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Vertical Applications
- Financial Industry -

Payment Industry Applications

  • Wireless Payment by handheld devices like Palm - beam Palm to a credit card terminal using infra red now and Bluetooth in future. The POS credit card terminal has an infra red device attached to it.
  • Cashless payment without using conventional credit cards
  • Mobile wallet initiatives 

The Requirement ...
To provide a comprehensive infrastructure (software for the retailer processing a transaction, consumer software for handheld device, backend payment and account reconciliation application infrastructure at a centralized processing center - akin to credit card processing by Visa or Master Card, the security mechanism, etc) so that an end-to-end transaction can take place between a consumer and card or wallet holding organization.

Factors & Issues in Web-based Mobile Payment Application 

  • Lack of standards
  • End-to-end security issue
  • Retailer-processing center integration problems - too many variables in OSes.
  • High transaction processing capacity at the backend application processors - see Visa's initiative to use Sun Solaris that is claimed to handle 10,000 transactions per second
  • Lack of payment infrastructure 

Major Vendors Initiatives 

  • Palm and Visa Partnership - Palm Inc. has started an initiative with Visa to allow consumers to use Palm devices to beam credit card information to POS terminals through an Infra Red (IR) connection.  While this is an early stage trial and pilot, it is significant to see two major players involved in getting users to modify their individual payment methods.
  • Visa International has rolled out a high-transaction payment infrastructure (consisting of Cisco networking gear and Sun Solaris J2EE processors) for online transactions. This is expected to be enhanced to allow mobile commerce. For more info, see Information week story www.informationweek.com/796/payments
  • City Group made a deal with AOL- this will allow AOL subscribers transfer funds and make payments for web purchases
  • Cybercash is an online payment processor - charges 15 cents/transaction , plus set up fee of $99 for existing and $499 for new customers (mid 2000 pricing)
  • SNAZ Mobile Wallet is related but not exactly a payment system.  It facilitates payment for buying online multiple items from different merchants. 
  • Person to person payment systems - see www.propay.com - This allows any two people exchange money anywhere and at anytime.  Since this is a paradigm shift to replace hard cash with electronic cash without the Federal Banking system of each country or a credit card institution like Visa or master card, it may find consumer resistance.
  • For three months, Macdonald hamburger chain has been testing a new wireless payment technology in nine restaurants in Chicago and four in California. Working with Exxon Mobil, McDonald’s is enabling its customers to use their Mobil Speedpass transponders to swipe pass special cash registers to pay for their meals. For more, go here.
  • VeriSign has agreed to supply new trust engines to be embedded in wireless communication devices of DoCoMo’s i-mode 3G services. For more, go to the news page.

Early Adopters
See the above list.

Business Case Justification - Pretty good as compared to a transaction where the retail clerk swipes the credit card.

MobileInfo Advisory and Comments: This is a complex area of software application integration between payment processing centers, retailers. and consumers. Wireless must be treated as an add-on to this and stand-alone payment solutions will not survive for long.

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