Zimbabwe-based banking solutions provider Edgetech Solutions is preparing to launch a new mobile payment service that uses sound-based communication technology from NearBytes to let people make payments in stores with their phones.
When launched, the Edgepay solution will generate disposable payment codes that are played to an Edgetech point-of-sale device from a mobile phone running the Edgepay app. The codes are one-time passwords (OTPs) that ensure the code can only be used once, for that specific moment and for a specific value, Brazil-based NearBytes says.
“A native application integrated to NearBytes is installed on a mobile device; on the POS terminal, we also have an application integrated to NearBytes using the Linux API for NearBytes,” Wilson Tawodzera, Edgetech’s managing director, explains.
“The customer can view the transaction details and then inputs his mobile banking PIN to authenticate the transaction. The details are transferred back to the POS terminal from the mobile device, including the authentication details which are encrypted. The POS terminal sends the request to the bank for processing and prints a receipt on successful response.”
A video shows how the service will work:
“The OTP generation is based partially on hashing algorithms and random generated data,” Marcelos Ramos, NearBytes’ chief technology officer, told NFC World+.
“Part of the code information is based on the seed, time and hashing function model, like the one the current banking tokens use. Another part of the code is based on large random generated data dictionaries that makes it impossible to tap into a transmitted code and change its contents.
“Another part of the code is also based on the amount of credits to be paid and the user’s PIN number, which is not stored on the device. The code can’t be decoded, it can only be authenticated as a valid code for a valid purpose. The paying party doesn’t need to be online while paying; only the store needs to be online and most already are for EMV card authentications.”
“The mobile payments company validates the code with our TSM server,” Ramos added. “The server will be integrated with Edgetech systems. So, for each payment, the OTP will be authenticated in our TSM server. The rest of the process is handled by Edgetech. Our TSM just authenticates that some particular identity is willing to pay a certain amount of cash. Checking balance, transferring funds and all the rest is up to the payment company.”
The companies completed development of the service a few weeks ago and are eyeing banks and financial institutions as the target market. Edgetech hopes to start implementation “within the next month or so”.
“We expect this product to be quite popular, because the use of sound to transfer data does not require special hardware apart from a speaker and microphone,” Tawodzera continued.
“Banks have been eagerly waiting for a way to utilise mobile phones to make payments across different platforms; we have some banks really interested and, quite soon, we should have multiple implementations.”
“The POS integration for mobile payments is just the beginning,” he added. “We see Edgepay growing to encompass things like ATMs and ecommerce payments. We believe in adding value for our customers, and our prices are the most affordable around.”