Cloud based payment gateways for Telecom Service providers in India- A possibility Divya Lakshmi Gopal divya. [email protected] com ABSTRACT Telecommunication has emerged as a key driver of social and economic development in India. Major sectors of Indian Telecommunication industry are telephony, internet and television broadcasting. A majority of the revenue from telecom industry comes from payments for the services offered. Online payment platforms provide a convenient and faster mode of payments for the increasing number of users in India.
This also provides a better opportunity for telecom providers to recover payments from a majority of subscribers, providing them multiple channels for payment. As technology advances and the customer base increases, providing a highly available system for payment and subsequently, uninterrupted services has become challenging for Telcos. Cloud based payment gateways can provide solutions that will assist telcos provide increased customer satisfaction and value addition. INTRODUCTION
Payment gateway is an online interface that can accept payments from the customer, send request for authorization to the acquirer and process customer request, based on confirmation from acquirer. Whether the customer goes for an online payment by logging in to his PC/Laptop by connecting to internet, or he tries making a payment from a point of sale device present, or he tries making a mobile payment, its the payment gateway interface that the customer interacts with. Being the interface between customer and the end system, payment gateways could be customized to provide an array of services to customers.
In the simplest terms, cloud computing refers to accessing software and hardware over the internet. Cloud computing can be implemented at different levels, I. e SaaS(Software as a service) or IaaS (Infrastructure as a Service) or HaaS(Hardware as a Service). Implementing cloud computing greatly reduces the initial cost of procuring a hardware or software. Another advantage is that maintenance is mainly the responsibility of the cloud service provider. There are different kinds of clouds like public cloud, private cloud and Hybrid cloud.
While implementing a cloud for payment gateway, the main concern would be related to data security and adherence to regulatory laws of the land. Many of the current cloud based payment gateway providers have been able to find a way out of this situation by implementing a private-Hybrid cloud architecture for the clients. This paper aims at identifying the advantages for a telecom provider in India, of implementing a cloud based Payment gateway. CLOUD BASED PAYEMNT GATEWAY – IMPLEMENTATION
Payments through alternate channels have increased manifold, thanks to the advent of technology. Gone are those days when you would see a huge queue in front of a telephone exchange on the payment due date. Convenience is the key word for customer satisfaction. Mobile devices have become an inevitable part of today’s living. It is estimated that there are 900 million mobile subscribers in India. There are around 240 million bank account holders. Out of this, 40 % own a mobile phone. Considering the above facts, Mobile payment will become the most popular mode of payment.
Availability of affordable handsets, low mobile tariffs and increasing voice and data network coverage across the country will emerge as key drivers for mobile payments in India. To meet the demands of increasing customer base and load of data passing through the system, the investment in infrastructure is estimated to be huge. The payment gateway servers will have to be designed to handle the increasing load. Telcos will have to shell out a huge amount of money in procuring infrastructure. Cloud based solutions, on the other hand, provide an alternative by providing the infrastructure as a service.
Telcos would be subscribing to the infrastructure service from the cloud provider and will pay only for the services used. The same could be implemented for software and hardware as well. Security issues like transfer of data between payment gateway, acquirer and the telecom provider could be handled by implementing the safety standards similar to those implemented for Point of sale devices. Point of sale devices which could be located in a network different from that of the home network of the provider, data encryption is done in order to ensure secure transmission of data. A similar approach would work well here as well.
In addition, the telco could get into an agreement with the cloud service provider to provide additional security of data to ensure regulatory compliance. Private-Hybrid clouds are provided by most of the cloud service providers to handle this issue. Opensource clouds is another solution, but this might prove a little expensive for the telcom service provider. CLOUD BASED PAYMENT MODELS-ADVANTAGESAs a telecom service provider, the advantages of implementing cloud based payment gateway services are many. With the implementation of cloud -based payment system, the capabilities of the telecom provider is bound to increase manifold.
With proper implementation of the same, telecom provider could also emerge as a Single point of contact for customers for a wide range of services. In a cloud based system, since most of the computations are done on the cloud, even a small/basic handheld device could be used for many types of transactions. Cost Benefits In a cloud based payment gateway, the infrastructure, hardware and software or a combination of any of these, could be leased from the cloud service provider as a service. The cost incurred in the procurement and maintenance of the hardware and software could be significantly reduced.
In case the telecom service provider decides to use a third party tool as the payment gateway, then the software could be subscribed to as a service from the cloud. Either ways, the cost benefit for the telco will be significant due to the obvious fact of shared resources on the cloud. Data security aspects could be negotiated with the cloud service provider. Maintenance will also be taken care by the cloud service provider, which is otherwise another area of huge outflow of cash. Performance benefitsCloud computing mainly employs shared utilization of resources.
Also, the payment for the services is based on the utilization. During peak hours, when the load on the server is high, more resources could be requested for, and during off peak hours, the resources could be cut down. This will ensure that the system will have adequate resources to handle multiple requests from customers. Operational Benefits In addition to the revenue generation and the benefits provided to customers, cloud computing architecture of payments will provide oprational benefits as well to the telco. 1) Payment reconciliation is a mandatory part of any payment system.
