Secure Payment in Mobile Business: A Case Study

Secure Payment in Mobile Business: A Case Study

Chitra Subramanian (Independent Researcher, Australia)
DOI: 10.4018/978-1-60566-156-8.ch053
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Abstract

Mobile commerce offers consumers the convenience and flexibility of mobile services anytime and at any place. Secured and private mobile business processes using a mobile gadget for payments are essential for the success of mobile commerce. Mobile payment is the process of two parties exchanging financial value using a mobile device in return for goods and services. This chapter is an analysis of the secure mobile payment services for real automated point of sale (PoS), which are frequently used in terminals such as vending machines.
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Background To Case Study

Mobile Payment (M-payment) is a critical component in m-commerce applications. According to the Wireless World Forum, M-payment on mobile devices will provide excellent business in coming years (Jerry Gao, 2005). Payment systems can be used by wireless based merchants, content provider, information and service providers to process and support payment transactions. Thus, the study of mobile payments is crucial to the success of mobile commerce. The discussion in this chapter, with respect of security in mobile payments, revolves around a case study. This case study illustrates two important factors which are essentials for a successful secure transaction and mobile payment systems involved currently. These factors are described in greater detail here.

Secure Transaction Essentials

Four properties are always considered essential for a secure transaction. These properties are authentication, confidentiality, integrity, and non-repudiation (Seema Nambiar, 2004). Authentication is concerned about verifying the identities of parties in a communication and confirming that they are who they claim to be. Confidentiality is about ensuring that only the sender and intended recipient of a message can read its content. Integrity is concerned about ensuring the content of the messages and transactions not being altered, whether accidentally or maliciously. Non repudiation is about providing mechanisms to guarantee that a party involved in a transaction cannot falsely claim later that she did not participate in that transaction (Seema Nambiar, 2004).

Major M-Payment Systems

Major M-payment Systems can be classified as:

  • Account based Payment Systems

  • Mobile Wallets

  • Mobile Point of sale/service Payment Systems

Account Based Payment Systems

In account based payment systems, each customer is associated with a trusted third party (Chen, 2003). Transactions were either a post paid payment option or prepaid payment option. Here we can discuss about three types of account based payment systems.

  • Mobile phone based payment systems - where customer can purchase goods or services through mobile phones. Example: Buying ringtones or subscribing for daily weather details.

  • Smart card payment systems – where commuters, who could use a card to pay their fare at subway turnstile instead of standing in line to buy a token. People would hold the card--or phone or other device containing a card--within about 10 centimeters of a terminal, which would use wireless transmissions to send payment information.

  • Credit card m-payment systems - where customers can make payments on mobile devices using their credit cards. A perfect example would be customers purchase goods from Ebay and pay via credit card.

Key Terms in this Chapter

Automated Vending Machine: Automated vending machines are outfitted with an IrDA, Bluetooth or RFID, a kind of direct communication device that is capable of transferring the transaction details to the customer.

RFID (Radio-Frequency Identification): An automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags. RFID is a technology that incorporates the use of electromagnetic or electrostatic coupling in the radio frequency portion of the electromagnetic spectrum to uniquely identify an object.

Bluetooth: Bluetooth is a specification for the use of low-power radio communications to wirelessly link phones, computers and other network devices over short distances.

Mobile Payments: - Mobile payment is payment using the mobile phone at the point-of-sale instead of using credit or debit cards.

Micro Payments: Micropayments are means for transferring very small amounts of money, in situations where collecting such small amounts of money with the usual payment systems is impractical, or very expensive, in terms of the amount of money being collected.

Mobile commerce: - M-commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants.

Mobile Wallet: Mobile wallet is mobile phone that has functionality to supplant a conventional wallet and unlike mobile commerce, is a much more versatile application that includes elements of mobile transactions.

MNO: A mobile network operator (MNO), also known as wireless service provider, wireless carrier, or cellular company, is a telephone company that provides services for mobile phone subscribers.

IR – Infrared (IR) Radiation: Electromagnetic radiation whose wavelength is longer than that of visible light, but shorter than that of terahertz radiation and microwaves.

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