Mass market mobile payments

Mass market mobile payments

Liisa Kanniainen
Liisa Kanniainen

A whitepaper recently published by the Mobey Forum aims to promote increased collaboration and understanding between the mobile and payment industries, by clarifying the role that secure elements (SEs) play in securing mobile payments. Liisa Kanniainen, executive director of the Mobey Forum, explains.

Secure elements (SEs) are everywhere. If you think about the devices you use to make payments, SEs are tucked inside, protecting you and your payment information from being stolen.

From your credit card and its chip and pin, to your mobile phone, which is fast moving towards becoming a device for micro payments at the newsagent, SE’s are embedded inside the chips on those payment devices to stop other people running off with your private information.

Reducing complexities

The Mobey Forum whitepaper is all about reducing the perceived complexities of the mobile financial services ecosystem, which currently act as a key barrier to the mass market adoption of secure mobile payments. The mobile industry and the payments industry are currently staring each other out over a chasm of suspicion and mistrust, particularly from the payment side. Yet the Mobey Forum whitepaper seeks to show that using the right SE inside a mobile device can make it a safe option for payment.

These complexities mostly originate from the lack of defined roles and responsibilities for the people within the ecosystem, including mobile network operators, handset manufacturers, merchants, service providers and financial institutions.

By educating mobile and financial audiences on how the SE can be harnessed to deliver creative new commercial opportunities through a variety of business models, and by defining the roles and responsibilities for all in the food chain who are relevant to the SE, the Mobey Forum sets out a very clear foundation, upon which mobile and financial industry participants can work together to successfully converge market sectors and make mass market mobile financial services a reality.


Who’s who

The four main SE related stakeholders in the mobile financial services ecosystem are identified as follows: The SE vendor – responsible for manufacturing the SE; the SE Issuer – controls the SE’s root keys, brands it and issues it to the end consumer; the application issuer – offers an application via the SE to the end consumer, such as a bank or transport authority; the trusted service manager – a trusted third party used by SE or application issuers throughout the SE or application lifecycles to manage distribution, update and trouble-shoot.

Meaningful collaborations between the mobile and financial services sectors can only take shape when roles and responsibilities of all stakeholders within a mobile financial services ecosystem are clearly understood and defined. It is therefore essential that stakeholders from both the mobile industry and financial services sector know which one or more of these four roles they are striving to fulfill within the value chain, in order that they can identify suitable business partners and create business models that are relevant to their specific commercial purposes. 

Value chain stakeholders also need to consider which type of SE technology is best aligned to suit their specific business objectives and existing technical infrastructure. Currently, there are five potential SE types suitable for use in mobile financial services: stickers, secure micro SD cards, UICC, embedded SE and trusted mobile base. The conclusion is clear; different SE technology options deliver distinct advantages to different participants in the value chain.


What’s what

Stickers are mostly used when a quick, no frills approach to mobile financial services is sought. Secure micro SD cards allow mobile network operators, other mobile distribution channels, financial institutions and other service entities to extend their services into the mobile domain beyond established distribution channels. UICCs are in the mobile network operator’s domain, which can be leveraged to open an additional service path for financial institutions and other service entities to promote mobile financial services to end users. Embedded SEs can be used by handset vendors to form collaborative business models with other value chain stakeholders. And the trusted mobile base, as a technology at the root of mobile devices, could enable chip and handset vendors to unleash the full service potential of the entire value chain across different SEs.

The question is not if mobile payments will get off the ground and reach the mass market; the uncertainty is directly connected to when this will actually happen. The Mobey Forum white paper highlights that education and clarity surrounding the role of the SE is a vital step towards this end goal and is itself an educational tool designed to facilitate understanding.

By continuing to foster cross industry collaboration between the mobile and financial sectors, and providing independent and accessible information intended to educate the marketplace on convergence opportunities, the Mobey Forum is working towards the development of a secure, interoperable and scalable ecosystem that is flexible to future market requirements.

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