Mobile payments system employing NFC technology under the Android operating system

Today in Colombia most high-cost payments are made electronically. However, frequent and low-cost payments –equivalent to 42,000 million dollars per month–, have experienced just a tiny transition to electronic transfers, due to barriers such as low levels of inclusion, transactional taxes and a highly informal economy. Meanwhile, big companies have developed and implemented the NFC technology in mobile phones for payment systems. Motivated by the facts outlined above, the initiative to develop a proposal for a mobile payments system using NFC technology is gaining strength. This can be applied in areas of low financial inclusion, such as rural areas, basically in support of farming.


I. Introduction
The mobile phone has become an indispensable daily tool that incorporates many applications and technologies; additionally, it allows the inclusion of sectors of the population that, due mainly to economic and geographic factors, have no or limited access to essential services, as is the case of financial services in rural areas.Offering this type of service in these regions would contribute positively to the country's progress.
In 2013, the growth of the economic index in Nigeria was 6%, of which 83% corresponded to agricultural activities that made use of payments through mobile devices (Barungi, Ogunleye, & Zamba, 2014), a clear example that this type of payment is beneficial to the members of the productive base and can improve their living conditions.
Technologies such as Near Field Communication [NFC] offer features such as confidentiality, speed, cost and simplicity, which are of great interest for the development of applications on mobile phones, because they provide a positive user experience.NFC has become the basis for the development of applications for mobile payments (e.g., Google Wallet, iPhone Pay, Samsung Pay), and for this reason is the alternative that is explored in this article, and from which there arises a viable proposition for payments made in rural areas.The article has five sections: the first describes the general picture of mobile payments; the second mentions alternatives to mobile payment; the third focuses on basic general considerations for the proposed system; the fourth describes the operation, architecture and system roles; and the fifth presents the conclusions reached after the research and development of the proposed system.

