile payment trend. Those are some major risks and challenges that will be affected to this trend such as security. The battle for establishment of . regulation and suitability. If it is the movies. the most important that make NFC become the future technology is about eco-system. NFC is non-battery equipment. All kiosks in the world will installed NFC reader so the buyer can buy everything that kiosk sell by the mobile only.
The regulations for players in the financial industry are different from those governing the telecommunications industry. And m-payment is more suitable and convenience than all the other payment method. Regulatory Although m-payments may allow parties to make economic exchanges. Shopping convenience plays an important role in the success of Internet commerce. Ideally.proprietary standards which led to a lack of secure and interoperable standards as well as incompatible operating systems and devices was a major reason for the failure of the first wave of mobile payments [Mobile Payment Forum. For m-payment. Suitability Besides the transaction security. but money orders and cashier‟s checks first must be obtained from an issuer and then mailed. Over all. “Every day. Mpayment need stronger security mechanisms because of the large amount of money involved and the greater possibility of fraud. which is a medium of exchange that is authorized. the new risks are emerging. Payment methods have various levels of convenience. it means. it is not legal tender in the sense it lacks the status of other payment instruments such as cash. To overcome this problem legislation has to be put in place that will make m-payments legal tender. adopted and guaranteed by the government. For example. for which technology is already available. people are adopting new technologies that trade a small amount of their privacy for greater convenience”. A major function of Internet business is to provide convenience in information gathering and order processing. the more risk will come.5G network. trading partners are also concerned about transaction convenience. the all mobile transactions should be secured with enforceable digital signature. the mobile became the IP device. m-payment is more convenient for for the buyer than a money order or a cashier‟s check or credit card. the more technology applied. From 2. this is not as important as concerns regarding simplicity and speed. when the mobile connected to the digital world. At best m-payments will have to be backed by the issuer‟s promise to pay. which means that each industry has its own particular standards body to comply with. . but changing the way people think about paying for purchases and services. 2002]. As general rule. the biggest challenges facing mobile payments isn‟t going to be evolving technology or security. In fact. A credit card can be electronically processed. Convenience is becoming an increasingly important issue in modern society.
Wimax. house key. Social network.. Mobile in future can be everything: the car key. References: http://www.html#axzz1fSlVeemw KPMG . the payment device. the mobile can be come a powerful personal device and indispensable equipment of the human.Conclusion The next generation of mobile payment in particular and mobile phone in general is about convergence. There are many things should be studied more about the security but it is believe that. it will be a successful technique in future.com/2011/04/annual-mobile-payment-transactionsto.blogspot. ID card and of course. Along with fast grow technology trends like Cloud computing.com http://epaymentnews.) and NFC.Mobile Payment in Asia Pacific 2011 .. Wifi. passport.wikipedia. The new mobile will be a mobile computer. the Telecommunication (3G.