This Small Business Innovation Research (SBIR) Phase I project will determine the feasibility of using secure text messages (short messaging service, SMS) for mobile commerce. Mobile commerce - payment and messaging done via a mobile device such as a smartphone - is technically challenging because of the competing requirements of security, ease of use, and cost to implement. For mass market adoption, transaction speed plays an additional, important role. While mobile devices have tremendous computational power, the challenge is to provide adequate security at sufficient speed in an application that is convenient and usable. Costs, such as application costs, infrastructure costs, and payment clearing system costs are also important for adoption. There are three aspects of SMS-based mobile commerce technology that Hermes Commerce, Inc. will assess in this Phase I research project. First, Hermes will assess the security-speed-usability trade-offs of a secure SMS application. Second, system infrastructure will be evaluated for technical, deployment, and cost considerations. Last, Hermes will evaluate security-speed benefits that might be realized through the transaction clearing system.
If successful, this project will have a broad impact by enabling mobile commerce. Competing mobile commerce technologies include: Smartcards, Near Field Communication-enabled cell phones, and Radio Frequency ID-enabled payment cards. All of these face the challenge of getting customers or equipment manufacturers to implement hardware retroactively in existing devices or design and sell new devices. The company?s secure SMS solution requires very little change by the end user ? only an application downloaded to the mobile device. The simplicity of the approach has the potential to drive wide-spread adoption.
Hermes Commerce, Inc. (HCI) designed, built, tested, and deployed a mobile commerce system for merchants and consumers that facilitates fast, secure, and easy-to-use payments via mobile device apps and a web service-based backend infrastructure. The products that were built and delivered during this project encompass all of the deliverables and objectives stated in the original Phase I project plan and the Phase IB project plan. The mobile commerce platform that HCI built is based upon mobile device apps (currently built for Android and iOS operating systems) communicating with a web service that serves as a front-end for a secure database of user account information and pending and approved transactions. The mobile commerce platform is generic in its construction: it enables any party to request funds from another party or to remit funds in response to a request. The HCI mobile commerce platform is web accessible. All of the functions available to users (merchants or consumers) are accessible via a website. Account information and account settings can be monitored and changed via the website, and a history of transactions is recorded for reference. Additionally, whether through the mobile device apps or the website, consumers and merchants are able to monitor their account balances and transfer funds into or out of their HCI accounts. In response to initial feedback from merchant beta testers, HCI created a variety of POS-like products for merchants to use to request payment from customers. HCI has built a simple mobile device app, a desktop-based Java application, and an iPad-based point-of-sale system. HCI is currently in beta testing with all of these merchant products in either Flagstaff, AZ or Omaha, NE with merchant partners. The mobile device merchant app (for iOS or Android devices) provides a very lightweight and simple mechanism for merchants to submit transactions to customers for approval. This product is designed for merchants that do not want to change their existing point- of-sale system but who do want to use HCI’s payment network to avoid credit card fees. Additional interest comes from merchants that do not already have a point-of-sale system and who do not want a point-of-sale system. For merchants that have a point-of-sale system and who do not want an additional piece of hardware, we have developed a Java application that resides on the existing point-of-sale hardware in the background. When the Java application is needed to submit a transaction to a HCI customer, the application is brought to the fore and the user token and transaction amount are entered. Many merchants have expressed dislike with their existing point-of-sale systems and have requested that HCI build a new, tablet-based point-of-sale system for their operations. During this project, HCI engaged with two merchants to build iPad-based point-of-sale systems that are intimately linked to the HCI payment platform. These iPad point-of-sale systems are ready for deployment, though development is ongoing.
