Mobile payment architectures for India

Abstract

Mobile payments are a new and alternative payment method. Instead of using traditional methods like cash, cheque, or credit cards, a customer can use a mobile phone to transfer money or to pay for goods and services. Mobile payments have numerous advantages over traditional payment methods. Apart from their apparent flexibility, they enable consumers who do not have easy access to banking facilities to participate readily in financial transactions. Unfortunately, existing mobile payment solutions in India are not interoperable; i.e. they only offer services for merchants registered with them and do not allow the transfer of money to, or between, users of other payment providers. This limitation reduces the widespread adoption of mobile payments. In this paper, we propose new mobile payment architectures that support interoperability. A key technical aspect of the mobile payment process is to lookup customer details, for which we propose the following three design options: (1) a central database, (2) a peer-to-peer query, or (3) a hierarchical lookup. These options are evaluated using relevant metrics such as the complexity of implementation and scalability with respect to system size. Based on our evaluation we recommend that initially the peer-to-peer design is chosen, and once the technology is more widespread, the central database option should be adopted.