Mobile payment, some fraud thoughts!

Like10 to15 years ago people used public coin phone booths to do their important calls on the go, on a daily bases it was familiar to see waiting line in front of the cabinet waiting for their turn.

Mobile payment, internal fraud

Coin phones,
Even though calls was clearly cheap, it was common to see some metal circles simulates the coin –Coin fraud– weight and size, in order to cheat the cabinet and establish a free phone call, and guess what? This fake coins was returned to other customers as change after finishing a call. You may also recall that coins connected to a wire where the user can pull it back after finishing his call.

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How to build the worst payment system in 10 steps! [Part2]

How to build the worst payment system in 10 steps!Building a reliable and robust mobile payment system is always a challenge,it requires good analysis from business, marketing and technical teams together to deliver a simple, secure and convenient system to the end users. On the other side there are some trivial mistakes some people do, and this quick guide list some hints to help you to avoid making such mistakes unless your target is to build a system to fail!

This article is Part2 and you are advised to check Part1 to get a clear idea on how the article is listed.

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How to build the worst payment system in 10 steps!

During my journey with mobile payments and payment gateways, I was lucky to see and evaluate multiple payment solutions and systems.I have seen a lot of amazing and well designed systems and was also lucky to see some other systems that scored very law on my evaluation charts. And guess that most of them disappeared now and failed as expected!
Worst mobile payment systemWithin this series I will list the most critical points I used in my evaluation as guide line for any one wants to build a system to fail, and it worth mentioning that you can use the below tips on your own risk with no liability on the author![Hint] I will add some comments after each tip for explanation.

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Mobile Payment, Apple pay Et tu, Brute?

Few days ago the giant smart phone manufacturer Apple announced its new payment product ‘Apple pay’ and finally iPhone will come with NFC port in a step that all the world identified as very late step from Apple side!

Apply pay

Apart form the new introduced techniques, the added security value and the new payment experience, the announced product did not add any new value or proposition to the mobile payment industry.


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Mobile payment, the dark side of the moon!

In our recent post Saving the titanic we went through possible benefits of mobile payment and its capabilities and tracking options of this new revolutionary services. It was not possible to go through such capabilities without touching the most critical term Privacy!

Mobile payment, privacyCurrently digitizing consumer life is always suspected and accused, with multiple cases and news about privacy hacking and the endless arguments if this is ethical or not, legal or not, you might refer to the recent announced news about Google via this link for a story about an internet user arrested due to illegal email contents.


Back to mobile payment, in a typical crime investigation you might be suspected and you will discover that the mini store you stopped by to buy a coke can was actually a hidden drug dealer.

Such obsesses will be doubled and might be a real showstopper for some set of customers, and it will increase wherever political or terrorism issues exists. In some cases shopping anonymously is a real need and its absence might block possible sales targets. You may now realize how Bitcoin and similar digital currencies found their way in.

To overcome this financial institutions, banks, MNO or even vendors must ensure that they are legally authorized and entitled for such financial services, and a preset agreement with regulators and government not to disclose customer information without certain approvals.

On the other side the service provider must state clearly in their contract under what circumstances they will release the customer data, another factor is the information sharing with 3rd parties. It sounds interesting to see an offer on a new mobile device dedicated for me as I was paying for the repair shop last week. But it also means I’m hacked and I’m fully monitored on the go!

This is not simple as social media sites situation, in social media I’m submitting my data and risk my privacy on my own and I’m still able to control what to be shared, but for payment I have no alternatives to pay for the coffee or maintenance.

Vendors must pay attention to this up rising risk, and it will not make sense to hand such controls over to the customer to decide when he will use his mobile wallet and when to go with cash as it will work against the mobile payment concept!

Very complicated indeed, and going through alternatives needs a separate article to carry on!

Khaled Sayed

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Mobile Payment, and here comes loyalty!

Through our previous article Cash-In the passion fruit we explored how Cash-in can be a pain to any new mobile payment installation, and in the previous Saving the titanic article we explored some potential benefits for mobile payment.

Mobile payment loyaltyWe will carry on here to explore hidden benefits and values in mobile payment, and why we should consider mobile payment as on of the most innovative or revolutionary product.

