1. All the 12 Payment Enabling
Technologies & 54
Illustrative Companies
White Paper written by:
Let’s T@lk Payment$ and Knowledgefaber
April 2014

2. Table of Content
Payments enabling technologies Page
i. Near field Communication 1
ii. QR and Bar Code 2
iii. Bluetooth Low Energy 3
iv. Mobile Card Reader 4
v. Email/Chat/ Phone 5
vi. Biometric 6
vii. Radio frequency identification (RFID) 7
viii. Sound Wave 8
ix. Magstripe Emulation 9
x. SMS/USSD, Mobile internet 10
xi. HotKnot 11
xii. Dynamic Magnetic Stripe 12

3. Near Field Communication
Near Field Communication (NFC): NFC is in its most common avatar is a Tap & Pay solution that can be used for retail
offline payments, transit, entertainment and numerous other touch points. Any unattended payment situation such
as a parking lot presents huge opportunity. For e.g., clipper card or any cashless cards being used today for public
transport can be integrated into the ubiquitous phones itself thereby making the public transport payments easier
How it Works
Uses radio communication to establish a
connection between two devices in close proximity.
Use Case
Payments, file sharing, transit, ticketing, mobile
top up, advertising
Strengths
Easy to use (tap and go)
Weaknesses
Limited acceptance to date; too many stakeholders;
requires investment in NFC-enabled terminals
Security Risks
Electronic eavesdropping, data modification
Companies involved
1

4. QR & Bar Codes
A Quick Response (QR) code is a 2d readable bar-code designed originally by DENSO Corp. in 1994 for Japanese auto-
makers to track parts. With smart phones, and QR codes, customers can stores their banking account information on
their phones, go into a store pick out an item, and instantly scan its barcode and check out.
How it Works
Two-dimensional optical label contains data that
can be read by any imaging device
Use Case
Payments, advertising, loyalty, tracking, ticketing,
top up
Strengths
No special hardware required; can be used with any
smartphone; Cheap and easy to create
Weaknesses
Lack of familiarity among users; camera phone and
specific reader software required
Security Risks
Malicious codes
2
Companies involved

5. Bluetooth Low Energy (BLE)
BLE (e.g., iBeacons): Bluetooth low energy (BLE or ‘Bluetooth smart’) is a wireless computer network technology
which allows connected devices to communicate with each other while keeping the energy consumption by the
devices at a very low level.
How it Works
Uses radio frequencies to passively connect BLE-
enabled devices to beacons
Use Case
Payments, geolocation, shopping, transit, events
Strengths
Low power requirements, low cost, most mobile phones,
tablets, and computers are compatible
Weaknesses
Possibility of information overload to customers
Security Risks
Susceptible to eavesdropping attacks, but frequency
hopping reduces exposure
3
Companies involved

6. Mobile Card Readers
These include Mobile card readers, Chip and Pin card readers that insert into the audio jack of the phone
How it Works
Dongles plugged into a mobile device allow swiping
of traditional mag-stripe cards.
Use Case
Retail Payment Acceptance
Strengths
Portability, ease of use, low cost
Weaknesses
Varying degrees of security (and consumer trust); lack
of durability; Merchant reluctance (particularly micro)
Security Risks
Can be modified to siphon card data, but hardware can
be modified
4
Companies involved

7. You can transfer money through email (Dwolla, Paypal, Google), through Chat (Wechat from Tencent), and phone
(Dwolla, others)
How it Works
Users can send P2P payments with linked debit
accounts. Funds are typically transferred using ACH
network.
Use Case
P2P funds transfer; bill payment
Strengths
Speed of transaction, ease of use; no new account
(i.e. PayPal); Little to no cost to users (if used with
bank account)
Weaknesses
Security is low
Security Risks
Apps have few security features (i.e. Square Cash has
no passcode), but data transmissions are encrypted
Email/Chat/Phone
5
Companies involved

8. Biometric
How it Works
Consumer’s accounts linked with biometric information
which is used as part of two factor authentication to
complete a txn
Use Case
Transaction authentication, passwords, etc
Strengths
High level of security; no money or cards are needed
to complete a transaction; Encrypted biometric
database
Weaknesses
Requires users to setup a profile preemptively
Security Risks
“Mimicry” attacks; brute-force attacks
6
Biometric identification basically means identifying the individual through certain physiological & behavioral aspects
of the individual. Involves use of different scanners designed to store specific biological traits of the person.
Behavioral traits can also be recorded in terms of signatures and vocal characteristics
Companies involved