Data sharing between the financial institution and the telco could be simplified much with a cloud architecture. An option of real time reconciliation between telco and Financial institution could be implemented, similar to what is being implemented in a cloud based research system, where multiple researchers work simultaneously on a shared resource. Faster reconciliation in turn leads to faster realization of money for the telco and better service for the customer. 2) For any payment related discrepancy, a discussion could happen in realtime, between concerned teams and payments teams with a similar kind of implementation. ) Another obvious benefit of cloud based payment gateway is that data is present in the cloud, hence the location based disaster recovery is not relevant. This in turn leads to easier recovery of data in case of any unforeseen events. 4) Daily reports to be generated and shared with management can be generated during off peak hours when the load on the system will be minimum, thus optimizing the utilization of resources. Sharing of resources with management will also be a much simpler process with cloud computing being the technology implemented. ) During off peak hours when the load on the system is estimated to be lower, the automatic requests processing could be done. Eg: Auto debits from credit card and bank accounts could be scheduled at off peak hours to handle load. 6) Fraud screening which is another key aspect in payments could be scheduled to be run on a regular basis and and also during the time when the load on the system is estimated to be low. Close to real time fraud screening reports could be generated, based on which fraud management team could make decisions to prevent fraudulent transactions to the maximum possible extent. ) Reports to management can be generated , considering the peak-off peak load details. Semantic web can be used to generate reports which provides ample data for management to analyze various aspects of customer usage and payments. Management would have more data in hand to design new tariff plans, payment options etc. Value added services to customers Increasing the number of useful value added services is directly proportional to the convenience factor perceived by the customer. Hosting payment gateway server on a cloud has the direct cost benefit to the company, which could also percolate down to the customer.
Semantic web could be easily implemented on cloud computing platform. Semantic web describes the relationships between objects and also the properties of the objects. For easier understanding, it is the semantic web technology which displays links which might be of interest to us, based on the current search. Eg: If one searches for cars on Google, on the right panel, we might also see some advertisements of car accessories, car loan options etc. This Semantic web technology added to the telco payment gateway could lead into a lot of value added services that could be provided to the customer.
Customer details while making payments are captured in the payment system. In case the customer is making a payment after due date, an option to subscribe for autodebit could be provided. This timely suggestion would lead to more customers registering for autodebit, in order to avoid missing due dates in future. Based on the ip from which payment is made, location of the customer could be traced and roaming offers could be provided to customers who are out of their home network. In case of roaming customers, GPS facility could be offered.
Plans could be suggested for those customers based on the payment amount. Based on the split of the bill, better data plans could be suggested in case the data component of the bill is higher and so on. Number of channels of payments could be increased. Eg: Social networks could be used as a payment channel. Fundrazr. com has implemented a similar functionality on the paypal payment service. Having implemented this, telco could reap the multiple benefits of providing a channel , as well as increased used of network resources by the customer.
Operator billing is another important value add that can be provided to customers. This is a case of partnership of telco with other partners. Details of the same is explained in the next section. Payment technology of tomorrow, NFC(Near Field communication) can very well be implemented on a cloud- based payment system. NFC is a payment mode in which the details of credit card/loyalty card could be stored in the smart phone and the smart phone could be brought in contact with POS device, which will automatically detect the card details and initiate payments or redeem points.
Since cloud computing relies on data present in the internet, redemption of points and authorization of card would happen much faster than in a traditional server. Partnership with multiple sources Operator billing will bring telecom providers to a position where sources from diverse arenas of business would want to partner with the telecom provider. Operator billing is a facility by which a customer could make payment even in the absence of a physical credit card or bank account. Customer will be able to download a paid application from android/IOS without registering a credit card.
Amount will be deducted from the customer’s prepaid telephone account balance or will be billed to the postpaid telephone account. Customer could book tickets through online/mobile channels without pinning credit card details. Amount will be charged to the customer account. These are some of the applications of operator billing facility. Once operator billing emerges to the fullest, the customer would receive only one bill for all the expenses for a month. Thanks to be possibility of implementation of semantic web on a cloud based payment gateway server, multiple partnerships could be expected.
Eg: Financial institutions might want to target those customers whose postpaid bill amounts are above a particular value. Travel planners and transport facilitators would want to target customers based on location. Smartphone manufacturers would want to target customers based on the usage of the equipment. It is also possible to access multiple clouds by implementing required security measures. This would mean that, with a cloud based payment gateway, we might be able to pay the bill for one telecom service provider from another telco’s network. This would mean a complete convergence of communication technology.
All the partnerships for the telcos would mean revenue. Hence, the implementation of a cloud computing payment service is bound to yield good returns to the telco. CONCLUSIONS ;amp; INFERENCES We can see that cloud based online payment system is definitely going to add value to the telecom provider. The key to generating profits by migrating to a cloud based payment model lies in optimization of use of resources. A proper implementation taking into account , the load on the system and the service availability is definite to yield benefits. Revenue is directly proportional to customer retention.
When customer retention itself is proportional to the customer satisfaction, providing the best services to customers at the right time, all the time, is of prime importance to any service provider. Cloud based payment system, as we have seen, has the potential to make the telco a single point of contact for all the customer payments and services. 5. ACKNOWLEDGMENTS ;amp; REFERENCES Lee Chao, Cloud Computing for teaching and Learning : Strategies for Design and implementation. Nick Antonopoulos, and Lee Gilliam, Cloud Computing : Principles, Systems and Applications.
An Article on people centred payments,The future of payments: Is it in the cloud or NFC, http://www. tsys. com/Downloads/upload/Future-of-Payments-Cloud-of-NFC-WP-2. pdf An article on paypal model of payments, Why Paypal will open up the walled garden of Payments, http://www. pymnts. com/briefingroom/payments-and-open-platforms/payments-in-the-cloud/why-paypal-will-open-up-the-walled-garden-of-payments/ An article on cloud computing, Whats in the cloud for payments, http://pymnts. com/briefingroom/payments-and-open-platforms/payments-in-the-cloud/what-s-in-the-cloud-for-payments-2/