Near Field Communication based Mobile Payment System

In daily life, ordinary cash is more and more replaced by electronic means of payment. Where on the one hand side macro payment systems are well covered by credit cards, micro payment systems still suffer from different technological and usability issues. Besides usability, security in payment systems has always been a hot topic ever since. In this paper we present a new, promising approach for a purse-based micro payment system. Our system relies on a prepaid wallet having the money stored in a secure chip in the mobile phone. The proximity technology Near Field Communication (NFC) is used to conduct contactless payment transactions at the point of sale (POS). Additionally the wallet can be topped up over the air (OTA), anywhere and anytime. The combination of OTA top-up and NFC payment transactions make this system very convenient as the data acquired during an eight month trial shows. Users benefit from the system as they do need to head for an ATM to load money into the wallet. This system is also advantageous for banks and payment providers as there is no need to issue smartcards. Besides the technological aspects of NFC and the implementation of the payment system, this paper also presents the results of an eight month trial with 75 participants.