How has custom telecom software development reimagined the ways people can pay for products and services and how are telecom solutions impacting how operations are confirmed?
The development in how people pay for things has been extraordinary, especially if you look at the last ten to fifteen years. The leaps and bounds that emerging technology has enabled hit society where it counts – the wallet. The progression from coins and banknotes to checks and credit cards and then to phone, blik and smart watches has been rapid. To get an idea of where payments are going, it’s essential to understand what led us to this point. Read on to learn more about the payment transformation made possible through telecom software development, and whether it’s worth keeping that piggy bank or not.
For telecom solutions dedicated to payments, the one constant is change
As the manner in which consumers shop has changed dramatically, it is only logical that the method of buying products and services has also changed. Though it did not initiate the shift towards online purchasing, the COVID-19 pandemic certainly accelerated this shift and, as with all aspects of life, had an impact on telecom software development. Research shows that global retail ecommerce sales reached $4.92 trillion in 2021. Moreover, 44.5% of ecommerce transactions in 2020 were made by digital wallets. And this trend looks to continue, as the global mobile payment market is expected to achieve an annual growth rate of 23.8% between 2021-2026.
We are truly witnessing an accelerating evolution. In recent times, the pace of telecom software development means change is certain and increasingly faster and more transformative. Just look at the evolution of payments; from coins, banknotes and checks to embossed credit cards and credit cards with a magnetic stripe. This led to cards with a chip proximity and card proximity band for payments by phone, Near Field Communication (NFC) payments via smartwatch and blik (a code generated from the Internet/mobile banking). The latest innovation is PayEye, which is a payment achieved by scanning the iris of an eye.
Custom telecom software development is essential for ensuring payment security
Confirming operations are an important aspect in this evolution, as the viability of any new payment alternative needs to demonstrate it is reliable and safe. Take for example an embossed card, which was imprinted with the number on the payment slip and signed by the card owner. In order to popularize this type of payment, banks assumed the risk. Firstly, they credited the payment up to 54 days, but also the customer could relatively easily deny the settlement and state that it was not his payment. Banks took it upon themselves, knowing that the scale of such denials would not be large, and the profits from popularizing payments would be much greater. By doing this, banks were able to stimulate consumption and encourage the transition to this type of payment. For clients, card payments were safer, because they did not have to carry cash all the time and did not need to worry about being robbed. And in the event of card theft, it was enough to report it and the bank would take the loss on themselves. The convenience of cash-free transactions also boosted customer experience.
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Throughout this evolution, telecom software development enabled validation processes to become stronger and the risk involved was reduced to zero. In the case of magnetic cards, although it was still possible to confirm with a signature, there was a pin and direct communication between the payment terminal and a person’s bank account, thus providing an extra layer of security. Debit cards appeared next, because it was no longer enough to just credit transactions, which were confirmed on an ongoing basis.
The next forms and methods of payment have appeared with convenience in mind, in fact, it could be argued that customers themselves were the ones demanding newer, more convenient manners of payment, which telecom software development was able to achieve. This was the case with the introduction of contactless technology. Payment confirmation has also evolved for Online Banking. Code cards, printed by banks, were sent to customers first, followed by confirmation via SMS codes. It is more or less the same with BLIK payments and internet payments in general, authorization by confirming 3Ds (3D Secure) appeared. In this case, after initiating the payment in the web portal / terminal / ATM, a confirmation request appears on the user’s phone. This confirmation is often enhanced by biometrics, i.e. scanning fingerprints.
Telecom software development: the technology behind payment convenience
The mechanism behind the confirmation of operations requires the installation of a mobile application on a phone, which is always active and waits for push messages. For this, users need active internet packages. This can be a problem when traveling abroad, for example, due to the roaming costs, both in terms of security and operations. It is possible to embed the application on the SIM card and use OTA (Over the air) technology to update the software and configuration, without the need for consent or actions by users. In addition, communication with the embedded application is carried out using telecommunications protocols, which is much more secure in relation to the open Internet and can be also carried out for free while roaming. Finally, it is possible to operate independently of the phone’s operating system. It can even work on old phones through Unstructured Supplementary Service Data (USSD) technology, without the need to install any software. This especially simplifies matters for older users and people who are not tech-savvy.
What’s more, Mobile Connect technology makes it possible for operators to confirm or authorize operations. But beyond this additional capability, there is also the transfer of consents, i.e. authorizing the transfer of sensitive data. This significantly simplifies, for example, onboarding in online stores and confirmation of identity. Why? Because the telecommunications operator has already verified the user (both for postpaid and prepaid) and has all his data. The type of data could vary, but probably includes, among other things, an address, and also information about the customer’s age.
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Importantly, obtaining this data can be done securely and effortlessly, both for the provider (like an online store) and the customer, if the right telecom software is used. For example, when a customer makes a purchase in a new online store, it is enough to provide a telephone number. A prompt will then appear on the customer’s phone asking for consent to provide the address data. Once the client clicks OK on the phone (or, depending on the confirmation process, enters a pin or uses biometrics) the customer’s work is done and nothing more needs to be entered. This obviously makes things easier and streamlines the process of data collection. In a different situation, for example an online store that sells alcohol, the age of the user must be confirmed. A prompt appears with each purchase asking for permission to provide age information. After confirmation, this information is forwarded to the store by the telecommunications operator, certifying it at the same time and thus fulfilling the obligation that is imposed on the store. The point is, the individual needs of an online business can be met through Mobile Connect. Without this mechanism, the operation of such an online store would not be possible.
Turn to telecom software that enriches your solutions
In today’s society, businesses need to strike a balance between ensuring safety and compliance with legal requirements, on one hand, and providing a smooth, rewarding experience on the other. Depending on a company’s strategy, this could take the form of enabling gateway SMS, implementing digital wallets to pay bills, expanding payment terminals or building fully-functioning internet and mobile banking platforms. The most important thing is to utilize custom telecom software development to fit your needs. Software Mind has been actively involved in this evolution for many years. Securing transactions and confirming 3DS operations and creating seamless integrations with payment providers and payment settlement systems, including content providers, is essential in today‘s digital world. That’s why leading organizations turn to Software Mind, which has lead the way in adopting the Mobile Connect standard by carrying out the first implementations in Poland and Germany. Specializing in security and identity confirmation, our teams have extensive experience with alternative Know Your Customer (KYC) solutions and software that confirms identity using blockchain networks. Our passionate experts are dedicated to developing telco solutions that change the world for the better. Fill out the contact form and find out how Software Mind can tailor telecommunications solutions to suit your business and achieve your goals.
About the authorWojciech Kozak
Software Delivery Director
A Software Delivery Director with over 20 years’ experience in the IT industry who has spent the past 15 years working with the largest Polish TELCO Operators. Wojtek combines a technical background in application development services with wide business knowledge, especially as regards the telecommunication industry. His extensive experience and passion enable him to effectively manage development teams that implement ambitious projects with high quality.
