Page 121 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

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

The fiat-backed store of value account characteristic of DFS is – where allowed by regulation ‒ available from
MNOs, banks, and service providers (SPs) offering DFS. These accounts are now being used in a wide range
of digital transactions that may involve: The purchase of physical and digital goods and services; bill and
government payments; P2P transfers; for and receipt of social welfare benefits.

Some DFS SPs also support companion magnetic-stripe and Europay, MasterCard & Visa (EMV)-based general
purpose reloadable (GPR) payment cards, as well as contactless payment tools such as NFC which allow users
to make payments to merchants at distances of a few centimeters to a few meters. The contactless payment
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tools are linked to fiat-backed DFS stored value accounts.
Digital value chain payment technologies are described below .
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8.2 Sound-based

8.2.1 IVR

The early providers of VAS in the 1990s used IVR to facilitate payments. As noted above, IVR is also being used
in some DFS implementations for primary service access, although this is very rare nowadays.
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8.2.2 Acoustic-based access

Acoustic-based access technology – also known as sound-based, or NSDT ‒ allows the microphone of any
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basic phone, feature phone, or smartphone to be used for data capture, with the standard MNO voice channel
acting as the data transporter. Transaction data is encrypted through the phone’s audio channel using a
‘cryptosound.’ In a merchant/agent environment, the merchant or agent enters the amount on the POS
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terminal device. The customer then enters their phone number and personal identification number (PIN).
On the terminal, the acoustic platform dials the customer’s phone. The customer then answers the call and
places the phone next to the terminal or agent’s handset. A one-time encrypted password is exchanged via
the cryptosound between the two devices and the transaction is complete. 70

8.3 SMS and short codes

In a VAS environment, SMSs may be sent by a mobile user from their mobile phone – as a MO-SMS – via
special shortcodes to systems run by third-party vendors of VAS-type digital goods and services such as mobile
jokes, sports alerts, and phone ringtones. SMS shortcodes are being used in DFS through STK access and for
customer care services.
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SMS-based STK is used as the secure UI to DFS in a number of implementations. Unencrypted (cleartext) SMS
messages are also used for 2-factor verification purposes in DFS: A bank or SP will send a one-time password
(OTP) to a user’s phone via SMS, which the user must input into a challenge menu or screen to validate their

65 Some systems, like NFC and RFID, allow cheaper NFC chip-enabled stickers to be placed on the device instead of embedding
a more expensive NFC chip inside. The sticker version of NFC does not have the same level of functionality as the embedded
version.
66 There is also Radio Frequency Identity Magnetic Secure Transmission, and Bluetooth Low Energy (BLE), but these are seldom – to
date – found in DFS implementations in developing markets. They may gain traction in certain markets over time.
67 Airtel (2016) India’s First Payments Bank Goes LIVE-Airtel Payments Bank Starts Pilot Services In Rajasthan, available at http://
www. airtel. in/ about- bharti/ media- centre/ bharti- airtel- news/ corporate/ india++first+payments+bank+goes+live- airtel+pay-
ments+bank+starts+pilot+services+in+rajasthan
68 NSDT is the trade name for the acoustic access service offered by Tagpay. See www. tagpay. fr
69 Zhang, B (2013) PriWhisper: Enabling Keyless Secure Acoustic Communication for Smartphones, available at https:// eprint. iacr.
org/ 2013/ 581. pdf
70 The technology is used by Yes Bank (India), Pepele Mobile (DRC); Netcash (Zimbabwe); MoboMoney (India); UltraCash (India);
and Alipay (China).
71 DFS users send a SMS to a shortcode and will be called back by the DFS SP’s customer care desk. This saves time as they do not
need to be on hold.

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