Challenges and Risks of Developing a Payment Facilitator Model
Following traditional payment methods using banknotes, credit and debit cards enabled significant increases in consumer spending power. The traditional way for consumer to purchase a service or an item in a shop is by presenting their –physical- credit card on a point of sale (POS) device, which is called as Card Present (CP) transaction. Motivated by the growth of Internet and Smartphones, e-commerce became a reasonable alternative for timesaving purchasing activities. Significant growth in the e-commerce market has been observed through the world especially in the recent years. Remote transactions where the customer does not physically present her credit or debit card during payment are termed Card Not Present (CNP) transactions. CNP includes mail order, telephone and internet transactions. The main advantage of CNP transaction is easing the customer’s shopping experience, since the customer can buy anytime and anywhere without the need to physically present the payment card. In order to maximize the efficiency of CNP transactions, a payment facilitator is needed to sponsor retailers. It frees retailers from the need to perform the administrative procedures necessary with the acquirer. The aim of this research study is to identify the challenges and risks to developing a secure methodology to provide secure CNP-based transactions with a payment facilitator. We analyze and use the requirements imposed by regulators, identify detailed security requirements for a mobile payment system, and develop a roadmap for developing a secure methodology for mobile payment transactions.
Index Terms— Payment Systems, Mobile Payment, Payment Facilitators, CP, CNP, Fraud, Security, e-commerce, m-commerce, NFC.