MITP 413: Wireless Networking

MITP 413: Wireless Networking M-CommerceXeon GroupRohit BhatRyan HannanAlan MuiIrfan Siddiqui

M-Commerce Overview What is M-Commerce? (Alan) Available M-Commerce Services (Irfan) Security Issues (Rohit) The Future of M-Commerce (Ryan)

M-Commerce What is M-Commerce? Available M-Commerce Services Security Issues The Future of M-Commerce

What is M-Commerce?“Definition” Definition of m-commerce continues to evolve as more and more services are discovered for consumers on the go. As simple as: "E-Commerce over mobile devices.“ Or a little more complicated: "The core of mobile e-commerce is the use of a terminal (telephone, PDA, PC device, or custom terminal) and public mobile network (necessary but not sufficient) to access information and conduct transactions that result in the transfer of value in exchange for information, services or goods."

What is M-Commerce?“Definition” • For the tone of this paper, we selected MobileInfo.com’s definition of m-commerce: • “Any electronic transaction or information interaction conducted using a mobile device and mobile networks (wireless or switched public network) that leads to transfer of real or perceived value in exchange for information, services or goods."

Technology E-Commerce M-Commerce Device PC Smartphones, PDAs Operating System Windows, Unix, Linux Symbian (EPOC), PalmOS, Pocket PC Presentation Standards HTML HTML, WML, HDML, i-Mode Browser Internet Explorer Phone.com UP Browser, Nokia browser, MS Mobile Explorer Bearer Networks TCP/IP GSM, GSM/GPRS, TDMA, CDMA, CDPD What is M-Commerce?“Untying M-Commerce from E-Commerce” • M-commerce is not necessarily e-commerce gone mobile • In reality, all of today’s established e-commerce channels ported over to wireless networks, where feasible, would be a tiny part of the total scope of m-commerce opportunities.

What is M-Commerce?“Localization & Personalization” • The most significant characteristic of m-commerce is combining the user’s location in time with established demographic and personal preferences information. • Localization • Customized sale offer at a local boutique transmitted to your smart phone for charge approval, followed by payment mechanisms eliminating the need to enter credit card information for each transaction. • Personalization • Gender of the mobile phone subscriber with possible additional household facts, such as household size, upcoming birthdays, income to debt ratio, collected and verified through various means.

What is M-Commerce?“History” • Late 90s dot-com boom • The prospect of mobile commerce applications generated hundreds of billions of dollars in licensing fees paid by European telecommunications companies for UMTS and other 3G licenses in 2000 and 2001 • WAP-enabled multi-purpose smart phones • Handset manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled multi-purpose smart phones • North America lags in M-Commerce • The recent alliance between Sprint Nextel and Clearwire for WiMAX networks being built for completion in 2008 will accelerate the more data-intensive 4G networks that will provide a turning point in m-commerce in North America.

What is M-Commerce?“Key Driving Factors” • Price sensitivity • Early adopters in 13-25 age group • Exponential growth in mobile telephony • Unprecedented consumer interest and adoption of the Internet and e-commerce • Everyday life integration • Compactness for convenience • Personalized functions • “Always-on” connectivity • Real-time data transfer over 3G networks • New revenue opportunities • Attracting players from technology, finance, retail, and media economic sectors; all anticipating that m-commerce will increase customer acquisition and retention and generate new revenue opportunities.

What is M-Commerce?“Products, Services & Applications” • The criteria for m-commerce services or products: • Limited in number, plausible choices • Explicit offers requiring very limited evaluation to invite an immediate response • Highly convenient transaction completion process • Examples: • The New York Times bestseller list meets all three criteria. It would be easy to purchase any of the listed books via a wireless device • Tickets to popular entertainment events, such as concerts, live theatre, movies, sports events, trade shows, public forums • Micro-transactions, such as purchasing soda pop from a vending machine • Payment of utility bills, restaurant bill, ATM banking

Available M-Commerce Services • Financial Services • Information Services • Entertainment Services • Marketing & Advertising Services

Available M-Commerce Services “Financial Services” • Mobile Banking • Developing countries • Social and economic development. For users – an opportunity to become engaged in the formal banking sector. • Micro-finance institutions now have ability to advance funds into remote areas and have regular repayments • Cash-to-mobile / Mobile-to-cash • Global network of Western Union Agents • Mobile service operators • Significant increase in text messaging revenues and a large drop in customer churn • Cash card issuing banks • Increase in customer reach and the added cash float • Service industries and utilities • Ability to get payments electronically from a significant portion of the overall population

Available M-Commerce Services “Financial Services” • Mobile Brokerage • Subscribers react to market developments in a timely fashion and irrespective of physical location • Parking Fees • ATM-style parking meters that accept cash, debit, and credit cards, and can also use SMS to send a message to your cell phone when your time is about to expire. You can then purchase additional time simply by replying to the message • Mobile Purchase • ShopText allows consumers to purchase products from their cell phones using text messaging • mShopper & mPoria • Mobile consumers are presented with sales items for an immediate response

Available M-Commerce Services “Information Services” • Location Based Services • Personalized rush-hour commute route traffic congestion report and live traffic conditions based commute route alternatives • Public multicast of local rush-hour traffic reports and detailed commute alternatives to areas most affected • Time-sensitive mobile advertising “Specials” offered by nearby businesses while the user is roaming the Mall • Consented people tracking and monitoring • User Requested Services • User selected or observed by the mobile device • Customized traffic information based on the subscriber’s travel patterns. • A wide variety of information services delivered to mobile phone users in much the same way as it is delivered to PCs.

