Mobile Payment Services

Abstract – This is the 3rd part of a 5-part story on Mobile Financial Services and security therein. This part focuses on Mobile Payments and the opportunities, which come out of this service, and those opportunities, which got added under the Mobile Financial Services umbrella as an independent service.  For many of us, it’s very hard to differentiate this bouquet of services such as Mobile Money, Mobile Banking, Mobile Payments, Mobile Commerce, and Mobile Micro Insurance Services, Mobile Micro Savings & Credit Services, Mobile Data Science after building strong Mobile credit bureau (Mobile Financial Clearing Bureau) and Mobile Financial Services.

How I envision these services may be different for some but I am sure most of us have same mindset. I have very strong belief in “If you are looking for the next big thing, and you are also looking where everyone else is, you are looking in the wrong place”. If we draw a hierarchy of such services it will look like something as below.

Introduction – Excitement increases many folds when the big Bro’s get into play i.e. Apple, Google, Microsoft and Samsung and show the industry a path to walk on and a guarantee that will have lots of action and fun (Some time little more exciting i.e. fireworks). What is happening in mobile payment market as on date can be easily compared with a Tsunami, which is not a new word in technical domain (This one of several currently available UDP-based transfer protocols that were developed for high speed transfer over network paths that have a high bandwidth-delay product). With the power of mobile payments solutions, the end-user can easily derive benefits from services like Airtime top-up and Bill Payment, Merchant Payments.

The mobile payments platform usually allows various users to access services via multiple channels like Web, Mobile App, POS, USSD, NFC, QR Codes and SMS etc. Against escalating security threats on mobile payments, empowerment of merchants, acquirers, and service providers with new commerce opportunities and experiences in store and protection is highest priority or should be highest priority for any mobile payment solution system.

Never blind trust or get over confident on any situation like I was reading some story on internet in which some body said on upper side of Titanic (While it was sinking), if we are sinking why are we hundreds of feet above water then. Some of the best deals around discounts and loyalty-point schemes should appear in mobile payments market as marketers embrace this new way to engage customers.

Main Story – Mobile payments are an opportunity for product & service companies, merchants, billers, service sellers, banks and telco to engage with customers in real time. A mobile payment through mobile wallets or straight from bank account or through soft credit card/system is another interesting question or point of debate as each one has its own pros & con. Mobile Payments may/ may not happen through mobile wallet attached to it is very interesting and debatable as mentioned before but before we go their we need to see the reasoning for both scenarios; First with Mobile Wallet – now questions is how to secure, how to trust, and what will happen to unused money.

In second scenario if there is no mobile wallet and money is pulled directly from soft card or bank account every time transaction happens. New specifications and use cases on interface level are being released for mobile payments adoption and implementation continue to increase. According to survey data from google there are currently over one billion NFC-enabled devices and almost same number of 3G POS machines now in the global marketplace, expected to be 2 billion in the market by the end of 2016. Benefits that can be offered are customer loyalty points or some discounted coupon and that create a direct relationship between consumer and merchant to offer a seamless way to purchase right from their mobile device. This process not only ensures spending for that particular merchant but also locking the consumer on his account, gets spending habits and taste.

At any time we should not forget about Safeguarding sensitive information with encryption and tokenization and where ever its applicable should meets the latest PCI requirements (PCI 4.X approved). For Merchants they need some support in terms of their self-care portals/ interfaces, which should be Simple, intuitive user interface for more consistent and seamless experiences. Multiple form factors for merchants that make a variety of customer interactions possible. The software application should be powerful enough to drive and empower merchants for their day to needs at their end & control like reversal, promotion and evolution of each payment terminals in his store/stores.

On an honest side we’re leading with most innovative solutions, which are developed, and lying on table waiting for problem to come and look at it. The industry is getting dramatically transformed in the retail merchant payments, bill payments and other mobile payments and shopping like buying all sort of tickets or payment USSD-POS space. Current POS machines (Mobile Handsets, NFC terminals, web servers, application servers at back office which process point of sales transactions) are much more than a box that takes card-based payments, USSD push payments, Mobile Apps, NFC, QR codes readers. The family of products at merchant side to receive payments is a major paradigm shift in today’s approach. Mobile payment solution providers are leveraging the power and performance of open and flexible architecture to bring an entirely different level of interaction between consumers and merchants.

With a two-way conversation that can happen at the counter and anywhere in store i.e validation and collection at one end and authentication happens at one end, mobile payment is making the shopping experience more profitable for merchants and more rewarding for consumers. On 25th Oct 2015 , NFC Forum announced the publication of one new and three candidate technical specifications. Available from the NFC Forum website, the specifications deliver new capabilities that support improved RF communication, new and legacy tag support, NFC-V technology and Active Communication Mode. For US markets October was the deadline for merchants to switch from traditional swipe-and-sign credit card transactions to chip-and-pin card systems.

If the merchants don’t invest in new terminals, the liability for transactions with fraudulent credit and debit cards will shift from the card companies to them. So in short speed is essential and very much required to live and survive in this space. In a study it was discovered that It takes 5000 micro second to click the mouse button and we are very happy that we are we very fast but for an financial algorithm processing if that takes 5 micro second more for job its called as looser.

Emotions can be different for different people, region or geographies. For a long time everyone assumed that Mobile payments is only for emerging markets, but now we are continuously watching prepaid solutions being launched in evolved markets as well, or we should say evolved emerging markets. The shift of messaging apps to payments / money transfer apps is clearly seen as social media companies (What’s app, Facebook or twitter) are jumping in and our messaging app becoming payment tools. Each mobile app available in market is different and also all mobile payment systems are different with different features and supports different markets and needs. A system designed in China or in Chinese market will never work in latin america etc so same way facebook app, whats app, alipay app can not do the same job is yes. No system can wait for another system to do something first to see the results and learn out it like we say I cant sit and relax to see what god has decided for me as you never know may be god is also relaxed and waiting to see what I have decided to do for my self.

Conclusion – Where do we go when the era of Central Banking dies? Because it’s about to die — by decentralize organisms that are dynamically scalable and software that can be modified. I am very confident that software systems can and do adoption jobs dynamically. As mobile payment systems head toward primetime, we could be witnessing the beginning of a profound shift in payment culture. As mobile payments evolve, technology providers and financial institutions are working on ways to enhance security and boost customer trust. Precautions include adding new layers of fraud protection, such as tokenisations, where transactions can be completed without sharing sensitive data like a credit card number and its expiration date.