By Brian Albright, Field Technologies magazine
Mobile payment applications require stringent security, flexible platforms.
Payment applications are steadily increasing in mobile technology deployments. The expansion of high-bandwidth wireless networks, and the slow but steady adoption of new technologies like near field communication (NFC) are helping expand payment solutions into new markets like onboard product sales in transportation, special events parking, portable/temporary retail installations, and mobile sales at sporting and other events. There has also been an increase in point-of-activity payment for roaming agent, tableside ordering, and field service applications.
By being able to accept payments anywhere, companies can accelerate the cash cycle and develop new types of sales opportunities. “Analytical data that was once available only at the corporate office is now available to the user in the field, providing a greater level of customer-centric selling,” says Bryan Wesolek, president of DLI. “This data provides ubiquity which end users can take advantage of when creating new upselling opportunities.”
Consumers are also driving this adoption, as credit cards have become the payment option of choice, even at outdoor events. “Part of the common denominator for the necessitation of mobile payment technology is very simple,” says Eric Lenhard, business development manager at Casio America. “If there is no power or wired communication medium, there is very little choice.”
Adoption is still low, but interest is increasing for mobile applications where service professionals can deliver an electronic bill and payment option to improve customer service. “The primary focus today is on customer care applications that facilitate bill presentment and payment,” says Chad Dunavant, VP of product management at CSG International. “However, the next phase will be focused on e-commerce and self-service account activities.”
In addition to customer convenience, there are a host of benefits to deploying mobile payment solutions, which “range from improved customer service and satisfaction to significant cost and productivity savings from the reduced need for expensive fixed-base cash registers and the space required for checkout lines just to handle peak times, seasonal shopping, or guest volume,” says Bob Zink, VP of sales and marketing at MobileDemand. “Accepting cashless payment at the point of delivery also has major cost and cash flow savings for home delivery companies in terms of infrastructure savings.”
Future-Proof Hardware For Emerging Payment Technologies
Improvements in mobile computing technology have helped advance the spread of mobile payment solutions. Mobile devices have benefited from improved power management, longer battery life, integrated radios, and smaller, easy-to-integrate card readers.
For a mobile payment application to be truly future-proofed, devices should support Web-based applications and include the ability to run multiple types of radios. NFC and RFID compatibility can ensure the hardware will be able to support emerging payment solutions beyond the traditional mag-stripe credit card.
Companies should also consider other forms of mobile payment, including customers purchasing goods via the Web on their mobile phones. Web applications should be optimized for users who visit the site on their mobile browsers. Leveraging technologies like HTML5 for application development can provide that type of flexibility.
“An all-encompassing yet standard platform is the best for deployment and ongoing support,” Lenhard says. “An industry standard operating system such as Windows Mobile ensures not only comfort in one’s investment, but also offers the widest selection of applications and utilities.”
Mobile Devices, Wireless Networks Must Be Secure
While most of the technological hurdles for the mobile POS have been overcome, security remains a top concern. Payment processing security is governed by standards issued by the Payment Card Industry (PCI) Security Standards Council. While specific mobile payment standards have yet to be issued, mobile POS solutions should follow the guidelines and industry best practices for encryption and authentication.
“As with the fixed-station POS devices, mobile applications require the same level of PCI compliance,” Wesolek says. “While Windows 7-based devices do not require PCI certification, it is best practice for the peripherals that support payment processing to be independently lab tested.”
He adds that wireless LANs should support multiple security protocols (e.g. WPA2, WEP, EAP, EAP-FAST) to provide greater flexibility when setting a security standard. “When implementing a WWAN [i.e. cellular] solution, end users should create a secure Web portal or VPN [virtual private network] for data transfers, which is dependent upon their current fixed point of sale application,” Wesolek says.
Zink recommends a wireless intrusion prevention system (WIPS) to monitor wireless devices on the network, and block rogue wireless access points that could be used by hackers to monitor the network for payment data. He notes that other emerging technologies could improve the security of these solutions as well.
“The introduction and growth of smart card technology in the United States will greatly enhance security over current mag-stripe credit cards. And, the use of contactless NFC or PIN-and-chip technologies will advance the encryption and security of e-payment even more,” Zink says. “End users should evaluate their mobile hardware provider on the basis of the products they have that can migrate to these technologies, if not already available.”
The introduction of new forms of payment (like NFC and RFID-enabled cards) will influence how mobile payment solutions are designed in the future. The Europay, MasterCard, and VISA (EMV) standard for smart cards/IC cards helps ensure authentication of card payments, and there has been a push for this technology to be adopted in the United States. These PIN-and-chip cards combine a PIN with an onboard computer chip for user authentication, which can help reduce card fraud.
“NFC and RFID in tandem with intelligent mobile computers will continue to accelerate the mobile payment/purchase environment,” Lenhard says. “We are already seeing large entities like Google focused on driving this forward, and there can be no doubt this will continue to grow.”
In addition to solutions that involve service providers accepting payment from customers on a mobile device, there will be an increase in customerfacing mobile payment options that use smartphones combined with other technologies. “It is very possible that in the not too distant future, customers will receive a physical statement or email from their provider, scan a bar code, then authenticate and pay from their device,” Dunavant says. “This will further drive the acceptance of paper suppression and speed up the remit process for an operator.”
The mobile payment landscape is in flux, with a mix of traditional mobile POS solutions and customer self-service options evolving in tandem, while new types of payment options gradually come to market. Companies interested in increasing sales while improving customer convenience should take care to ensure these mobile applications are designed in the most flexible, standards-based fashion so that they can continue to evolve right along with the technology.