Page 120 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

7.4.3 Java-based feature phone applications

In 2012 the first Java DFS apps for feature phones were launched and are now being used in a number of DFS
implementations around the world. The icon-based menus make it easier for illiterate and semi-literate users
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to navigate DFS options presented in the UI.
Technically, small Java ‘applets’ are installed on compatible phones either via Bluetooth or OTA using WAP. This
method is similar in principle to a smartphone app, but running on a less sophisticated type of handset OS.

Generally, although they use encrypted SMS, Java-based DFS apps are more efficient and cheaper to operate
than STK access to DFS since multiple SMSs for facilitating transactions are usually not required. Java applets
mostly use bank-grade encryption for SMSs.

7.4.4 Smartphone-based interfaces

The first smartphone-based OTT apps for DFS in developing markets emerged around 2010 and have grown
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in use as cheaper smartphones emerge.
Compared to WAP, USSD, STK, and even Java apps, these apps provide a rich-media user experience (UX) that
utilize smartphone device features which include large color screens, touch access, faster access through 3G,
as well as more context-sensitive access to DFS services, including NFC-based merchant payments. Most run
on Google’s Android OS. There are, however, security issues relating to some DFS-based apps. To a large
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extent, the interface is also dependent on sufficient (high-speed) bandwidth, which is largely lacking in rural
areas of emerging markets.

8 Digital value chain technologies and transactions

8.1 Overview

As noted above, the mobile phone has been used as a semi-closed-loop basic payment instrument since the
mid-1990s when MNOs allowed their airtime-based stored value accounts to be used to purchase digital goods
and services using the GSM voice channel. This was followed by the use of SMS-based short codes, USSD-based
menus, then Java applets, and smartphone-based applications.

In most cases, transactions using airtime as the store of value are limited by regulation to digital goods and
services than can and must be consumed on the handset. Users then ‒ depending on regulations – have been
able to: Make calls; send SMSs; access the internet; do P2P airtime transfers to users on the same MNO or
other MNOs; to purchase digital goods and services, such as infotainment and gaming services; or purchase
micro-insurance. They access and pay for these digital goods and services in a semi-closed-loop ecosystem by
either dialing into special premium-rated IVR numbers, sending a SMS to special premium rated shortcodes,
or navigating USSD menus via premium rated USSD shortcodes. The most predominant billing types for VAS
have been the à la carte or once-off, and the periodic billing. These are still very popular today.

62 Java is a programming language and computing platform first released by Sun Microsystems in 1995. It is the underlying technol-
ogy that powers state-of-the-art programs including utilities, games, and business applications
63 Times of India (2010) Transfer Funds To Any Bank A/C Via Mobile App, available at http:// timesofindia. indiatimes. com/ business/
india- business/ Transfer- funds- to- any- bank- a/ c- via- mobile- app/ articleshow/ 6973360. cms. See also GMA (2012) Globe To Launch
GCash Mobile App for iPhone, Blackberry, available at http:// www. gmanetwork. com/ news/ story/ 249879/ scitech/ technology/
globe- to- launch- gcash- mobile- app- for- iphone- blackberry
64 See Butler, K et al (2015) Mo(bile) Money, Mo(bile) Problems: Analysis of Branchless Banking Applications in the Developing
World, available at https:// cise. ufl. edu/ ~butler/ pubs/ sec15a. pdf ; and ITU Focus Group on Digital Financial Services report: Secu-
rity aspects of DFS (2017)

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