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.

Audience:

• Mobile Network Operators
• Mobile Payment Service Providers
• Mobile Software Developers
• Mobile Security Specialists
• Mobile Web Applications Developers.
• State/Federal Finance Professionals

• Mobile payments can provide cost savings, improved cash forecasting, and straight-through processing.
• Edy from BitWallet is the market leader, accepted in more than 71,000 convenience stores, bookshops, and coffee chains as well as at vending machines.
• MoreMagic's product range enables dynamic pricing and payment of a wide variety of network services and applications over all 2G, 2.5G, and 3G networks.
• TextPayMe service is now powered by Amazon Payments. This new service allows user to send and receive money through both the mobile phone and the TextPayMe website.
• Pay-By-Touch was a privately held company which enabled consumers to pay for goods and services with a swipe of their finger on a biometric sensor.
• SmartPay provides remote payment services in China under the brand name ''Jieyin''.
  

Abstract

Introducing Mobile Payments

Introduction

Dedication

Definition of Mobile Payment

Who Is Using Mobile Payment

Market Drivers

Requirement of Mobile Payment

Challenges

Standards

Business Models

Regulatory Issues

Current Technology

Mobile Payment Characteristics

Simplicity and Usability

Universality

Interoperability

Cost

Speed

Security, Privacy and Trust

Cross Border Payments

A Generic Architecture for Mobile Payments

Short Message Service (SMS)

Unstructured Supplementary Services Delivery (USSD)

WAP/GPRS

NFC

Mobile Payment: Standards and Methods

Open Financial Exchange (OFX)

GOLD

Overview

The International Gold Community

GoldGrams

Standard Gold

Interactive Financial Exchange (IFX)

RFID

Overview

How does RFID work?

RFID Standardization

eCheck

STEP 1 - Select a Service

STEP 2 - Enter Information

STEP 3 - Accept Terms

STEP 4 - Complete Details

STEP 5 - Confirm Details

STEP 6 - Digital Receipt

Bio-Metrics

Overview

Bio- Metric Module

(National Automated Clearing House Association) NACHA

Financial Services Technology Consortium (FSTC)

Bank Internet Payment System (BIPS)

Internet Keyed Payment Protocols (IKP)

OpenSSL

Overview

The SSL Protocol

Overview

SSL Server Authentication

SSL Client Authentication

An Encrypted SSL Connection

Ciphers Used with SSL

The SSL Handshake

Short Message Service (SMS)

Secure Electronic Transaction (SET)

Overview

Technology

Smart Cards

Overview

Smart Card Standards

Types of Chip Cards

Contact Cards

Card Function Trade-Offs

Memory Cards

Straight Memory Cards

Protected / Segmented Memory Cards

Stored Value Memory Cards

CPU/MPU Microprocessor Multifunction Cards

Contactless Cards

Combination Cards

Operating Systems

Fixed File Structure

Dynamic Application System

Categories of Smart Cards

Integrated Circuit (IC) Microprocessor Cards

IC Memory Cards

Optical Memory Cards

SIM

STK

Java Card

Mobile Payment Solutions

Overview

Credit Card Based M-Payment

Mobile Payment Process

Data Collection

Use of Mediation Solutions

Mobile Payment Technologies

Biller Direct Model

E-Mail Billing Model

Consolidator Alternatives

Thick Consolidator Model

Thin Consolidator Model

Consumer-Centric Aggregation

Use of Portals

Service Bureau

Reasons to Outsource to a Service Bureau

Focus on core business opportunities/issues

Reduce Operating Costs

Conserve Capital

Speed to Market

Future-proof Services

Create a Variable Cost Structure

Application Service Provider

Invited Pull

Comparison of Business Models

Around-the-clock Availability

Easy User Interfaces

Easy and Direct Access to Historical Billing Data

Bill and Transaction Search Capabilities

Information Management

Multi-channel Bill Presentment

Multiple Payment Options

Consolidated Payment File

Tightly-integrated Bill Presentment and Payment

Exact Replicas of Printed Bills

Customized Email Notifications

Exception Handling of Email Notifications

Automated Enrollment

Integrated Customer Service

Mobile Payment Provider

BitWallet Inc

Overview

Fujitsu

Overview

MoreMagic

Overview

Obopay

Overview

Obopay Mobile Payment Transactions

Standard Obopay Fees

Obopay Prepaid MasterCard® Fees

Text PayMe

Overview

Pay by Touch

Overview

PayPal

Overview

Fees

SmartPay

Overview

ViVOtech

The Future of Smart Payments

The Future of Money

Conclusion

References

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