Download - Digital wallet
DIGITAL WALLETA Presentation by Sohil Gupta
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What is Digital Wallet?
Need
Components
Technology
Payment Model
Inner details
Implementation
Challenges
How it is being used right now?
The Future of Digital Wallet
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WHAT IS DIGITAL WALLETA digital wallet allows a user to make an electronic payment
with a financial instrument (such as a credit card or digital cash), and hides the low-level details of executing the payment protocol that is used to make the payment.
It authenticates the consumer through the use of digital certificates or other encryption methods, stores and transfers value, and secure the payment process from the consumer to the merchant.
It can store multiple monetary and identification implements. Monetary implements include cash, debit and credit cards, and stored value cards while identification includes national or state identification cards and driver’s licenses.
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Thick, bulky, unmanageable physical wallet.
Finding particular items is time consuming.
Evocating a lost wallet is extremely hard.
Managing multiple monetary and identification implements is not easy. Monetary implements include cash, debit and credit cards, and stored value cards while identification includes national or state identification cards and driver’s licenses.
Reducing the chance of theft by having only one item to manage.
THE NEED
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COMPONENTS A digital wallet has a software and information component.
The software provides security and encryption for the personal information and for the actual transaction.
Normally, digital wallets are stored on the client side and are easily self-maintained and fully compatible with most e-commerce Web sites.
A server-side digital wallet, also known as a thin wallet, is one that an organization creates for and about you and maintains on its servers. Server-side digital wallets are gaining popularity among major retailers due to the security, efficiency, and added utility it provides to the end-user, which increases their enjoyment of their overall purchase.
The information component is basically a database of user-inputted information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.
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TECHNOLOGYSecure Communication Medium• New NFC (Near Field Communication) chips are already
appearing in smartphones which provide very close range, low power, easy to setup up point-to-point communication.
• NFC acts as the communication medium for exchanging monetary and identification information, such as credit card numbers and receipts, with other devices.
Fast Secure Authentication and Secure Tamper Proof Storage• Secure programmable chips in cell phones will allow the cell
phone to securely store both “digital cash” and the phone owner’s monetary and identification implements.
• This assumes that the cell phone owner secures his digital wallet with a good password. This chip will ensure that thieves are unable to access the digital wallet embedded in the stolen phone. Biometric scanners could also be integrated into cell phones and used for quick and easy authentication.
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PAYMENT MODELS For point-of-sale transactions:-
o A NFC-compatible “reader pad” can be deployed in retail stores.
o When payment is required, consumers place their cell phone on/near the pad and all their valid payment options appear on a display.
o They can then select the payment method they plan to use (cash, specific credit card, etc.) for the transaction.
o The pad transmits the transaction request to the appropriate financial institutions using existing banking protocols provided by NETS, Visa, Amex, and MasterCard.
o The consumer can provide any necessary signatures using a digital signature pad located next to the reader pad.
o Once the transaction is verified and completed, the receipt is automatically sent to the cell phone and stored for future reference.
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For peer-to-peer cash exchange, use the phone’s NFC capability together with an easy to use peer-to-peer cash application. Using the application, the payer can enter how much cash he needs to send to the other person. The payer then taps the cell phone of the payee and the cash is transferred instantaneously using NFC. The recipient is then informed of the exact amount transferred.
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HOW TO SUPPORT CASH TRANSFER
Place cash in the digital wallet either by :a) Topping-up the cash on device at specific top-up
machines which are integrated with existing automated teller machines
b) Online by logging into bank’s online portal and transferring cash into phone.
Transferring that cash to a retailer or another digital wallet by using NFC.
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User Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
WalletController
UserInterface
ClientAPI
UserInterface
API
Instrument Instances
Protocols
Manages all of the financial instrument options contained in
the wallet, for example, it may be
queried to determine which instrument
classes and instances are available to execute a given
payment or other operation
Provides the wallet with an interface to send and receive
messages between wallets and peer
commerce components by setting up a
connection with a remote Communication
Manager.
Manages all of the protocols that the wallet may use to
accomplish various operations, and
invokes protocols to carry out the
interaction between the digital wallet and
the vendors and banks.
Manages information about clients and
groups of clients of the wallet including their
user names, passwords, ship-to and bill-to addresses, and potentially other user profile information as
well
Presents a consolidated interface for the wallet
to the client. The Wallet Controller hides the complexity of the other components of
the wallet, and provides a high-level
interface to the client.