Available M-Commerce Services “Entertainment Services” • Mobile Ticketing • The bCODE is an SMS message that can be read electronically from the screen of a mobile device. • NFC is a standard being developed to allow mobile phones to be identified wirelessly by a scanning device. NFC uses an RFID chip that is fitted to the mobile phone during manufacture. • Content Purchase & Delivery • Convergence of technologies • Mobile multimedia devices have resulted in an increase in the purchase and delivery of full-length music tracks and video • 4G levels will make it possible to buy a movie on a mobile device in a couple of seconds, while on the go • Customers can order and pay through there mobile phones and be informed when the items are ready for pickup.

Available M-Commerce Services “Marketing & Advertising Services” • Mobile Marketing • Over 100 million advertising SMS sent out every month in Europe alone • Mobile marketing can also contain a timed slideshow of images, text, audio and video via MMS (Multimedia Message Service) • Mobile Vouchers, Coupons and Loyalty Cards • Presenting a mobile phone with virtual tokens at the point of sale allows the customer to receive the same benefits as another customer with physical loyalty card, coupon, or voucher • Mobile delivery enables economy of scale, effective target marketing, and privacy-friendly data mining on consumer behavior

Security Issues • Basics • Wireless, by definition, means RF and the absence of physical security safeguards • Wireless cryptography, a critical element for wireless, is sometimes lacking, bad or inadequate. • Many technologies are new and therefore new vulnerabilities should be expected. • Wireless topologies and complexities will increase. • Currently there is limited awareness of security risks.

Security Issues • What must transactional security do? • Provide end-to-end secure and reliable transaction • Verify the identity of the user • Allow payments • Validate that transactions have been completed • Encrypt data over wireless channel

Security Issues • Current Security Standards • Network Layer • WAP (Wireless Application Protocol) • The current domain standard for mobile Internet access is the Wireless Application Protocol (WAP). This allows mobile devices that are WAP-enabled to access the Internet using the Wireless Mobile Language (WML). • WML (Wireless Mobile Language) • A markup language based on XML designed specifically for devices that implement WAP. • SSL (Secure Socket Layer) • The SSL (Secure Socket Layer) protocol has also emerged which maintains the security and integrity of the transmission channel by using encryption coding.

Security Issues • Current Security Standards • Service provider encryption • CMEA (64 bit key) • Used to encrypt the control channel • Not specific to voice data • ECMEA (240 bit mask) • Mask data then interleave voice bits • Derivation of CMEA providing a secured pathway from transmitter to intended receiver • Specific to voice and transaction data • SCEMA • Encrypt voice and transactional • Hardware Biometrics • Fingerprint scan for user authentication

Security Issues • Mobile Transaction Standards • There are numerous companies, coalitions, governments, etc. that are working on Mobile Transaction Standards. • Nothing has been agreed upon yet!

Security Issues • Industry gap-fill • SMS transaction • Digital wallet via GlobeTelecom • 13 Million subscribers • Domestic transfers • Person to person without bank accounts • Typical web-based transactions using SSL • Biometrics • Japan has over 5 million biometric enabled cell phones • Uses SIM and Fingerprint for identification

Security Issues • The Legal Framework • No standardized laws • Minimal enforceable agreements across international borders • First come-first serve, follow-the-leader mentality when it comes to privacy, security and standards enforcement

The Future of M-Commerce North America • Approximately 5 years behind the rest of the world • Due to a lack of standards • Due to a perceived lack of security in m-commerce • Pervasive high-speed internet means less need for m-commerce

The Future of M-Commerce The Rest of the World • M-commerce is already fairly well established • Lack of banking infrastructure helps in underdeveloped nations • Greater adoption for gadgetry and handheld devices, especially in Asian markets

The Future of M-Commerce What’s in store for the United States over the next 5 years? • 100 million m-commerce enabled phones right now, which will increase over the next 5 years • Traditional web storefronts working hard to make themselves available via phone • Payments via phone through your bank, credit card or online account • Banking applications developed specifically for download to phones

The Future of M-Commerce Who are the players? • Phone browser optimized web storefronts • Partnership with PayPal for payment • Low-bandwidth shopping solution

The Future of M-Commerce Who are the players? • Link your bank account or credit card • Send money in three ways: • Text message • Obopay phone application • Your phone's web browser

The Future of M-Commerce Who are the players? • Announced agreement with BancorpSouth to offer banking capabilities to wireless users • Download a mobile banking application to: • View account balances • Transfer funds • View and pay bills

The Future of M-Commerce • What’s in store for the rest of the world over the next 5 years? • M-commerce in the Asia Pacific region will see a steady 18.4% growth over the next 5 years • Media content (phone advertising) • Collaboration technologies • Social network applications

The Future of M-Commerce Making waves • January of 2007 released a “mobile platform” • Mobile platform is a suite of applications • The highlight being it is the first contactless* mobile application *“contactless” refers to RFID technology to make payments via the phone to a smart reader

The Future of M-Commerce Partnerships & • Introduction of the universal SIM (USIM) card • Download application over-the-air (OTA) • Application is stored on the USIM card so it can be transferred between devices

The Future of M-Commerce Worldwide Predictions • Juniper Predicts m-commerce will grow to be an $88 billion industry by 2009 • “Digital goods such as mobile entertainment - ringtones, games, wallpaper, gambling etc - will continue to be the largest application for buying and selling via the mobile phone, but that ticket purchases will also emerge as a major application area, and make up over 44% of the $88 billion global m-commerce market”

M-Commerce Questions?

MITP 413: Wireless Networking