9. Radio frequency identification (RFID) is the wireless non contact use of radio frequency electromagnetic fields to
transfer data, for automatically identifying and tracking tags attached to objects. The tags contain electronically
stored information. According to research and markets, the global RFID market is expected to generate revenues
worth $3,925 Mn in 2016, increasing at a CAGR of 29.3%, from a value of $1,087 Mn in 2011.
How it Works
RFID is the basis for NFC - Uses radio
communication to establish connection between
two devices in close proximity.
Use Case
Payments, transit, tolls, vending machines and
tracking
Strengths
Easy to use
Weaknesses
Only permits one way communication between
devices; typically can only be used for low value
transactions
Security Risks
Eavesdropping; data modification
Radio frequency identification (RFID)
7
Companies involved

10. Sound Wave
These are payment systems that use sound waves to connect smartphones with another device. Secure payments are
made over the cloud with the help of sound based technology and data is exchanged through smartphones’
microphones/speakers
How it Works
White noise (transaction specific and valid for a few
minutes) generated by a Smartphone carries digital
information
Use Case
Vending machines, mobile top up, phone-to-phone
information transfer
Strengths
No personal or account data is stored in the sound
transmission
Weaknesses
Will likely support only small value payments
Security Risks
Stolen phone is the primary risk, offset by the fact
that these are small ticket transactions
8
Companies involved

11. How it Works
A key fob generates a magnetic field that can be
ready by an existing POS terminal
Use Case
Payments, transit
Strengths
Merchants do not need to upgrade hardware
Weaknesses
Cannot be used with certain POS devices; can be
cumbersome to use; EMV makes the solution clunky
Security Risks
4 digit pin card numbers can be skimmed
Magstripe Emulation
A patent-pending technology, MST is similar in nature to that used in inductive charging. The technology basically
involves transmission of mag-stripe data stored on the mobile device to the magnetic stripe reader at the POS terminal.
The device’s transmitter is used to send the mag-stripe data over-the-air to emulate just a normal card swipe
9
Companies involved

12. SMS/USSD, Mobile internet
How it Works
User sends a payment request via text message and
the charge is added to user's mobile phone bill or
online wallet
Use Case
Payments, funds transfer, bill pay, top up
Strengths
Easy to use & cheap; user doesn't have to enter
bank/card info; no personal/account data is transferred
Weaknesses
Functionality is limited due to technology
Security Risks
Limited security risk
10
A patent-pending technology, MST is similar in nature to that used in inductive charging. The technology basically
involves transmission of mag-stripe data stored on the mobile device to the magnetic stripe reader at the POS terminal.
The device’s transmitter is used to send the mag-stripe data over-the-air to emulate just a normal card swipe
Companies involved

13. 11
HotKnot
A near field communication technology, it was announced by MediaTek in December last year. The technology uses the
projected capacitive touch panels of devices and does not require the embedded NFC chip or the antenna to work.
How it Works
The technology involves data transmission between
devices through signal transmission between the touch
panels which get coupled. It uses low transmission
power but the data transmission rate is far lower than
NFC technology
Strengths
Transmission rate is far lower than NFC
technology
Weaknesses
Security is low
Security Risks
Susceptible to attacks through pairing
Use Case
Payments, funds transfer
Companies involved

14. How it Works
The device comes with companion android and iOS app
used by the end user to store multiple card data either
by taking pictures of cards or by using headphone jack
dongle. The swapping of card info can be done using
BLE or other pairing options
Weaknesses
May not be compatible with EMV chip enabled cards
Security Risks
Currently such devices do not provide a security for
accessing it
Use Case
Payments, funds transfer
Companies involved
Dynamic Magnetic Stripe
Strengths
Devices are capable of storing different types of card
data: gift cards, ATM cards, credit cards.No need of
carrying multiple cards and also does not require the use
of cellphone for payment.
The technology can be found in form of a device. Such devices have been developed by firms like the hardware startup
“Coin” as well as Omne. Such devices are capable of acting as a standard credit card but capable of acting as an
integrated form of multiple credit cards
12

15. Authors:
Let’s T@lk Payment$
Lets Talk Payments is a global initiative which is focused on US, Europe and Asia for
covering innovations in payments. It is being build to become a complete resource
(online digital news, analysis, events, payment product/feature reviews, surveys,
interviews and videos) for the payments industry. The company is based out of
Charlotte (USA) with teams and contributors across the globe.
Knowledgefaber
Knowledgefaber is a fact based research and consulting firm focusing on emerging
opportunities in emerging economies