Mobile payment is a new way to redefine our daily relations and operations, adding new unlimited features and helping the economy rising in emerging and poor countries.


Merchant boundaries,

If you are a certain product or store chain fanatic, most likely you are subscribed to your addicting product loyalty program either through mobile application or a plastic card. In developed countries users might join unlimited loyalty programs and during their daily trades they keep collecting points from different merchants and redeem it with simple gifts or discounts from time to time.

In emerging markets, with the absence of such mega stores or chains customers that does not have the same motivation to spend money, such deals or offers can’t be sponsored with those local dealers and micro merchants.

Value limits,

Another factor would be the transaction value, its a fact that mobile payment is designed for mini scale transactions, and tracking those micro payments will be a headache specially that a lucky customer should perform thousands of transaction to reach the minimum announced loyalty limit.

Due to the above limits both customers and merchant usually lose passion for loyalty programs and it does not help retaining a loyal customer or even help merchants to increase their sales, moreover it does not allow manufactures to run regular offers as usual.

Mobile payment and loyalty collection,

Thinking out of the box to overcome this situation mobile payment can help introducing a new loyalty concept, rather than being rewarded from a certain manufacture after achieving a preset purchase target. Loyalty programs may be combined under a group of merchant alliance offering customers rewards on the accumulated purchases target.

With your limited value purchases customers may collect points on their total bill value regardless the product or the store they are shopping in! Imagine collecting points for paying your monthly bills, buying food, coffee, pencils … etc. And being rewarded with unlimited rewards category from the program sponsors.

Rather than being focused on a certain brand mobile payment with its tracking capabilities will allow merchants and stores to run a new vertical loyalty concept, helping customers to stay engaged and increasing the traffic for merchants.

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Mobile Payment, Saving the Titanic!

Over long decades, billions of financial transactions took place every day varying from purchasing food, coffee, clothes, tools, digital products and up to online purchase.

Mobile payment benefitsThose types of financial trades are not recently invented. No, actually it has started since those early days where people were trading goods with goods in a process called bartering, and as the society were developing, people touches the need to facilitate this process and find a way to store their wealth in a shape that does not rust, rotten or vanish, and it started with gold!


Since this time the financial trades and purchases passed through multiple changes and you may call it enhancements from gold and coins to paper currency and banknotes. Banks were established to provide a financial cover, and soon the world was heading to the electronic and plastic cards where the financial institutions had been pushing the society to convert to a cash less society! And due to implemented infrastructure, Banks were not sufficient to cover all the needs especially in emerging markets –as we previously discussed here– that’s where mobile payment was born.

On a dynamic and connected world like ours, financial trades are passing from country to country creating new market opportunities for those type of legal trades and resulting a pain for trades linked to criminal or illegal activities. And the ongoing effort to push for mobile payment is not just looking for stylish or elegant payment model,it’s more into control the daily money flow to save our titanic before it sinks!

What we are about to explore today is some of mobile payments benefits showing the –good side- of mobile payments.

Mobile payment to a theft crime- less society,

Whenever a theft crime happens the thieve tries to clear his footprints and not to be traced, that’s why the money laundering overseas happens and it will need different and more complicated techniques to trace it,but in smaller amounts after a theft crime,the thieve will spend the money buying small items and cash tracing is almost impossible.

In a Cash-free society, even stealing the victim mobile with its stored wallet still will be traced and on the first purchase request he will be surrounded by cops on spot. A live example for this theory is the decreased number of stolen iPhone devices after Apple Kill Switch implementation,it was simply decreased because thieves were sure that they will be always traced.

Mobile Payment to a drug-free society,

Whenever a drug store is reported and the cops catches the dealer it takes time and effort to trace his network and connections and it might not work all the time, but again in a Cash-free society when a dealer is caught, just you imagine that a simple transaction report will show the whole network starting from customers,other dealers and even their customers too.

Mobile payment save lives,

In emerging markets multiple crimes happens every day in an endless wrestling and race for food and security. It is simple to murder a poor guy for just a suspicion that he might be holding some cash. This crime risk increases in rural areas where citizens needs to do long trips to pay some fees or monthly installments – like what happens here.

Whenever mobile payment solutions were deployed,peoples were able to get rid of those risky trips and with a simple key press they were able to transfer those amounts avoiding the risk for a may be last trip!

