presentation on

MOBILE PAYMENT SYSTEMS

PRESENTED BY:

Krishnaganth T A
 AGENDA
• introduction of mobile payments

• overview of mobile payments

• security issues

• pros and cons of mobile payments

 introduction
• Mobile payments, also known as m-payments, may be defined as
any payment where a mobile device is used to initiate, authorize
and confirm an exchange of currency in return for goods and
services.

• Mobile devices include mobile phones, PDAs, wireless tablets

and other devices that can connect to mobile telecommunication
networks.
 introduction
• Mobile payments can be an alternative to cash, checks, credit
cards and debit cards, and can make possible new opportunities
for commerce convenience.

• Although the concept of using non-coin-based currency systems

has a long history, it is only recently that the technology to support
such systems has become widely available.
 introduction

• Asia and Africa will observe significant growth for mobile money
with technological innovation and focus on interoperability
emerging as prominent trends by 2018.
 overview
Mobile payment characteristics :
• Simplicity and Usability: The m-payment application must be user
friendly with little or no learning curve to the customer. The customer
must also be able to personalize the application to suit his or her
convenience.
• Universality: M-payments service must provide for transactions
between one customer to another customer (C2C), or from a business
to a customer (B2C) or between businesses (B2B). The coverage
should include domestic, regional and global environments. Payments
must be possible in terms of both low value micro-payments and high
value macro-payments.
 overview
• Cost: The m-payments should not be costlier than existing payment
mechanisms to the extent possible. A m-payment solution should
compete with other modes of payment in terms of cost and
convenience.

• Speed: The speed at which m-payments are executed must be

acceptable to customers and merchants.

• Cross border payments: To become widely accepted the m-payment

application must be available globally, world-wide.
 overview
• mobile payment types:

 proximity payments

 remote payments
 overview
• proximity payments:
 overview
• remote payments:
 overview
• payment models:

 Bank account based payments

 Card-based payments
 Cloud based mobile payments
 Carrier billing
 Contactless payments NFC
 QR code payment
 Audio signal based payments
 Mobile wallet
 overview
• Bank based payments:

• Banks have several million customers and telecommunication operators also

have several million customers. If they both collaborate to provide an m-
payment solution.
• In this model, the bank account is linked to the mobile phone number of the
customer. When the customer makes an m-payment transaction with a
merchant, the bank account of the customer is debited and the value is
credited to the merchant account.
 overview
• Card based mobile payments:

• In the card based m-payment model, the credit or debit card number is linked to
the mobile phone number of the customer. When the customer makes an m-
payment transaction with a merchant, the credit card is charged and the value
is credited to the merchant account.
• Credit card based solutions have the limitation that it is heavily dependent on
the level of penetration of credit cards in the country. In India, the number of
credit card holders is 15 million. Only this small segment of the population will
benefit in the credit card based model. Though limited in scope, there may be
high demand within this segment for a payment solution with credit cards and
also, may provide high volumes of transactions.
 overview
• carrier billing:

• The consumer uses the carrier billing option during checkout at an e-commerce
site—such as an online gaming site—to make a payment. After two-factor
authentication involving a PIN and One-Time-Password (often abbreviated as
OTP), the consumer's mobile account is charged for the purchase. It is a true
alternative payment method that does not require the use of credit/debit cards or
pre-registration at an online payment solution such as PayPal, thus bypassing
banks and credit card companies altogether. This type of mobile payment
method, which is extremely prevalent and popular in Asia, provides the following
benefits:
 overview
• benefits:

• Security – Two-factor authentication and a risk management engine prevents

fraud.
• Convenience – No pre-registration and no new mobile software is required.
• Easy – It's just another option during the checkout process.
• Fast – Most transactions are completed in less than 10 seconds.
• Proven – 70% of all digital content purchased online in some parts of Asia uses
the Direct Mobile Billing method
 overview
• Cloud based mobile wallets:

• Amazon pay,Google pay, PayPal use a cloud-based approach to in-store mobile

payment. The cloud based approach places the mobile payment provider in the
middle of the transaction, which involves two separate steps.
• First, a cloud-linked payment method is selected and payment is authorized via
NFC or an alternative method. During this step, the payment provider
automatically covers the cost of the purchase with issuer linked funds.
• Second, in a separate transaction, the payment provider charges the
purchaser's selected, cloud-linked account in a card-not-present environment to
recoup its losses on the first transaction.
 overview
• Mobile wallet:

• A m-payment application software that resides on the mobile phone with details
of the customer (and his or her bank account details or credit card information)
which allows the customer to make payments using the mobile phone is called as
a mobile wallet.
• Customers can multi-home with several debit or credit payment instruments in a
single wallet. Several implementations of wallets that are company-specific are
in use globally.
 overview
• Contactless payments NFC:

• NFC is a form of RFID invented by sony and philips in 2002.

