IEEE—ICET 2006 2nd International Conference on Emerging Technologies Peshawar, Pakistan 13-14 November 2006

1-4244-0502-5/06/$20.00©2006 IEEE 50

Payments through Mobile Phone

Quratulain Aziz Computer Engineering

Centre For Advance Studies in Engineering 19-Attaturk Avenue, G-5/1, Islamabad.

Pakistan quratulainaziz@gmail.com

Abstract: - Short message service(SMS) can prove to

be a cheap, efficient and effortless cash replacer in

today's world taking a giant leap towards wireless

era. Such billing applications involve tools like SMS

gateway and protocols like SMPP (Short message

peer-peer) to provide a flexible data communications

interface for the transfer of short message data

between external short message entities (ESME),

routing entities (RE) and message centre(MC).The

customer just has to SMS the pre-paid code and

amount and nature of payment in the pre-defined

format and is devoid of the fatigue of standing in long queues for paying bills.

Key-Words: SMS, SMS Gateway, SMPP (Short

Message Peer –Peer) protocol, ESME (External Short Message Entities), MC (Mobile Centers), RE(

Routing Entities).

1. INTRODUCTION

Imagine its the last date of bill payment and you are stuck in an unavoidable meeting, imagine standing in long queues when you could be having fun with friends and family, imagine its the last piece of your favourite crystal vase and you do not have cash in your purse. What if there is no fatigue of standing in long queues, bank timings does not matter and you don't have to keep cash or credit card in your purse? Alladin's lamp exist only in stories but your mobile phone can be equally magical. By sending an SMS your bills are paid and payment is really just a click away.

2. REAL TIME SCENARIO

Consider three players: Customers, who have to pay bill. A third party by name ClickShop which can be a bank or a company which is providing billing services. Service centres which provide the SMPP interface and SMS services so that billing transactions are done securely Through SMS VIA SMSC (Short message service centre.)First of all the third

party asks the wireless service providers or SMSC for provision of SMPP interface. After the company signs the contract with the mobile service providers for SMPP interface it develops or purchases an SMS Gateway.SMS Gateway is a unique short message service messaging tool which accepts the SMS coming from the customers mobile through SMPP interface and stores it in its database in PC.SMS Gateway facilitates complete two way messaging capabilities over GSM networks. The SMS Gateway receives the SMS from the customers and pass it on to the billing application for transaction. Click shop offers payment services through SMS to stores, restaurants, universities and organizations. After a reasonable number of stores get registered with them they advertise to customers that they can pay bills to the stores registered with them via SMS. Customers get registered with Clickshop, get a prepaid code and a format in which they have to SMS for payment. Now if the customer goes to a store registered with Clickshop and shops there. For payment he SMS to Click shop in the particular format . After a min an SMS is received to the Store as well as to the customer about successful or failed transaction.

2.1 Failure of Transaction

The transaction may fail if customer is not registered with Clickshop. Store is not registered with Clickshop. SMS format is incorrect. There is not enough credit in customer’s account.

2.2 SMS Format

A sample SMS format can be:

COMPANY CODE: USERCODE: STORE CODE: PRODUCT ID: PRODUCT QUANTITY

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2.3 SMS Gateway

SMS Gateway can have its own database. If the SMS Gateway is flexible, many applications can be built on it and it passes short messages to the relevant application.

2.4 Billing Application:

The billing application has its database where customer’s information and stores information is saved and the transactions are carried out.

3 SMPP PROTOCOL

The SMPP ( 'Short Message Peer-to-Peer' )

protocol is an open industry Layer-7 TCP/IP

protocol for exchanging SMS messages between

SMS peer entities such as short message service

centres. It is often used to allow third parties

(e.g. content suppliers like news organisations)

to submit SMS messages, often in bulk. It is a

standard messaging protocol designed to

simplify integration of data applications with

wireless mobile networks such as GSM, TDMA,

CDMA etc. The application and mobile carriers

are connected via TCP/IP. SMPP is secure and

can sustain greater message volumes

10,000/min.

4 ALTERNATE DESIGN GSM

MODEM

Another design for similar billing application is using a hardware External GSM modem which retrieves messages from customers. It is connected to the COM Port of the PC and sends the SMS to the SMS Gateway and retrieve SMS from it as well. However this design is not suitable for commercial usage with large volumes of SMS. Because SMS are retrieved and sent one SMS/sec.

5 SECURITY

As the application involves monetary transactions the SMS containing code of the customers should be encrypted. SMPP is a secure protocol still security in such an application is an area of research.

6 KEY ISSUES

a. Security

User friendly interface, because services that are too complicated and time consuming will discourage customers from going mobile.

b. Flexible infrastructure which is cap able of large, commercial volumes of SMS message traffic while maintaining quality of service.

c. International roaming agreements for cross border networks.

d. In time transactions.

7 SCOPE

a. Due to the high penetration of cellular phones over the past few years customers do not have to buy any new hardware or install any software in their mobile phone for making payments.

SMS Gateway

SMSC

SMPP

Customer Shop keeper

Billing Server

DB

DB

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b. SMS is a cheap payment method.

c. Efficient.

d. Secure

e. Cash/credit card replacer

f. No fatigue/wastage of time

g. Efficient

h. Anytime/ Any where.

8 CONCLUSION

If the security issues are resolved and the transactions are guaranteed to be secure and in time mobile payments through SMS will be the payments method of tomorrow’s word. At Fidelity e Business Ferra said, “M-Com-merce is the wave of future in financial ser-vices, we know its going to have to evolve.