2ND CONFERENCE ON INNOVATIVE TEACHING METHODS (ITM 2017)

28-29 JUNE 2017, UNIVERSITY OF ECONOMICS VARNA, BULGARIA

MOBILE WALLET – FUNCTIONS, COMPONENTS AND

ARCHITECTURE

Kremena Marinova-Kostova
Tsenov Academy of Economics, Svishtov, Bulgaria
k.marinova@uni-svishtov.bg

Abstract. The mobile wallet is one of the newest and most innovative mobile payment
methods. The article aims to describe mobile wallets and to outline their types,
functions and components, which are presented in mobile wallet`s architecture.
Key words: mobile payments, mobile wallet, mobile wallet architecture

1. Introduction
Mobile payments are payment services that are performed through mobile devices
such as mobile phones, personal digital assistants, tablets, etc. They arise as a result of the
massive deployment of mobile communications, wireless networks, mobile Internet and
mobile phones. They can be defined as payment transactions that are performed
wirelessly[CITATION Kra13 \l 1033].
One of most popular mobile payment method is a mobile wallet. It is an electronic
account held on a mobile device that can operate with various bank products and services:
deposit accounts, credit and debit cards, gift certificates, vouchers, etc. which can be used
anytime and anywhere. The mobile wallet can be defined as a container for different
payment instruments which provide payment account information. This method typically
uses "tap and go" or NFC technology to facilitate payment. [CITATION ITU13 \l 1033].
The mobile wallet is a software application with own functions, components and
architecture.

2. Types of mobile wallets

The mobile wallets are several types depending of delivery technology[CITATION
Ait16 \l 1033]:
 NFC - tokenized wallet incorporating a secure element embedded in the
device or using host card emulation (HCE) in the cloud. Most popular type
of wallet;
 optical/ QR code – uses QR code or bar code generated by the merchant`s
POS terminal or customer`s phone;
 digital only – wallet designed only for online use. It has limited application
in real, physical world;

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 2ND CONFERENCE ON INNOVATIVE TEACHING METHODS (ITM 2017)
28-29 JUNE 2017, UNIVERSITY OF ECONOMICS VARNA, BULGARIA

 text-based – SMS based payment application. It functions as a sending

device and POS terminal. It does not require a smartphone – works with any
device that can deliver SMS.
Mobile wallets can also be categorized by the concept of a "vertical" versus
"horizontal" wallet[CITATION Eur14 \l 1033].
A "vertical" mobile wallet is developed by one service provider and is limited to its
mobile services and applications. This wallet is easier to manage and it is much cheaper.
A "horizontal" wallet accommodates multiple mobile services developed by a
different service providers.

3. Mobile wallet functions.

Mobile wallet has the following core functions[CITATION Ait16 \l 1033]:
 secure downloading of the application, registration and access in the wallet;
 secure provisioning of credentials (e.g. user name and password);
 protection of customer-identity information, payment information and
shipping details;
 preselection of payment method;
 storing of information about various numbers of credit and debit cards, bank
accounts, virtual currencies, coupons, etc.;
 the funding from different sources;
 management of multiple mobile payment services provided by different
suppliers;
 person-to-person payments;
 supporting of loyalty programs;
 providing of bank statements.
Beyond the core wallet functionality, each mobile operator may include other features
and services in their wallet as following[CITATION GSM12 \l 1033]:
 contactless payment;
 coupon management;
 receiving and redeeming NFC tickets;
 enabling access to buildings;
 provide specific service parameters.

4. Components and architecture

The mobile wallet is a combination of three components[CITATION Eur14 \l 1033]:
 The payment component itself. This can be payment authentication
application or set of credentials. Its role is to secure and verify payment
transaction.
 The payment user interface. It allows the payer to manage specific payment
services through convenient interface. Depending on a payment component
type it may be a mobile payment application IU or credential manager.
 The umbrella UI component. It manages the portfolio of mobile payment
services available through the mobile device. It is provided by the mobile
wallet issuer.
The architecture of extended wallet, which supports more functions is shown on
figure 1.

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 2ND CONFERENCE ON INNOVATIVE TEACHING METHODS (ITM 2017)
28-29 JUNE 2017, UNIVERSITY OF ECONOMICS VARNA, BULGARIA

Figure 1. Architecture of mobile wallet

Source: GSMA. White Paper: The Mobile Wallet. 2012. p.7.

5. Conclusion
The mobile wallet is the engine of mobile commerce – it stores user data and prevents
entering it every time when a payment is made. In future mobile wallets, will be developed
in two directions – general-purpose wallets which use NFC connectivity and wallets with
extended features such as QR/optical code, which are suitable for both customers and
retailers. That will set new challenges for their functional and component structure, which
will lead to the development and improvement of their architecture.

Literature
Aite. (2016). The Evolution of Digital and Mobile Wallets.
European Payments Council. (2014). White Paper Mobile Wallet Payments. Brussels.

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 2ND CONFERENCE ON INNOVATIVE TEACHING METHODS (ITM 2017)
28-29 JUNE 2017, UNIVERSITY OF ECONOMICS VARNA, BULGARIA

GSMA. (2012). The Mobile Wallet Version 1.0. London.

ITU-T Technology Watch. (2013). The Mobile Money Revolution – Part 1: NFC Mobile
Payments. Geneva.
Kraeva, V. (2013). Vazmozhnosti i perspektivi na mobilnite plashtania. Finansite i
stopanskata otchetnost - sastoyanie, tendentsii, perspektivi. 1, pp. 73-74. Svishtov: AI
Tsenov