Mobile payment is a new useful technology used in banks and financial Institutes. Nowadays, just about everyone has a smart phone with enormous capabilities, while banks can use this potential to their advantage.

Financial entities can serve clients through their mobile applications, and one of these applications is called payment. Payment is a big field for transferring money. Many clients use the old-fashioned plastic and magnetic stripe card. Some of banks and companies use modern wireless card recently with NFC technology, but the problem is that the customer has to have his card with him at all times. The new innovative solution has solved the issue through mobile payment.
In other words, the customer stores his card data in his smart phone, and then uses his phone instead of plastic or wireless card. In this situation, the customer’s phone should have NFC antenna to connect, Secure Element to store keys and special application to simulate card and perform payment.
First of all, mobile payment is more secure, because the customer does not enter his password in front of others in POS device. Additionally, it is easier to find your phone than to trace back your cards. In case you cannot find your phone, you can block your cards immediately. Secondly, carrying one phone is easier than carrying several bank cards. It is enough to have your phone to purchase anything since you need it for many other purposes too. Finally, this is more manageable, because you can have all of your purchase receipts in your phone to review later on. You can see what you bought, how much it was, where and when it was.
There are many projects that use smart phone for payment. One of the most popular one is Softcard that AT&T, T-Mobile and Verizon have implemented it in the United States. After that Google began its project named Google Wallet, and then integrated it with Softcard with a new name, Android Pay. In addition, Apple introduces its payment solution with iPhone 6 called Apple Pay and became a big player in this field. Also, Samsung developed its project, Samsung Pay. Some banks start their independent solution in Spain, Russia and Sweden. Specially, Sweden has a big project for replacing physical money completely, named Swish.
The best mobile payment solution for Iran is an independent one based on banks only. Solutions that require cooperation of smart phone manufacturer such as Apple and Samsung are not suitable for Iran, because it will need their privilege and devices. For example, every customer has to buy new iPhone or Galaxy phone, or every bank needs to contract with Apple and Samsung. On the other hand, because of less of Secure Element (SE Module) in many of current smart phones, banks have to use hybrid solution with cloud that called Tokenization.
Tokenization is a token-based (ticket-based) solution that in every payment transaction, one small cryptogram should be generated in server side and used in customer side. This process requires a reliable and high-speed Internet on mobile phone, so we have not these conditions in many areas of Iran. Instead, we can use USSD as a reliable channel, because we have high quality support of mobile network in many areas. This solution has many benefits for our country and it’s quite practical.

Hossein Rezaei Ghaleh is the Research and Development Manager at PKI Company.