Secure Mobile Payment Service Mobile Term Paper

Excerpt from Term Paper :

The customer owes money to a friend or wishes to transfer money to someone. In this situation there are three options available. If the two parties are in the proximity of each other the payee's device sends the transaction data over to the payer's handset using either IrDA, BT, or RFID communication. If the two parties are not in the position of using a direct link, the payee can send the necessary information over the air (SMS, IM) to the other party. In certain cases the payer initiates a transfer while the payee may not even be aware of the fact that he or she is going to receive money. In this case the payer can manually input all necessary information into the handset. Depending on the transaction value the payer in all three cases has the option to select either its bank or MNO for processing the payment. The payee will receive the payment notice on its mobile handset in real time.

A merchant may not have a regular POS terminal either because of the cost implications, or the type of services offered, or because of the mobility of the operation. (e.g. taxi driver). With the mobile merchant module in the handset of the seller, the merchant is capable of providing the necessary payment information to the customer. The customer initiates the payment through its bank or mobile operator and the merchant receives the payment notice onto the mobile device. As this payment notice serves as a payment guarantee of the merchant's bank, the products and services can be provided risk free to the customer real time. Optionally it is also possible to digitally sign the original payment information, in which case the message from the merchant to the customer serves as a legally acceptable invoice.

SEMOPS facilitates not only retail but also business-to-business transactions. There are different payment types that can be selected by the users like prompt payment, value date, or recurring payments. Cross border payments are facilitated with the conversion feature offered. The real time refund handling, which is also a standard function, makes the SEMOPS service unique. Payments are not limited by values, as both micro and macro transactions can be performed.

With SEMOPS, remote parking payment is possible, avoiding the hassle with meters and coins. The customer sends the payment through its payment processor to the parking company, who starts running a temporary parking permit. When the controllers find a car without a valid ticket they first communicate with the central database and verify whether the car has a valid mobile parking permit or does not. Total response time is about 25-30 seconds.

Customers can buy their tickets to events by using WAP or web services and paying with SEMOPS. When the merchant receives the payment confirmation, the ticket is sent electronically in the form of an SMS message to the mobile handset. When the ticket is presented for control, the controller reads the screen with a special device and checks the validity of the ticket.

Customers can also use this service to pay at a vending machine. The vending machine is capable of transferring the transaction details to the customer like a POS terminal, and upon receiving the payment confirmation, it provides the selected product. This payment solution can also be tied into the remote management of the vending machines. Customers can also select the amount they wish to withdraw from an ATM, receive the transaction details, approve the transaction and when the ATM receives the authorization to issue the money, customers can take the cash. The ATM behaves like a vending machine selling cash.

SEMOPS facilitates improved store logistics and could allow customers to check themselves out at unmanned POS terminals. The terminals read the price tags, transmit the payment information to the customer's handset, and receive the payment confirmation from the bank. This self-service solution allows customers to avoid standing in lines during peak hours, and also increases the capacity of the stores.

A good combination of mobile and Internet transactions can be realized in case of electronic bill presentment and payment. The total amount of an invoice is sent to the mobile device, while detailed figures can be accessed over the Internet. Should customers be interested only in the bottom line, they can perform the SEMOPS payment from the handset directly, or alternatively, if the details need to be known as well, the same invoice is accessible and payable from the Internet.

To ensure the security, simplicity and speed that are the basic minimum criteria of an electronic payment service the SEMOPS payment process is assisted by software applications at all partners involved. Customers and merchants receive the modules from their own banks and mobile operators. In the mobile environment the customer and merchant modules are tailored to the specifics and technical quality of the handsets, as the design contains SIM card based applications, but also the more modern Java and operating system (OS) based modules as well. Merchants may also have a multi-purpose POS terminal.

The versatility on the front-end side meets a homogenous, unified back-end infrastructure (payment processor module, Data Center) catering for the combined service. Any type of mobile phones, in any network environment, using practically any communication channels and a number of different transport layers, can use the service. This feature allows the users to always select the most adequate method for communication (IrDA, Bluetooth, RFID, GSM, GPRS, 3G) based on the handset specifics, available transaction channel and the transaction type. The communication can be SMS based, data communication or even instant messaging.

In conclusion, the SEMOPS service provides benefits to all its participants, compared to any existing solutions. Benefits may take the form of comfort, security, business or financial conditions, and will reach the necessary level to provide incentives for introducing and using the service.

Pilots involving Greek and Hungarian banks are underway, but banks have a cautious approach to new technology and new services. However, SEMOPS, one of the largest mobile-based it projects co-funded by the European Community, has a bright future - it will start deployment across Europe in 2006.

The SEMOPS mobile-to-mobile payment solution is revolutionizing the electronic payment world. Never before was it possible to transfer money directly between customer and merchant, payer and payee, real time, without any central registration, without belonging to a small selected group. The SEMOPS service provides this unique transaction to all clients, customers and merchants. Based on the service offering of the payment processors, payees may have instant access to the money transferred to them.

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