nowEurope

Europe developed an early lead in mobile telephony, in large part because the major players agreed on the GSM communications standard. Using one common standard made it easy for operators to share network infrastructure, and ensured that clients could easily roam from network to network, as well as from country to country.

In a similar manner, the FP6-funded SEMOPS project – led by a mostly Hungarian consortium of companies - has created an infrastructure for making payments with a mobile telephone, which they see as the first step toward an era of ubiquitous m-commerce.

A major barrier to the wider adoption of mobile payments is the lack of a cheap, secure and universally applicable payment infrastructure. Mobile payment systems that exist today are limited and proprietary solutions. Such systems are relatively expensive to build, and their application is limited to a single purpose. For example, in many cities, motorists may now pay their parking meters with a mobile telephone, however these solutions cannot be used at the flower shop round the corner.

The SEMOPS project has addressed these needs by developing and pilot testing a comprehensive mobile payment solution that can be used to pay for anything, anywhere, at any time.

The Secure Mobile Payment Service (SEMOPS) project, with a budget of EUR 6 million, is co-funded by the European Commission’s Sixth Framework Program, and partners from four different countries, representing banks, mobile operators and technology providers.

The project aims to prepare the market for mobile transactions with a secure solution that can be easily adopted by banks, merchants, mobile vendors and consumers.

Consumers can execute different types of transactions through the SEMOPS infrastructure, including point-of-sale purchases, bill and invoice payment, person-to-person transactions, mobile phone top-up, payment at vending machines and parking facilities, as well as payment over the Internet.

SEMOPS is designed to follow standard bank processes, which makes it relatively simple for financial institutions to integrate into their existing infrastructure. Working with SEMOPS is also cheaper and less risky than developing proprietary solutions. SEMOPS creates a new revenue stream for banks, while also supporting cross-selling and branding.

The SEMOPS service is designed with a multi-layered security architecture. The customer retains full control of the payment process, and approves each and every transaction. If the mobile phone is lost, it cannot be used to make purchases without an accompanying PIN number.

The SEMOPS consortium brings together a mix of multinational companies and SMEs, representing the banking sector, IT, telecoms, consulting, research and retail commerce:

• Motorola Hungary
• Bull Hungary
• Piraeus Bank (Greece)
• Deloitte & Touche Hungary
• Fornax (Hungary)
• Safepay Systems (Hungary)
• Frauenhofer zur Foerderung der Angewandten Forschung (Germany)
• Intrasoft International (Luxembourg)
• Oberthur Card Systems (Hungary)
• Profitrade 90 (Hungary)
• Raiffeisen Bank (Hungary)
• Libri (Hungary)
• T-Mobile (Hungary)
• Vodafone (Greece)

The SEMOPS project has completed the development of its mobile infrastructure architecture and has publicised its efforts at a number of specialised industry conferences and events, such as the CEBIT trade fair in Hannover, Germany and the SIM Summit in Shanghai, China. In October 2004, a number of leading Hungarian financial institutions began a technical audit of the SEMOPS system. In December of that year, Deloitte & Touche completed the first phase of their security audit. The SEMOPS system is now in trial deployment at the K&H bank in Hungary (as of April 2005), and at the WINBANK in Greece (as of October 2004). Trials are also underway at Hungary’s largest Internet service provider, Axelero, a major Hungarian book retailer, Libri, and Turkey’s leading mobile network, Turkcell.