Mobile Payments 101

Pragati Ogal RaiMobile Technology Evangelist, eBay Inc.

@pragatiogalgithub.com/pragatiogal

Agenda

Journey of Payments

Current Landscape

– How online payments work today?

– Mobile payment infrastructure

– Mobile payments use cases

– Security considerations in mobile payments

Emerging Trends in Mobile Payments

Journey of Payments

Livestock Warfare

Fruits and grains

Old Roman Empire Gold Coin Ancient Indian Gold Coin

Ancient Greek Silver Coin

Emperor Kublai KhanYuan Dynasty

1215-1294 AD

Paper Money500 Cash 1269-1365

Kublai Khan issued paper money known as Chao

http://en.wikipedia.org

Marco Polo was a Venetian merchant traveler whose travels are recorded in II Milone.

He introduced Europeans to Central Asia and China.

Marco Polo1254 – 1324 AD

Curtsey Diners club

First Diners Club credit cards were given out in 1950

Founded in 1998, PayPal allowed payments and money transfers through the Internet.

http://www.prlog.org

Logos!

Worldwide mobile payment transaction values will surpass

$171.5 billion in 2012, a 61.9 % increase from 2011Gartner, May 2012

1.8 billion consumers globally will buy digital goods via their

mobile in 2011, this will rise to 2.5 billion in 2015.

Juniper Research, 2011

Current Landscape

How Online Credit Card Payments Work?

AuthorizationSettlement

Four Corner Model

Two institutions– Issuing bank – Acquiring bank

Two processes– Authorization– Settlement Consumer Merchant

Consumer Bank Merchant Bank

Two entities– Consumer– Merchant

Payment Gateway

Consumer Merchant

Consumer/Issuing Bank

Acquirer/Merchant

Bank

Authorization

< 3 sec

Consumer Merchant

Consumer/Issuing Bank

Acquirer/Merchant

Bank

Settlement

Infrastructure

Clients Merchants

Mobile Payments Ecosystem

What are Mobile Payments?

Consumer uses a mobile device

Merchant uses a mobile device

Both consumer & merchant use a mobile device

How do you define mobile payments?

Remote Mobile Payments

Send and request money

SMS based payments

Mobile banking

Application/ Browser based

payments

Carrier Billing

Fahad.com

Proximity Mobile Payments

Barcode Scanning

Point of Sale

NFC

Bluetooth

RFID

Accelerometer

Wikepedia.org

Your Definition of Mobile Payments

What does a Merchant want?

Quick, easy, hassle free

Security compliance

Fraud prevention systems

Current and up to date system

Reliable

Pricing

What does a Consumer want?

Fast

Secure

Easy

Choice of payment providers

Biggest Challenge?

Security

Diverse & Evolving Mobile Ecosystem

Wireless Networks

Security

Developers

Carriers

OS VendorsOEMs

Services & Infrastructure

Security Issues

Device security

Privacy

Fraud & Risk

Client-merchant authentication

Client authorization

Evolving standards

PCI Standard Council

Independent organization

Develop common set of payment standards

– PCI-DSS v2.0

– PCA-DSS

– PCI-PTN

– PCI-P2PE

PCI-DSS V2.0

Build and maintain a secure network

Protect cardholder data

Regularly test and monitor networks

Maintain an InfoSec policy

Maintain vulnerability management program

Implement strong access control measures

Emerging Trends….

Mobile Payments are Here to Stay

"We expect global mobile transaction volume and value to

average 42 percent annual growth between 2011 and

2016, and we are forecasting a market worth $617 billion

with 448 million users by 2016,"

Sandy Shen, research director at Gartner, May 2012

M-payments is a Global Phenomenon

Eastern Europe will see the highest user growth

between 2011 and 2016. Asia/Pacific will have the

most m-payment users, but Africa will account for the

highest revenues.Gartner, May 2012

M-payments is a Global Phenomenon

M-pesa in Kenya

Chipknip

GeldKarte

Royal Canadian Mint

http://pritamkabe.wordpress.com

29

Mobile brings New Use Cases

Promotions & coupons

Location-based services

In-store research

Self-scanning & self-checkout

Global Social Commerce

Loyalty

Online Commerce

Mobile Wallet

Shopping Lists

Changing Form of Payments

Money becomes more abstract

Royal Canadian Mint Digital goods Anonymous payments:

Bitcoin

Less cash society Cashless society

Increased Collaboration among M-payment

Stakeholders

Improvements in Payment Security

Consumer awareness

Improved device security

Biometric identification

Evolving security standards like PCI Security Standards

Summary

Mobile payments are here to stay

Define what mobile means to your business

Think beyond the hype

Security, trust, and safety is of paramount importance

Pragati Ogal Rai

@pragatiogal

http://www.slideshare.net/pragatiogal