18 October 2012

EPC White Paper on Mobile Payments

This version of the EPC white paper aims to be an informative read to any party interested in m-payments by using non-technical language. An enhanced overview is provided on the ecosystems for mobile contactless SEPA card payments, mobile remote SEPA card and mobile remote SCT payments.

The overall role of the EPC is to contribute to the promotion of the Single Euro Payments Area (SEPA) and to the evolution of an integrated market for payments in Europe, through helping in or facilitating the development and promotion of standards, best practices and schemes. Therefore this white paper focuses on ecosystems that are based on SEPA payment instruments, hereby covering both four- and three-corner models.

Since mobile phones have achieved full market penetration and rich service levels they are an ideal channel for SEPA payment instruments. The usage of the mobile phone is hereby primarily considered for the payment initiation whereas the underlying payments are based on existing SEPA instruments. When starting this work, the EPC analysed the different payment categories and has given focus to mobile contactless SEPA card payments (MCPs) and mobile remote SEPA card and SCT payments.

For each focus area of mobile payments a detailed analysis through the specification of key use-cases is provided in the document. Furthermore a description of the ecosystem, the high level architecture and the most important infrastructure aspects are given. Also the concept of mobile wallets is briefly introduced.

This white paper endeavours to:

• inform stakeholders of the EPC’s commitment to mobile payments in SEPA;
• describe some elements of the rationale for payment service providers (PSPs) and other interested parties wishing to enter the mobile payment services market;
• demonstrate the consumer adoption potential of mobile payments by presenting several realistic and illustrative scenarios for the use of mobile payments;
• collect stakeholder views and feedback.

The main conclusions of this white paper are as follows:

• For mobile contactless SEPA card payments, the choice of Secure Element (SE) has a major impact on the service model and the roles of the different stakeholders.
• For mobile remote payments, three primary challenges have been identified:
  • convenience of transaction initiation and beneficiary identification for payments initiated by the payer;
  • certainty of fate of the payment for the beneficiary;
  • immediate (or very fast) payments.

While many of these identified challenges are not specific to the mobile channel, an early resolution is key if SEPA payment instruments are to become successful in this environment.

Although, it is up to the individual stakeholders in the mobile payments ecosystem to decide if and when they will offer their services in this area, the EPC aims, with the publication of this document, to pave the way for efficient launches of mobile SEPA payments. It is further to be noted that various sections of the document can also be applied to non-SEPA based mobile payments.

Next to working with other stakeholders involved in the mobile ecosystem, the EPC further plans to engage with relevant industry bodies to contribute to the development of open specifications for the interoperability of mobile payments, which can be used by the payment industry and all interested parties.

Finally, the EPC also plans further work on different aspects of mobile wallets in cooperation with relevant stakeholders and organisations as mobile wallets are still in their early development phase initiated by the payer;

White paper on mobile payments

© EPC