There’s been a lot in the media recently about the latest phase of Mobile Commerce / Mobile Payment - i.e. using ’smart’ media and devices for payment purposes.
Mobile Billing
The first step in Mobile Commerce was simply utilising the existing charging mechanism of the mobile - which was the call charge / itemised phone usage bill. A great example of this was Nokia’s 1998 ’Dial-a-Coke’ Vending Machine experiment, where customers simply dialed a phone number next to each vending option - the charge would then appear itemised on their phone bill, and as soon as the number was logged, the vending machine would dispense the relevant can / bottle, and send confirmation by way of SMS text notification. This was a rather simple and elegant solution in one way, but made more complex by the large number of digits a phone number typically contains, and the ease of entering the wrong sequence. A few vending machines of this type appeared at Helsinki airport, but the experiment did not lead to any mass take-up of this technology.
Smart Chip Implants
A slightly different approach was pioneered by RFID technology company Applied Digital Solutions (Now PositiveID) - which initially specialised in livestock tagging. In early 2004, members of the Baja Beach Club in Barcelona were given the option of by-passing entrance and bar queues by having a small subdermal chip embedded in their flesh. This ’VeriChip’, the size of a grain of rice, was by proxy a sort of membership card with benefits, and a proximity sensor would sense the presence of the chip, and register the member’s every activity at the club. There are obvious ways in how this could be abused / misused by unscrupulous persons, but it is really quite a good means of personal / pseudo biometric identification. Latterly these chips have been used to store your personal medical data, contact details of nearest and dearest etc. The technology does though have that aspect of ’Big Brother’ about it, and ’Humans as cattle’!
Contactless / Near Field Communication Payments
This has been pioneered by way of Smart Chips, which can transmit and receive information over a mini-network as it were. In the UK, the best-known example of this is the London Transport Oyster Card. Credit Card companies have not been slow with this either, and both MasterCard and Barclaycard / Visa were quick to roll out contactless cards in the guise of PayPass and OnePulse respectively. The Barclaycard OnePulse card has the added bonus of being able to be used as an actual Oyster Card. In essence, for small purchases, with limit currently set at under £15, you can simply wave the card at the paypoint, or else gently tap it with your card - much as you do with your Oyster Card; it is the same technology after all. In Japan, these same Smart Chips have been embedded in mobile phones, and a combination of cards and smart phones is used by most Japanese urbanites to access public transport. The Smart Chip type contactless payment system has not yet found its way into phones in the western hemisphere.
Internet Payment Technologies
The biggest player in Internet transactions technology is PayPal, which was founded in 2000 via the merger of Confinity and X.com and went on to become the main payment engine for eBay - who acquired PayPal in 2002, after it had put eBay’s own ’Billpoint’ system firmly in the shade. PayPal is currently all-conquering, and almost works like an online wallet - housing all your payment cards and even bank account details, for streamlined and super secure online payments. Apple iTunes has its own native payment system, where you enter your card details upon registration for the service, and can then make a purchase through the various Apple Stores - iTunes, App Store and iBooks through simple password verification.
Ticketless Entry / Access
In recent years, travel companies, airlines in particular have made significant advances online, whereby you can remotely check in and print off your own boarding card - meaning that if you’re travelling light, you by-pass most of the queues and go directly to your gate. I first used this system courtesy of British Airways, who were amongst the first to adopt it. More and more transport companies are now adopting this system, as are entertainment venues such as theatres, cinemas and sporting arenas. In London, the parking meter has been in decline for several years now - you are much more likely to need to phone a specific number and pay / activate your parking over a mobile phone, or via some Smart Phone application. In Iceland, we have a singular site ’Midi.is’ (Ticket.is) which handles pretty much all events that would previously have required a box office ticket. With Midi.is, you can buy your cinema ticket at home, and print it off before you go to the cinema. The tickets you print off at home have some kind of barcode matrix which can then be scanned at the venue’s entry points. In the UK, the box office queue of old has simply been switched for the ticket machine queue, were people now queue up to collect pre-booked tickets - it would be so much better if the Icelandic model were adopted here. In our simulated visual above, we foresee the Mobile Phone becoming the ultimate ticketless access device - storing and transmitting ticketing details via its own onboard Smart Card - q.v. and allowing you to purchase ticketless access to your local Odeon cinema - while you’re on the hop - so to speak.
Mobile Hardware
Mobile Hardware / Sofware companies VeriFone and Square each have their own type of credit card reader which clips onto a mobile device, like an iPhone. VeriFone’s PayWare is quite a robust case mechanism, whilst Square’s is little more than a dongle. The real benefit here is that individuals can become merchants and can accept credit / debit card payments - which is a necessary thing in an increasingly cash-less society. In some ways, this is a direct competitor to PayPal - which acts as an intermediary service for credit card payments. I firmly belive credit cards themselves are reaching the end of their useful lives, so I am more in favour of an electronic wallet approach like PayPal’s.
The future of Mobile Payments
In many ways, iTunes is a similar type of system to the VeriChip mentioned above - in that it mirrors a ’Members Club’ system in effect - where you charge purchases to your ’tab’ and get billed a little later. The difference with iTunes is the level of security and control - in that a password has to be entered to verify every purchase. The latest incarnation of the Credit Card relies on a 4 digit pin code - which is still really quite a flawed and relatively insecure system.
Going forward, I see Universal Electronic Wallets - like an evolution of PayPal becoming the way we pay for things in future. It’s not many years ago when I used to leave the house with 4 objects in my possession - Keys, Wallet, Phone and iPod. With the evolution of the SmartPhone, my iPod is now inside my iPhone, so I only carry 3 must have objects on my person. The logical evolution of this is that you will be able to pay for everything with your Smart Phone, which needs to house the contactless ’Swipe / Wave’ technology a la OnePulse, as well as some kind of Universal Electronic Wallet. I love how iTunes operates, but I cannot buy everything I want to via Apple’s own proprietary payment system. PayPal looks the likeliest to be first to produce a fully Universal Electronic Wallet suitable for buying anything and everything from anyone and everyone. I can see the Smart Phone taking on many roles, including Keyless Entry, and even Passport (reducing personal must-have objects to 1), first though, there needs to be a fundamental step-up in security.
Mobile Payment Security
If your Smart Phone is going to carry all your wordly goods and utilites in one device, then it has to be extra secure so that if it falls into someone else’s hands, they cannot ’steal’ your whole life and livelihood from you. The challenge is to find some suitably secure biometric verification system which gives an additional level of security to password and pin code entry. This could be by way of some built-in ’Iris-Scanner’, fingerprint verification, or even a return to the VeriChip first pioneered at the Baja Beach Club. In London alone, according to the Metropolitan Police, as many as 10,000 phones are stolen / misplaced every month!
The technology is definitely capable of doing the task, someone just needs to evolve the security up to a suitable level of protection. In many societies there is stigma attached to personal ID Cards or similar ’Big Brother’ systems. People are quite happy to have a Passport though - what’s the difference? To prevent theft, fraud and other abuses we must have a super-secure system which somehow consistently accurately verifies the identity of the ’cardholder’ of course we need to come up with a new name for that as well ...