And many more,

With a mobile wallet implementation,it’s easier and faster to transfer money in emergency cases to a relative or even a strangers whenever bank networks is not available, and helps in collecting donations or other charity activities.

It will also support in fighting the money laundering process where the specialized anti-laundering solutions and controls will take care of the big money chunks, mobile payment will carry on detecting whatever small amounts were missed or escaped!

Capitalizing on the same base,you may now notice that mobile payment is not just a fancy or fashion solution, but definitely it’s more into a real need to help both people and governments to overcome multiple issues and it could help in lowering the crime rate in a typical country.

Still there is a dark side and the cup is not totally full, we might need another article to carry on with the mobile payment devil side!

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Mobile Payment; NFC, Why? and Why not?! [2 of 2]

In the previous article we went through the NFC and the need behind this technology, we have reached a conclusion that the data transmission technology is one of the major challenges vendors and wallet issuers are trying to surpass to allow Mobile payments to boom and start taking some of the payment cards share.

Mobile payment NFCNFC is one of the possible solutions that might help, but still there are some challenges delays the new technology expansion.

We will try to list the major challenges NFC is fighting against in the blue few bullets to be as an indicator for your weather to launch or postpone your upcoming NFC products.

Feature mobiles,

It’s a fact that NFC is made only for elected segment of smart phones, not even a generic technology for all manufactured phones, and it’s a fact that the famous Nokia 3310 will never support this advanced technology!

Still it needs more time and pressure on handset vendors to adopt NFC antenna by default, and you have to understand that your solution will only work with limited number of devices. The more time you can wait the more customers you may gain, otherwise it will end up with an annoying sign (Samsung Galaxy 3, 4 and 5 only supported!).

And even smart phones,

From each smart phone brand still only a series or two comes with NFC support, and again some famous brands like iPhone has not implemented this technology yet – that iPhone 6 might support NFC- and again you still have limited coverage and penetration issue.

The wallet solution,

Each mobile wallet system has its own processes, interfaces and APIs. While account number is mandatory for a certain wallet system to process a new payment order, it might be unnecessary or even not considered at all in another solution from a different vendor. It means that a mobile APP for solution A will not transmit the same information submitted from another mobile APP developed for solution B.

Back to the POS,

With respect to the previous point you may think how a single POS may support multiple wallet vendors, and you have to consider that mobile payment must be a cross-border service, where you should not limit your design to only the local vendors in your country, you still need to consider other international wallet roamers that will appear on your system from time to time trying to submit payment orders using your platform.


In a final conclusion, NFC is a channel of communication with a proven security and maturity specifications. But still it needs more support and push from vendors and mobile manufacturers to boom.

Worth mentioning that NFC as a contact-less payment features is not limited or restricted to mobile operators or mobile wallet vendors. The exiting card players are also investing in this track trying to upgrade their payment systems to be more interactive and enrich it with extra digital and fancy options.

Is NFC the real future or a dead technology? As you may noticed its very hard to answer this question with a sharp and clear answer. We still need to wait and see what the future is holding for this long debate and I’m sure we will be surprised at the end!

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Mobile Payment; NFC, Why? and Why not?! [1 of 2]

NFC is one of the hottest topics in payment, you will notice this hot topic wherever there is a discussion related to mobile payment and you will many arguments about NFC as the future while others confirms that NFC is a dead technology.

Mobile payment NFCIn this article we will go through NFC and its related challenges, at the end of this article the same question will remain unanswered, Is NFC coming or passing away? There is no final answer and the debates will carry on.

What is NFC?

Apart from the technical definition you may check here, I will try to simplify it with a direct need example so you will have an idea about the NFC benefits and why there is a lot of debates around it.

In my own pocket wallet I have many cards Credit Card, Debit Card, Medical care Card, Kids zone Card and Club access Card. All cards has the same width, height, thickness and the most important is the magnetic strip bar. This magnetic bar exists with the same measures and the same exact location regardless the card manufacturer or purpose, which make it easy to a typical POS machine to read it and transfer the stored information which might differ from a card to another (Account number, Balance, Last access, Name … etc.).

