Commerce on the Go: Mobile Payment Systems and Solutions  
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Mobile payment systems have been developed in recent years to facilitate purchases of products, services, and content in mobile and electronic commerce and at physical points of sale. This study focuses on understanding and explaining the adoption of mobile payments by the two main adopter groups - consumers and merchants.

Mobile payments have been implemented with a number of ways using different technical and business models. This report deals with the essential issues, technical aspects of the most interesting solutions are covered and analyzed with a focus on their suitability for use. The acceptance of mobile payment procedures depends on many factors including usability, costs, security and convenience issues.

Despite the predicted success of mobile payments, the market remains immature in most countries. This can be explained by a number of technical and business issues. Mobile technology environments are becoming more complex, uncertain, and disruptive. This report helps the reader navigate these issues.

Target Audience

Table of Contents

About Author. 2
Abstract. 3
Table of Content. 4
Table of Figures. 8
Tables. 9
Key Findings. 10
Target Audience. 11
Introducing Mobile Payments. 12
Introduction. 12
Dedication. 12
Definition of Mobile Payment. 13
Who Is Using Mobile Payment. 13
Market Drivers. 13
Requirement of Mobile Payment. 14
Challenges. 14
Standards. 14
Business Models. 15
Regulatory Issues. 15
Current Technology. 15
Mobile Payment Characteristics. 15
Simplicity and Usability. 15
Universality. 15
Interoperability. 16
Cost16
Speed. 16
Security, Privacy and Trust16
Cross Border Payments. 16
A Generic Architecture for Mobile Payments. 16
Short Message Service (SMS)17
Unstructured Supplementary Services Delivery (USSD)17
WAP/GPRS. 18
NFC. 18
Mobile Payment: Standards and Methods. 19
Open Financial Exchange (OFX)19
GOLD.. 20
Overview.. 20
The International Gold Community. 20
GoldGrams. 21
Standard Gold. 21
Interactive Financial Exchange (IFX)22
RFID.. 23
Overview.. 23
How does RFID work?. 23
RFID Standardization. 24
eCheck. 25
STEP 1 - Select a Service. 25
STEP 2 - Enter Information. 25
STEP 3 - Accept Terms. 25
STEP 4 - Complete Details. 25
STEP 5 - Confirm Details. 25
STEP 6 - Digital Receipt26
Bio-Metrics. 27
Overview.. 27
Bio- Metric Module. 27
(National Automated Clearing House Association) NACHA.. 28
Financial Services Technology Consortium (FSTC)29
Bank Internet Payment System (BIPS)30
Internet Keyed Payment Protocols (IKP)33
OpenSSL. 34
Overview.. 34
The SSL Protocol34
Overview.. 34
SSL Server Authentication. 35
SSL Client Authentication. 35
An Encrypted SSL Connection. 35
Ciphers Used with SSL. 36
The SSL Handshake. 37
Short Message Service (SMS)38
Secure Electronic Transaction (SET)39
Overview.. 39
Technology. 39
Smart Cards. 41
Overview.. 41
Smart Card Standards. 41
Types of Chip Cards. 41
Contact Cards. 42
Card Function Trade-Offs. 42
Memory Cards. 42
Straight Memory Cards. 42
Protected / Segmented Memory Cards. 43
Stored Value Memory Cards. 43
CPU/MPU Microprocessor Multifunction Cards. 43
Contactless Cards. 44
Combination Cards. 44
Operating Systems. 44
Fixed File Structure. 44
Dynamic Application System.. 44
Categories of Smart Cards. 44
Integrated Circuit (IC) Microprocessor Cards. 44
IC Memory Cards. 44
Optical Memory Cards. 45
SIM.. 45
STK. 45
Java Card. 45
Mobile Payment Solutions. 46
Overview.. 46
Credit Card Based M-Payment. 46
Mobile Payment Process. 46
Data Collection. 47
Use of Mediation Solutions. 47
Mobile Payment Technologies. 49
Biller Direct Model. 49
E-Mail Billing Model. 50
Consolidator Alternatives. 50
Thick Consolidator Model. 52
Thin Consolidator Model. 53
Consumer-Centric Aggregation. 53
Use of Portals. 54
Service Bureau. 56
Reasons to Outsource to a Service Bureau. 56
Focus on core business opportunities/issues. 56
Reduce Operating Costs. 56
Conserve Capital56
Speed to Market56
Future-proof Services. 57
Create a Variable Cost Structure. 57
Application Service Provider. 58
Invited Pull. 59
Comparison of Business Models. 60
Around-the-clock Availability. 62
Easy User Interfaces. 63
Easy and Direct Access to Historical Billing Data. 63
Bill and Transaction Search Capabilities. 63
Information Management63
Multi-channel Bill Presentment63
Multiple Payment Options. 63
Consolidated Payment File. 63
Tightly-integrated Bill Presentment and Payment64
Exact Replicas of Printed Bills. 64
Customized Email Notifications. 64
Exception Handling of Email Notifications. 64
Automated Enrollment64
Integrated Customer Service. 64
Mobile Payment Provider. 65
BitWallet Inc.65
Overview.. 65
Fujitsu. 66
Overview.. 66
MoreMagic. 67
Overview.. 67
Obopay. 69
Overview.. 69
Obopay Mobile Payment Transactions. 69
Standard Obopay Fees. 70
Obopay Prepaid MasterCard® Fees. 71
Text PayMe. 73
Overview.. 73
Pay by Touch. 74
Overview.. 74
PayPal. 75
Overview.. 75
Fees. 76
SmartPay. 78
Overview.. 78
ViVOtech. 79
The Future of Smart Payments. 80
The Future of Money. 81
Mobile Payment FAQ's. 82
Conclusion.. 84
References. 85

Table of Figures

Figure 1 - A Generic Model for M-Payments Application.
Figure 2 - RFID
Figure 3 - How biometrics is ideally fitted in mobile payment
Figure 4 - IKP
Figure 5 - SSL Protocol.
Figure 6 - Biller-Direct.
Figure 7 - Consolidator/ Aggregator.
Figure 8 - Application Service Provider.
Figure 9 - Paypal MobileService [Copyright: paypal.com].

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