• Near-field communication (NFC) is a set of communication protocols that enable two
electronic devices, one of which is usually a portable device such as a smartphone,
to establish communication by bringing them within 4 cm (1.6 in) of each other.
• Near Field Communication (NFC) is used mostly in paying for purchases made in
physical stores or transportation services. A consumer using a special mobile phone
equipped with a smartcard waves his/her phone near a reader module. Most
transactions do not require authentication, but some require authentication using
PIN, before transaction is completed. The payment could be deducted from a pre-
paid account or charged to a mobile or bank account directly.
 overview
• QR code payment:

• A QR code consists of black squares arranged in a square grid on a white

background, which can be read by an imaging device such as a camera, and
processed using Reed–Solomon error correction until the image can be
appropriately interpreted. The required data is then extracted from patterns that
are present in both horizontal and vertical components of the image.
• To use a QR code payment the consumers scans the QR code displayed by the
merchant with their phones to pay for their goods.They enter the amount they
have to pay and finally submit.This is a more secure card-not-present method
than others.
 overview
• Audio signal based payments:

• The audio channel of the mobile phone is another wireless interface that is used
to make payments.
• Several companies have created technology to use the acoustic features of cell
phones to support mobile payments and other applications that are not chip-
based.
• The technologies Near sound data transfer (NSDT), Data Over Voice and NFC
2.0 produce audio signatures that the microphone of the cell phone can pick up
to enable electronic transactions
 overview
• mobile payment process:
 security issues
• security issues:

• M-commerce is anticipated to introduce new security and privacy risks beyond

those currently found in E-commerce system .
• users of mobile device can be difficult to trace because of roaming of the
users.also the mobile goes online and offline frequently thus attackers would
difficult to trace.
• Another security risk unique to the mobile device is the risk of loss or theft. A
mobile device that stollen or has fallen into wrong hands can invite frauds that
are difficult to track and prevent.
• A major problem in this regard is the lack of any satisfactory mechanism
available at present to authenticate a particular user
security issues
 pros and cons of m-payments
• Mobile Payment Pros:
 They're fast:
• All you have to do to pay is tap your
smartphone to the payment terminal and
authenticate the transaction, usually with your
fingerprint. Then you can walk out of the store.
You don't have to dig through your wallet, swipe
a card, or sign anything.
 They're more physically secure, too:
• If your phone is lost or stolen, a thief won't be
able to run up big credit card bills. Why?
Because your payment information should still
be secured behind a passcode or biometric
authentication (or both). If you're carrying cash
or credit cards, your money is as good as spent
if a thief makes off with your wallet.
 Everything's on your phone:
• You don't have to carry cash or cards around
because everything you need to make a
purchase is on your phone (and you're probably
carrying that anyway).
 They work with rewards programs:
• Most mobile wallets let you add store loyalty or
rewards cards. When you make a mobile
purchase using a credit card in the wallet, it'll
automatically link the purchase to your rewards
program. Thus, you get all the benefits of a
rewards program without having to carry the
card in your wallet.
 pros and cons of m-payments
• mobile payment cons:  They're only supported by certain phones:
 Even they aren't all accepted: • Most mobile payment systems use a technology
called NFC to send transaction data to a
• A store may accept digital payments, but it's
payment terminal — and not all phones can do
unlikely to accept all of them. So you could walk
it. (Walmart Pay is an exception, however, as it
into a retailer that's digital payment friendly but
just requires a cashier scanning a QR code on
still have to use your credit card. For example,
your phone screen.)
Walmart accepts mobile payments, but only
from its own Walmart Pay platform, which only
works at Walmart.  Payments are tied to your phone:
• If your phone is lost or stolen — or even if the
 They're easier to track: battery dies — you're out of luck, because you
can't make payments.
• Every transaction leaves a digital record, which
makes some people concerned about privacy.
While these certainly aren't posted publicly,
there's always the fear of hackers.
THANK YOU...!