It is just a matter of which information the manufacturer previously saved, and the POS software is developed to read to transfer it to the back end system for final processing and handling, before displaying the friendly message ‘Transaction Completed’.

Why NFC?

Now let’s try to relate the above traditional card payment process to the mobile payment industry, how do you imagine the mobile payment POS? Should it fit the iPhone size? iPhone 3, 4, 5 or 6.

How about Samsung devices? How it could fit Galaxy or Note devices at the same time? Should we think about other Samsung brands like Mega, Ace and Y … and how may we ensure it will fit HTC, Black berry or Nokia devices?!


Ok let’s forget about designing a POS based on shape or size and think about other technology like Bluetooth as example. Bluetooth is a good option but there are some draw backs too.

  • iPhone does not support all Bluetooth functionality like android or Nokia
  • On other side Bluetooth has a wide coverage range and could be spammed, you must passed through this horrible experience with an unknown device trying to send you files forcing you to set your Bluetooth off
  • It takes a time to setup
  • And some more … [Click here for extra information]

The need,

There is real need to find a way to transfer the payment data from mobile to the merchant awaiting device. Vendors and payment processors are trying to look for a standard way to transfer the payment data from the mobile device to the POS machine.

The need behind this is to support the retails and stores daily payments without the need to use multiple POS machines and with a unified payment experience. A typical user must follow the same steps regardless his mobile type or wallet issuer.

In Part2 we will explore the NFC opportunities and challenges so please stay tuned!

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Mobile Payment, “Cash-Out” ; the poisoned apple!!

In a traditional mobile payment implementation, Cash-Out is an expensive service where the service provider charges extra fees to perform a Cash-Out request.

Mobile payment Cash outIts a fact that you may have a big revenue churn generated only from Cash-Out service, and you still have an edge compared to other traditional and old fashion money transfer services. But sooner you will discover that you were another victim for this poisoned apple!

However you will have an edge from the fees side compared to other alternatives, but you will not have no chances to compete against other competitors from the same industry.

And when the prices war starts, you will notice that you don’t have any loyal customers. Customers will join multiple wallet services in their region and will simply transfer through the lowest rate offered and they will be your promotion period users-no more!

To avoid this critical situation you will need to activate your Anti-Cash-Out filter even before you launch your service commercially. Your day to day activity should include a detailed analysis for the Cash-Out transactions to understand the customer behavior and needs more. In order to detect the weakness points, which needs to be tackled to lower Cash-Out count to the minimum possible number. Zero should be your ultimate target!

Why Cash-Out should be considered as a poisoned apple?

Imagine Adam who Cashed-In 100$ and transfer it to his wife Diana, your system now collected 1$ as transfer fees and Diana’s wallet is now loaded with 99$. Diana went to the nearest agent and Cashed-Out 97$ after deducting 2$ fees, leaves you with 3$ profit.

This should be great, but you should consider that Diana was in need to purchase some books from the library, the librarian collected the money and went to the nearest restaurant for lunch, the restaurant guy went to the barber shop to get a hair cut, the barber visited the grocery to buy his weekly needs and so and so …

Lost opportunities:

You should be wondering now how much potential revenues you missed once you were focusing on the Cash-Out as your main revenue stream. It might be only 50 cents -0.5$- fees applied on purchase service but you should consider that there are unlimited purchase transactions around you and each new transaction will drop a penny in your pocket which means more and more profit.

Focus on your goals,

Cash-Out ends your system relation to the Cashed-Out amount and prohibits your from generating any extra revenue. It’s very risky ,, as Cash-Out service is a onetime terminal transaction, while purchases and financial trading will always be unlimited. A single Dollar might be traded million of times and the expected revenue will surpass the Cash-Out fees value regardless how large it was.


  • Cash-Out is a poisoned apple and you should hear the audience shouting Don’t eat .. Don’t eat!
  • To limit the Cash-Out you must avail a robust and rich eco-system to support your customer needs and help them spending for their daily needs using your wallet service directly
  • Always balance between the services availed in your service and the Cash-Out fees
  • It not just a matter of count; services must touch real needs for your customers and should be a result of extensive market research and customer surveys
  • Fast, secure and easy should be considered in each new service implementation
  • Balance between day to day services and new fancy and innovative ideas, and make sure to develop in two parallel tracks

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