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Trojan phone from Mobey pays bills wirelessly

Wave this phone at a Tube station, an ATM or a PoS terminal, and then type in a PIN - and you're doing business. Except, it's not the phone that's doing it, we discover at the Mobile Commerce World Europe 2002 show this week ...

"It's all about creating appropriate consumer habits," explained the pioneers of the Mobey Forum, who will be demonstrating their new "preferred payment architecture" at the Excel centre tomorrow.

What have they got? It looks like a mobile phone which triggers automatic payments. You hold it within 3-5 cm of a detector pad, and the machine goes "beep!" and asks you to enter a PIN. If the machine is a hole-in-the-wall ATM, then you get money out of it. The other demo they'll be showing, is of a point-of-sale terminal, where you buy something and it takes money out of your credit card.

How does the phone do it? Easy: it doesn't.

What you need to do this is a "contactless" smart-card chip. It works exactly the same as the smart-cards you will find in many credit and debit cards already, where there are wires on the card leading in to a bit of silicon embedded under the plastic - except you don't need the wires. Instead, a loop induces current in your card, and it radiates the information back to the terminal.

When you use it in the phone, it's a phoney. The phone has a replaceable cover; you replace the standard one with one that has a smart-card embedded in this lid. And why would you want to do that?

"Eventually, this will be part of the phone. In the year 2005, all smart-cards in all teller machines will be based on the Europay/Visa/Mastercard EVM standard, using contactless technology," predicted Lisa Kanniainen, Mobey evangelist. "When that happens, you will enter the PIN on the phone keypad. But people aren't used to doing that, so we're trying to create appropriate consumer habits," she said.

The Mobey Forum trial" shows how consumers can conduct banking transactions (e.g. check account balances, make transfers and payments as well as trade securities) or purchase goods and services, conveniently and securely via a mobile phone," says the official announcement.

It adds that you can do this "regardless of your physical location or time," which isn't true yet; that's the next stage. "Remote payments - internet payments - at the moment is a technology unknown to the wider public, and is an area where we look forward to creating a user habit - starting off with local payments and ATM withdrawals, and getting people used to thinking of mobile devices as local payment devices, and then gradually getting into the idea of using them as remote payment devices."

The technology is radio frequency identification (RFID) standard. The extra chip which uses RFID is the Wireless Identity Module, WIM - a very simple device indeed, requiring no encryption, no smart protocols other than the identity exchange. It's up to application designers to handle encryption and identity protection, and the RFID chip is quite capable of handling that.

Trials of contactless RFID based cards are under way at London Underground, and in Hong Kong transportation system (both underground railways) where the issue being tested is, apparently, the speed of processing possible.

Mobey Forum is announcing a mobile trial too; in which Mobey Forum banks test the viability of the dual chip mobile phone based remote payment and banking services. The trial is based on Mobey Forum's Preferred Payment Architecture, which is supported by a large number of leading financial services organisations, mobile handset manufacturers and other technology vendors. For the Mobey Forum trial, Nokia has provided prototype dual chip handsets and SchlumbergerSema its Palmera java cards to accommodate the WIM application.

Bo Harald, Chairman of the Mobey Forum comments: "The finalisation of the Local Preferred Payment Architecture represents another important step towards a complete dual chip service portfolio. The ability to make payments in physical locations broadens the range of services that can be made available to consumers and will encourage the use of mobile phones for transactions. Mobey Forum views this as an important step in the growth and success of mobile commerce."

The banks have already made the decision: EMV is coming into place; and the banks are busy implementing that at the moment. "It's being mandated for 2005. What is the migration path, to get there? A lot of the EMV technologies are very far away; we're proposing a method by which to get to there," said Kanniainen. "We've looked at the EMV experience in four years' and tried to back-track to replicate that."