Post on 27-Jan-2015
description
DIGITAL WALLET
A Presentation by N.RISHNAKUMAR
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Vision
What is a Digital Wallet?
The Need
Components
Technology
NFC
Payment Model
Architecture
Features
Advantages and disadvantages
How it is being used right now?
Reference and Conclusion
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VISIONIn the past few thousand
years, the way we pay has changed just four times—
from barter system to coins, to paper money, to
plastic cards.Now we’re on the brink of the next big shift. We now
want to introduce the digital wallet, which contains the virtual
versions of our existing plastic cards.
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WHAT IS A DIGITAL WALLET
A digital wallet is a software component that allows a user to make an electronic payment with a financial instrument and hides the low-level details of executing the payment protocol that is used to make the payment.
A digital wallet allows a user to make an electronic payment with a financial instrument (such as a credit card or digital cash), and hides the low-level details of executing the payment protocol that is used to make the payment.
It authenticates the consumer through the use of digital certificates or other encryption methods, stores and transfers value, and secure the payment process from the consumer to the merchant.
It can hold other than payments like Bank account details,Credit cards,Gift coupons and reward certificates,Loyalty cards Offers.
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Thick, bulky, unmanageable physical wallet.
Finding particular items is time consuming.
Evocating a lost wallet is extremely hard.
Managing multiple monetary and identification implements is not easy. Monetary implements include cash, debit and credit cards, and stored value cards while identification includes national or state identification cards and driver’s licenses.
Reducing the chance of theft by having only one item to manage.
Upwards of 25% of online shoppers abandon their order due to frustration in filling in forms. (Graphic Arts Monthly, 1999) The digital wallet combats this problem by giving users the option to transfer their information securely and accurately. This simplified approach to completing transactions results in better usability and ultimately more utility for the customer.
THE NEED
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COMPONENTS A digital wallet has a software and information component.
The software provides security and encryption for the personal information and for the actual transaction.
Normally, digital wallets are stored on the client side and are easily self-maintained and fully compatible with most e-commerce Web sites.
A server-side digital wallet, also known as a thin wallet, is one that an organization creates for and about you and maintains on its servers. Server-side digital wallets are gaining popularity among major retailers due to the security, efficiency, and added utility it provides to the end-user, which increases their enjoyment of their overall purchase.
The information component is basically a database of user-inputted information. This information consists of your shipping address, billing address, payment methods (including credit card numbers, expiry dates, and security numbers), and other information.
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TECHNOLOGYSecure Communication Medium• New NFC (Near Field Communication) chips are already
appearing in smart phones which provide very close range, low power, easy to setup up point-to-point communication.
• NFC acts as the communication medium for exchanging monetary and identification information, such as credit card numbers and receipts, with other devices.
Fast Secure Authentication and Secure Tamper Proof Storage• Secure programmable chips in cell phoneswill allow the cell
phone to securely store both “digital cash” and the phone owner’s monetary and identification implements.
• This assumes that the cell phone owner secures his digital wallet with a good password. This chip will ensure that thieves are unable to access the digital wallet embedded in the stolen phone. Biometric scannerscould also be integrated into cell phones andused for quick and easy authentication.
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OPERATION OF NFCNear field communication is based on inductive-coupling.
NFC works using magnetic induction between two loop antennas located within each other's 'near field’.
Operating frequency 13.56 MHz @ the data rate 106 kbit/s to 424 kbit/s.
NFC use an initiator and a target; the initiator actively generates an RF field that can power a passive target.
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How it works???
Sender Mobile sends request to Transfer Money.System checks available balance in Sender’s A/C
from that particular Bank. It transfers money from senders A/C to receivers
A/C.After a successful money transfer it sends a
confirmation notification (SMS/Email) to receiver.Money can be send and/or receive from PayPoints.
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PAYMENT MODELS For point-of-sale transactions:-
A NFC-compatible “reader pad” can be deployed in retail stores.
When payment is required, consumers place their cell phone on/near the pad and all their valid payment options appear on a display.
They can then select the payment method they plan to use (cash, specific credit card, etc.) for the transaction.
The pad transmits the transaction request to the appropriate financial institutions using existing banking protocols provided by NETS, Visa, Amex, and MasterCard.
The consumer can provide any necessary signatures using a digital signature pad located next to the reader pad.
Once the transaction is verified and completed, the receipt is automatically sent to the cell phone and stored for future reference.
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For peer-to-peer cash exchange, use the phone’s NFC capability together with an easy to use peer-to-peer cash application. Using the application, the payer can enter how much cash he needs to send to the other person. The payer then taps the cell phone of the payee and the cash is transferred instantaneously using NFC. The recipient is then informed of the exact amount transferred.
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HOW TO SUPPORT CASH TRANSFER
Place cash in the digital wallet either by :a) Topping-up the cash on device at specific top-up
machines which are integrated with existing automated teller machines
b) Online by logging intobank’s online portal and transferring cash into phone.
Transferring that cash to a retailer or another digital wallet by using NFC.
