Research Seminar on Telecommunications Business II Mobile Payments by Markus Kalliola

Mobile Payments Index: Introduction Technologies Payment methods Future Vision Conclusions

Mobile Payments Introduction mobile payment = transaction first commercial implementation 1997 rapid grow towards present day, but no breakthroughs open standards under development remote or local payment

Mobile Payments Technologies Phone call 1997 Sonera implemented vending machine remote service Advantages easy to use reliable Disadvantages require an unique number for each service operator has to do the billing example paybox

Mobile Payments Technologies SMS short message service remote service Advantages easy to use cheap Disadvantages delay security Example application Helsinki City Transport

Mobile Payments Technologies Browsing technology interact with Internet- and intranet-based services WAP, Wireless Application Protocol Routing HTTP

Mobile Payments Technologies Browsing technology WAP WAP 1.0 was optimized for the early WAP-phones Security problem in gateway WAP 2.0 and TCP/IP

Mobile Payments Technologies Browsing technology WAP Advantages Implementation near to the Internet model Modern phones support WAP Disadvantages Bad reputation Not familiar to the users Business model expensive Forms are hard to design Third party included Huge among of ”bugs” Different versions and implementations Example Vodafone mpay

Mobile Payments Technologies Browsing Technology Java™ MIDP Mobile Information Device Profile Developed as a Java Community Process Some technical aspects Applications extend MIDlet class MIDlets offer portability Uses constant databases Mapping through abstract command OTA, Over-The-Air, support HTTP and HTTPS support Push technology End-to-End Security with PKI

Mobile Payments Technologies Browsing Technology Java™ MIDP Advantages Good technical qualities Broad knowledge among developers Lower network and server load Internet enabled, java Cheap to download Disadvantages Third party included Good for services and games not for payments Competition Example Valimo solution

Mobile Payments Technologies Bluetooth Danish King Harold Bluetooth Created by phone manufacturers Technical aspects Low bandwidth connection Unlicensed at 2.4GHz ISM band 1Mb/sec Link module and radio module Advantages Disadvantages Example CASPAY

Mobile Payments Technologies Infrared, IrDA 1993 Infra-red Data Association Technical aspects Hardware and Software Advantages smallest, cheapest, fastest Disadvantages not designed for payments Example NTT DoCoMo 3G IrFM

Mobile Payments Technologies Payments with PDA 802.11 IEEE, wireless LAN Not very interesting for Mobile environment Solutions exist only for Business to Consumer

Mobile Payments Technologies Mobile wallets A tool in mobile phone Offers a secure storage for personal information Makes buying easier and faster Needs a communication channel

Mobile Payments Technologies Single SIM with PKI Dual chip Dual slot Advantages Disadvantages

Mobile Payments Technologies RFID, Radio Frequency Identification Future or past? Technical aspects Advantages Disadvantages Pilots exist

Mobile Payments Payment methods Prepaid Phone bill Debit card SIM, Smartcard Virtual accounts Phone bill Debit card Credit card

Mobile Payments Future Vision by Mobey Forum Mobile payment should use existing clearing and authentication solutions Three way to implement The development trend Revolutionary?

Mobile Payments Conclusions A lot of nice technologies – why don’t they make breakthroughs Market demands for future Banks or other clearing houses Retail or other end-sale parties Operators Users