Page 123 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

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

An increasing number of merchants use simple, plug in magstripe and EMV card readers plugged into the
audio jack of smartphones. Transaction data is sent to a processing switch, which may withdraw funds from
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a DFS wallet or a bank account, depending on the configuration.

9 Thin SIM technology in DFS

9.1 Overview

Thin SIM – also called sticky SIM ‒ is a relatively new technology being used in DFS markets to address
technology access issues in DFS. It is used to facilitate secure transactions, as well as to provide access to DFS
where MNO coverage is not available.

The thin SIM is a paper-thin plastic sheet embedded with a number of contact points and a chip that is stuck
on top of a standard SIM card. Once in use, the thin SIM essentially converts any handset into a dual-SIM
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phone. Users can then access services on both networks and have two SIM cards in one slot of the device.
The solution is device and MNO agnostic.

The Global System for Mobile Communications Association (GSMA) undertook a study on thin SIMs after
concerns were raised by some MNOs that there may be security and privacy implications in using the
technology. In essence, he GSMA report said that interception risks were negligible if thin SIM technology
was properly implemented. 78

9.2 Uses of thin SIMs
Kenyan mobile virtual network operator (MVNO) Equitel – the telecommunications arm of Equity Bank – uses
its thin SIM technology offered to its customers to use cheaper USSD and STK bearer services from MNO Airtel.
79 Use of the shortcode *247# will divert the session to use the Airtel network.
Similarly, India’s Yes Bank launched its own thin SIM payments solution for feature phones. The sticker installs
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a STK-based app linked to a prepaid store of value.
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Thin SIM technology is also being offered for use in DFS DigiTally to compensate for lack of MNO coverage by
providing an offline alternative for doing P2P transactions. 82

76 Card readers have been popularized by, amongst others, Square, and allow almost any smartphone to accept payment cards. The
readers usually plug into the audio jack of the smartphone.
77 The technology was developed in China in 2005, primarily designed to avoid roaming fees.
78 GSMA (2014) Generic Overlay SIM Security Assessment, available at http:// www. gsma. com/ publicpolicy/ wp- content/ uploads/
2014/ 08/ GSMA- Security- Group- Overlay_ SIM_ Security_ Assessment_ August_ 18_ 2014. pdf
79 See Equitel (2016) Get Activated, available at http:// www. equitel. com/ my- phone/ get- activated
80 ETCIO (2016) Yes Bank To Launch SIM Sleeve Payments Solution For Feature Phones, available at http:// cio. economictimes.
indiatimes. com/ news/ mobility/ yes- bank- to- launch- sim- sleeve- payments- solution- for- feature- phones/ 51780748
81 The transactions currently offered P2P fund transfers, person-to-account (P2A) fund transfers using NEFT and IMPS, balance
checking, payments to merchants for small and large value purchases and payment of bills, top-ups, and recharges.
82 DigiTally achieves this via a STK or as a smartphone app, or in thin SIMs for basic phones. To transfer money from one phone to
another, a user exchanges cash for DigiTally credit via an agent, provided as a unique code. When the phones next connect to the
network, their transaction history is uploaded to the servers of the DFS system.

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