Builds on top of the connection abstraction to support the concept
of a session. Responsible for
encryption of data.Provides a graphical
interface to the services offered by the
Wallet Controllers interface
WALLET ARCHITECTURE
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SECURE ELECTRONIC TRANSACTION (SET) PROTOCOL
Consumer’s Credit Card Issuing Bank1. Consumer makes purchase selects SET
payment option
Merchant
2. Merchant & consumer computers verify each other’s identity SET encrypts order & payment information
Merchant Bank
6 .Monthly statement issued with debit for purchase
3. Merchant software forwards encrypted message
4 . Clearinghouse verifies account & balance with issuing bank
5 . Issuing bank credits merchant account
Secure Line
Clearing House
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WALLET INTERACTION MODEL
Open Session
Instrument Class Negotiation
Protocol Negotiation
Protocol Selection
Instrument Selection
Transaction Execution
Close Session
Open Session
Instrument ClassNegotiation
ProtocolNegotiation
ProtocolSelection
InstrumentSelection
CloseSession
TransactionExecution
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INSTRUMENT CLASS NEGOTIATION
User Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
WalletController
UI Customer Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
VendorController
UI
User Wallet Vendor Wallet
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TRANSACTION EXECUTION
User Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
WalletController
UI Customer Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
VendorController
UI
User Wallet Vendor Wallet
TRANSACTION EXECUTION
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A DIGITAL WALLET MENU The Cards module is used for storing personal
card information, such as payment card (credit, debit, etc.), loyalty.
The card details consist of card info (name, number, etc.), account info (billing address, etc.) and shipping info (shipping address, email, phone number, etc.).
From the wallet, the user can fetch the required information (stored in the ECML: Electronic Commerce Modeling Language) format via the WAP browser and easily fill in the required fields.
The Personal notes function is a notebook where the user can store private information.
From the Settings, the user can switch the wallet code request on and off and change the wallet code when necessary.
An existing Internet standard, already commonly used in Internet
shopping, aiming to produce common methods for transferring transaction information from the
client wallet to the server application.
IMPLEMENTATION Reuse the back-end infrastructure that routes credit card and debit card
information between retailers and financial institutions. Also retain the existing ATM networks and online banking solutions.
Provide retailers with a single NFC-enabled point-of-sale device that replaces the current separate machines for credit cards and debit card purchases.
Extend the physical ATM machines to also provide cash top up/removal services for digital wallets. In addition, consider methods to extend existing online banking solutions to support the digital wallet.
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CHALLENGESMass Market Appeal
Ensuring a mass market appeal for the digital wallet is important to leverage scale economies and the network externality effect. One way to increase the mass market appeal is to make the digital wallet usable for all day-to-day transactions.
Stake Holder DynamicsSatisfying the business and strategic goals of multiple stake holders such as banks, retailers, regulatory bodies, is difficult.
Compelling user experienceA user-friendly wallet interface, easy to use and intuitive is difficult to produce.
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WHAT IS IN YOUR WALLET
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PAYMENT METHOD
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FINANCIAL MANAGEMENT
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COUPONS / CHECK-IN INCENTIVES
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COMPARISON SHOPPING
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TICKETS / PASSES
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THIS IS YOUR WALLET
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Online shopping from mobile devices
Price comparison shopping
Bill Payments
Loyalty Redemption
Personal Information Access
Virtual Personal Organizer
Pre-emptive Purchasing
Device to Device Person to Person Payments
The electronic wallet will be able to facilitate purchasing from mobile phones and PDA’s.
FUTURE OF DIGITAL WALLET
The electronic wallet will allow comparison shopping at any Internet access point. This will provide true price transparency and consumer
control.The electronic wallet allow scheduling payment intervals for electronic bills and invoices and receiving bill reporting from any Internet access point.The electronic wallet will give consumers real time reporting of points
accrued under loyalty schemes and their conversion entitlements.The electronic wallet will become a single access personal financial portal including medical, insurance, motor vehicle, mortgage, superannuation and investment reporting.The electronic wallet will store the user’s calendar, contacts, tasks and lists on the network allowing this to be retrieved and updated from any device. The electronic wallet will be able to pre-empt purchasing based on habits and actually remind the consumer to make purchases on a regular basis.
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REFERENCES Electronic Wallets: Past, Present and Future, by Brent Clark.
Thin is in, The future of Digital Wallets, by Christina N. White for SapientNitro.
Digital Wallet Technology, by Riyazuddin Khan
SWAPEROO, A Simple Wallet Architecture for Payments, Exchanges, Refunds, and Other Operations by Neil Daswani, Dan Boneh, Hector Garcia-Molina, Steven Ketchpel, Andreas Paepcke from Stanford University.
http://en.wikipedia.org/wiki/Digital_wallet
Digital Wallet: Requirements and Challenges by Rajesh Krishna Balan, Narayan Ramasubbu, Giri Kumar Tayi from Singapore Management University and SUNY at Albany.
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