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User Profile Manager
Instrument Manager
Protocol Manager
Communication Manager
WalletController
UserInterface
ClientAPI
UserInterface
API
Instrument Instances
Protocols
Manages all of the financial instrument options contained in
the wallet, for example, it may be
queried to determine which instrument
classes and instances are available to execute a given
payment or other operation
Provides the wallet with an interface to send and receive
messages between wallets and peer
commerce components by setting up a
connection with a remote Communication
Manager.
Manages all of the protocols that the wallet may use to
accomplish various operations, and
invokes protocols to carry out the
interaction between the digital wallet and
the vendors and banks.
Manages information about clients and
groups of clients of the wallet including their
user names, passwords, ship-to and bill-to addresses, and potentially other user profile information as
well
Presents a consolidated interface for the wallet
to the client. The Wallet Controller hides the complexity of the other components of
the wallet, and provides a high-level
interface to the client.
Builds on top of the connection abstraction to support the concept
of a session. Responsible for
encryption of data.Provides a graphical
interface to the services offered by the
Wallet Controllers interface
WALLET ARCHITECTURE
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Features of e–wallet:
Refillable
Infinite lifetime
Current balance can be stored and read
User authentication is provided
Universal access
Maximum possible cash
Cannot be duplicated
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ADVANTAGES Ease of use:
Withdraw or deposit value by telephone
Pay the exact amount, no fiddling for change
No signature required
Immediate payment
• Flexibility:
Transfer value by telephone
Pay person to person
For low or high values
Multi-currency capability
No age limit, so suitable for all the family
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ADVANTAGES… Safety and control:
Spend only what you have
Read your balance
Load value at home
Lock your card or wallet
Keep track of what you have spent and where
Customer is traceable if a lost card is found
• Accessibility and convenience:
Cash machines and telephones give more access points to funds in bank account
Available 24 hours / 365 days
Cash machines and telephones cannot run out of electronic cash
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DISADVANTAGES:
System Outages: Information for digital wallets are stored on the cloud of business servers; therefore, the risk of a system malfunction or shut down is always present. As a result, businesses will not be able to process payments or they will become increasingly slow due to high traffic in the servers.
Security: Companies must ensure that their customers' information is encrypted and well protected. One of the biggest concerns of adopting a digital wallet application is "will my information be safe"? This is the hurdle that companies must face and as a result, must develop security systems that are as safe and full proof as possible to avoid potential security issues.
Stake Holder Dynamics: Satisfying the business and strategic goals of multiple stake holders such as banks, retailers, regulatory bodies, is difficult.
Compelling user experience: A user-friendly wallet interface, easy to use and intuitive is difficult to produce.
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How it is being used right now?
There are many different companies offering E-Wallets. Although each one is a little different, they all perform the same basic tasks. Some of them are
SQUARE Wallet
GOOGLE e-wallet
PayPal
ISIS
Venmo
Dwolla
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GOOGLE e-wallet Google Wallet, currently available for purchases in the United States, lets you save all your loyalty cards in once place. You can also make payments online and at any merchant that has a card with credit attached to
it. If you need to send money to someone, you can
do so for free as long as they're using Google Wallet
as well. Google Wallet offers tap to pay for NFC-
enabled devices
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ISISIsis is available to both
AT&T and Verizon customers and offers the
same tap to pay functionality Android users currently enjoy with NFC.
The only catch? You'll need to buy an accessory case to make Isis work. After that
you can add all your payment cards, including American Express Serve
and Chase bank cards, and start tapping to pay at literally thousands of
merchants with tap to pay terminals.
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SQUARE Wallet
Square Wallet lets you link a debit or credit card to your
Square account and pay with it anywhere Square payments are
accepted. If someone sends you a Square gift card you can
also store that inside the Square Wallet app for use whenever you're at that
merchant. For some places of business, you can even choose items from inventory and have
your sale ready before even getting to the cash register.
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PAYPALPayPal is one of the most
accepted payment services on the planet. Lots of physical
merchants can also let you pay with PayPal, no actual credit
card needed. The PayPal app can use your location to determine what merchants around you let
you pay with PayPal. Once you're at the checkout, just tell them
you're paying with PayPal instead of cash or a card. You'll just have to enter your mobile
number and PIN and you're good to go. PayPal just deducts the
funds from whatever bank account or credit card you have
linked.
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REFERENCES Electronic Wallets: Past, Present and Future, by Brent Clark.
Thin is in, The future of Digital Wallets, by Christina N. White for SapientNitro.
Digital Wallet Technology, by Riyazuddin Khan
SWAPEROO, A Simple Wallet Architecture for Payments, Exchanges, Refunds, and Other Operationsby Neil Daswani, Dan Boneh, Hector Garcia-Molina, Steven Ketchpel, Andreas Paepcke from Stanford University.
http://en.wikipedia.org/wiki/Digital_wallet
Digital Wallet: Requirements and Challenges by Rajesh Krishna Balan, NarayanRamasubbu, Giri Kumar Tayi from Singapore Management University and SUNY at Albany.
24THANK YOU!!