Mobile Payment Services

Mobile Payment Services – 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 that come out of this service, as well as those opportunities that 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, mobile micro-insurance services, mobile micro-savings and credit services, mobile data science, and mobile financial services after building a strong mobile credit bureau (mobile financial clearing bureau).

Introduction – Excitement increases many folds when the big boys get into play, i.e., Apple, Google, Microsoft, and Samsung, and show the industry a path to walk on and a guarantee that it will have lots of action and fun (sometime a little more exciting, i.e., fireworks).

What is happening in the mobile payment market as of today can be easily compared with a tsunami, which is not a new word in the technical domain.  This is 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. With the power of mobile payments solutions, the end-user can easily derive benefits from services like airtime top-up, bill payment, and merchant payments.

How I envision these services may be different for some, but I am sure most of us have the same mindset. I have a very strong belief that “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 something like the one below.

The mobile payments platform usually allows various users to access services via multiple channels like the Web, mobile app, POS, USSD, NFC, QR Codes, 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 or should be the highest priority for any mobile payment solution system.

Never blindly trust or get overconfident in any situation, like I was reading some story on the internet in which some body said on the upper side of the 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 the mobile payments market as marketers embrace this new way to engage customers.

Main Story: Mobile payments are an opportunity for product and service companies, merchants, billers, service sellers, banks, and telcos to engage with customers in real time. A mobile payment through mobile wallets, straight from a bank account, or through a soft credit card or system is another interesting question or point of debate, as each one has its own pros and cons.

Mobile payments may or may not happen through a mobile wallet attached to it. This is very interesting and debatable, as mentioned before, but before we go there, we need to see the reasoning for both scenarios. First, with a mobile wallet, the questions are how to secure it, how to trust it, and what will happen to unused money.

In the second scenario, if there is no mobile wallet and money is pulled directly from a soft card or bank account every time a transaction happens, New specifications and use cases on the interface level are being released for mobile payment adoption and implementation, which continue to increase.

According to survey data from Google, there are currently over one billion NFC-enabled devices and almost the same number of 3G POS machines in the global marketplace, expected to reach 2 billion by the end of 2016.

Benefits that can be offered are customer loyalty points or some discounted coupons that create a direct relationship between consumer and merchant and offer a seamless way to purchase right from their mobile device. This process not only ensures spending for that particular merchant but also locks the consumer on his account and gets to know his spending habits and tastes.

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

On the honest side, we’re leading with the most innovative solutions, which are developed, and lying on the table waiting for problems to come and look at them. The industry is getting dramatically transformed in the retail merchant payments, bill payments, and other mobile payments and shopping like buying all sorts of tickets or payments via USSD-POS space.

Current POS machines (mobile handsets, NFC terminals, web servers, and application servers at the back office that process point-of-sale transactions) are much more than a box that takes card-based payments, USSD push payments, mobile apps, NFC, and QR code readers. The family of products on the 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 the store, i.e., validation and collection at one end and authentication at the other, mobile payment is making the shopping experience more profitable for merchants and more rewarding for consumers. On October 25, 2015, the 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 microseconds to click the mouse button, and we are very happy that we are very fast, but for financial algorithm processing, if that takes 5 microseconds more for the job, it’s called “looser.

Emotions can be different for different people, regions, or geographies. For a long time, everyone assumed that mobile payments were 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 payment and money transfer apps is clearly seen as social media companies (What’s App, Facebook, or Twitter) are jumping in and our messaging apps becoming payment tools.

Each mobile app available in the market is different, and all mobile payment systems are different, with different features and supporting different markets and needs. A system designed in China or in the Chinese market will never work in Latin America, etc., so the same way Facebook apps, WhatsApp apps, and Alipay apps cannot do the same job, yes. No system can wait for another system to do something first to see the results and learn from them. Like we say, I can’t sit and relax to see what God has decided for me. You never know, maybe God is also relaxed and waiting to see what I have decided to do for myself.

Conclusion: Where do we go when the era of central banking dies? Because it’s about to die — by decentralizing organisms that are dynamically scalable and software that can be modified. I am very confident that software systems can 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 tokenizations, where transactions can be completed without sharing sensitive data like a credit card number and its expiration date.