Personal e-commerce terminals

Online shopping is easy with a credit card. But e-commerce remains off bounds for people without these cards and scares those concerned about online transaction security. A handy solution is micro-payments over a mobile phone.

Micro-payments are ideal for purchasing low-cost items on the Web. They can also be used to pay anonymously for digital content and services, through mobile-phone users’ prepaid accounts. “In Europe, around a third of mobile-phone users choose such accounts,” says Itamar Galon, of Partner Communications Company in Israel.

Galon coordinates the IST project MEEST, involving a consortium of four partners. The focus is on making mobile e-commerce (m-commerce) easier, safer and more profitable for everyone. The project has developed an end-to-end solution known as m-Token. It embeds technologies, such as reliable authentication, in the mobile phone’s SIM (Subscriber Identity Module) card interconnections. If these technologies are also taken up by merchants, financial institutions and mobile operators, m-commerce transactions will become fast and secure.

M-Token requires no prior relations between the user and the e-merchant, nor any kind of pre-registration. If some information or a product/service catches your eye on the Web, you punch in your mobile phone’s number on the relevant page. The number then arrives at the phone operator’s main server, which recognises you and checks that your account balance will cover the purchase cost. It also verifies you are allowed to make the purchase, so that youngsters for example cannot access unsuitable content or products. If everything is fine, your mobile receives a code sent by SMS. Type this code into a window on the site and the mobile operator will pay the sum. All data is secured throughout the transaction and encrypted/decrypted from start to finish.

The system could also be used to pay for goods at traditional shops, using adapted point-of-sale equipment. Users can also top-up a virtual Goods, Services and Content Account belonging to themselves or others, such as employees or family members.

“Our project has proved the innovative concept of micro-payments with a mobile phone,” says Galon. “We are now finishing the technical integration of the system’s components and will soon test it with our partners’ employees.”

Teenagers without credit and debit cards are a prime audience for this micro-payment system. Other targets include those who only access Internet content occasionally, dating services being a good example, and users who opt for anonymity while accessing services.

“Our system can be used anytime and anywhere,” says Galon. “It will delight mobile operators and content providers, because it increases the number and frequency of downloads of MP3 music files, streaming videos and movies.” He predicts a great future for micro-payments and m-commerce, especially as content providers expand their offerings for always-on phones. The MEEST system is based on second-generation GSM/GPRS phones, but can easily be upgraded to the new third-generation technology.

Two partners in the project, Orange and Cellpay, hope to commercialise the m-Token application to service providers. The project will be demonstrating its results in London, UK, at Mobile Commerce World 2004, from 21-22 September.

Contact:
Itamar Galon
Project Manager
Marketing Division
Partner Communications Company Ltd
11 Ha’Amal st.
IL-48092 Rosh-Ha’Ayin
Israel
Mobile: +972 54 814874
Tel: +972-67-814874
Fax: +972-67-814211
Email: itamar.galon@orange.co.il

Source: Based on information from Meest and Mobile Commerce World 2004.