II. Panorama of mobile payments
Some of the pioneers of mobile payments, just like those of microfinance, correspond to entrepreneurships developed in countries where people have little economic income.Given the enormous size of the market and the high penetration index of mobile telephony, there is a strong possibility of generating financial returns from the supply of this type of service to the base of the pyramid [BDP] (Kenya), SMART Money (Philippines) and Globe G-Cash (Philippines) are some of the pioneers.Only the latter two companies together turn over about 275 million dollars a month (Alonso, 2015).Figure 1 highlights Africa as the pioneer in bringing products /
Tecnologías como Near Field Communication [NFC] ofrecen características tales como: confidencialidad, velocidad, costo y simplicidad, que son de gran interés para el desarrollo de aplicaciones en teléfonos móviles, dado que ofrecen una experiencia de usuario positiva.NFC se ha convertido en la base para el desarrollo de aplicaciones para pagos móviles (e.g., Google Wallet, iPhone Pay, Samsung Pay), por ello es la alternativa que se explora en este artículo y a partir de la cual se hace una propuesta viable para pagos en las zonas rurales.El artículo tiene cinco secciones: la primera describe el panorama general de los pagos móviles; la segunda menciona alternativas de pagos móviles; la tercera se enfoca en las consideraciones generales base para la propuesta del sistema; la cuarta describe el funcionamiento, la arquitectura y los roles del sistema; y la quinta presenta las conclusiones a las que se llegó después de la investigación y el desarrollo del sistema propuesto.
Uno de los casos más exitosos en el mundo de los pagos móviles es el de M-Pesa cuya implementación tuvo lugar en Kenia (África).Las transferencias punto a punto [Peer to Peer, P2P] del sistema son del orden de US$415 millones por mes, cifra que corresponde a cerca del 17% del Producto Interno Bruto de ese país.La percepción de los usuarios es positiva, como lo evidencian Mas y Redclife (2010), quienes revelan que 95% de los usuarios confía en su proveedor y que el número de usua-services mobile payments into operation, and is evidence of the absence of the West in this respect (Mariliana, 2014).
One of the most successful cases in the world of mobile payments is that of M-PESA, whose implementation took place in Kenya (Africa).The point-topoint transfer [Peer to Peer, P2P] on the system totals around US $ 415 million per month, which corresponds to about 17% of the GDP (Gross domestic product) of that country.The perception of the users is positive, as evidenced by Mas and Radcliffe (2010), who reveal that 95% of users trust their supplier and that the number of registered users increased from 28% to 70% between 2008 and 2014.
Cash is the main barrier to inclusion.Providing coverage to the population living in rural areas is economically costly for financial institutions.Collection of deposits and redemption of savings in small amounts of cash require expensive infrastructure that many of them are not ready to assume.However, once people have access to electronic means of profitable payment, such as M-PE-SA, these form a profitable market niche.
Latin America and the Caribbean offer a favorable ecosystem for mobile payments due to the low level of bankarization of their rural areas and the wide use of mobile phones.According to Asobancaria (2013), in Colombia the percentage of financial inclusion increased from approximately 67% to 72% for the period 2012-2014, a favorable trend, but it still reveals the challenge of including the remaining population, most of which comes from the rural sector.
The above is a good indicator for Colombia.If the lessons of the Kenyan payments system and the results of the Global Microscope study (Alonso, 2015) are appreciated, we conclude that Colombia is among the top ten countries worldwide with the possibility of success for the development of a system similar to M-PESA.
In the Colombian context, there is the smart coffee identity card ("cédula cafetera inteligente"), a system that is a clear example of the benefits that digital payments offer to the rural population.The smart coffee identity card was created only with the idea of paying farmers for coffee harvests, but it has expanded into an rios registrados ha aumentado de 28% hasta 70% entre 2008 y 2014.El efectivo es la principal barrera para la inclusión.Es económicamente costoso para las instituciones financieras brindar cobertura a la población que vive en zonas rurales.La recolección de sus depósitos, la redención de sus ahorros en pequeñas sumas de dinero en efectivo requieren de una infraestructura costosa que muchos de ellos no están dispuestos a asumir.Sin embargo, una vez la gente tiene acceso a medios electrónicos de pago rentables, tales como M-PESA, conforman un nicho de mercado rentable.
Lo mencionado es un buen indicador para Colombia.Si se aprecian las lecciones del sistema de pagos keniano y los resultados del estudio de Microscopio Global (Alonso, 2015), se concluye que Colombia está entre los primeros diez países a nivel mundial con posibilidad de éxito para el desarrollo de un similar de M-PESA.
efficient and transparent distribution channel for subsidies and government credits.The identification card was turned into a personalized prepaid card of payment by the National Federation of Coffee Growers of Colombia and the Bank of Bogotá, which allows farmers to use their card in ATMs and electronic points of sale [point of sale, POS].Since 2014 the identity card has offered coffee growers complete savings accounts in this bank, and the Federation has managed in over seven years to save approximately US $ 15.5 million through the use of the coffee identity card, a figure corresponding to almost 80% of the cost of doing so with cash (Saving..., 2015).
One of the most important advantages that mobile payments would offer the agricultural sector in Colombia is not to need an associated bank account (though if any, it may be included).In addition, it is a faster and cheaper mechanism to send money, compared with the services of banks, the post offices and intercity bus drivers (Alonso, 2015).It additionally prevents the displacement of the rural population towards banks or offices and so: reduces environmental impact -0.4 megatons less carbon emission by 2020 from the reduction in travel; saves time and money; allows people to focus on production and therefore on the profitability of their business (Kirk et al., 2011).
The agricultural scenario presents a great opportunity for all entities involved in mobile payments.Large buyers of commodities would reduce the complex and costly security, maintaining records and administrative protocols and incidences of fraud related to cash payments to thousands or tens of thousands of farmers; and farmers would have greater security, because they would not have to carry large amounts of cash after selling their products.Additionally, a mobile wallet could offer them its first "financial identity", thus opening the opportunity of access to traditional financial services.
According to ISACA (2011), the arrival of payment using mobile devices presents a number of benefits, from both a business perspective and the prospect of the consumer, and includes: • Speed and comfort for the customer, not having to carry cash or use credit cards (something very beneficial in high-risk areas); • Coverage with a cost-effective appropriate relationship in rural areas where there is no financial institution operating.According to Ivatury and Mas a los caficultores cuentas de ahorros completas en dicho Banco, con todo ello, la Federación ha logrado ahorrar en más de siete años un aproximado de 15.5 millones de dólares por el uso de la cédula cafetera, cifra que corresponde a casi el 80% del costo de hacerlo con dinero en efectivo (Saving..., 2015).Una de las ventajas más relevantes que los pagos móviles ofrecerían al sector agrario en Colombia es el no necesitar de una cuenta asociada a un banco (aunque de existir, puede ser incluida).Además, es un mecanismo más rápido y económico de envío de dinero, en comparación con la oferta de las entidades bancarias, las oficinas postales y los conductores de buses intermunicipales (Alonso, 2015).Adicionalmente evita el desplazamiento de la población rural hacia bancos u oficinas y así: reduce el impacto ambiental -0.4 megatoneladas menos de emisiones de carbono para 2020, a partir de la reducción en los viajes; ahorra tiempo y dinero; y facilita a las personas enfocarse en la producción y, por ende, en la rentabilidad de su negocio (Kirk et al., 2011).
• Opportunity to access much of the world's population without major investments in technology, because mobile phones are more widespread than bank accounts, particularly in rural areas.
• Opening the market to professionals and traders in smaller sectors that do not possess POS (point of sale); the phone is a cheaper alternative than investing in hardware to accept electronic payments.
Given that agriculture is usually the most important source of employment in rural areas, the implementation of mobile payments in this sector would allow the deployment of the full potential that this service has to offer, thus obtaining for the base of the pyramid what commercial banks provided in the industrial revolution.
Thanks to draft legislation for financial inclusion ("Pague digital"), all Colombians can make digital transactions without having a savings account or being credit users, and these can be done with easier terms, safely and at a lower cost.Even 'micro-transactions' (less than 10 thousand Colombian pesos, which is less than US $4) can be made, reducing the massive use of cash (Ahora el efectivo..., 2014).It is anticipated that with this, most transactions in Colombia will be materialized through electronic channels, relegating cash to second place (Antes de..., 2014).
In 2014 e-commerce in Colombia grew above estimates and reached a record figure in terms of transactions, and according to PayU Latam showed an increase of 41.3% (Comercio electrónico..., 2015); i.e., in 2014 e-commerce achieved operations worth nearly 3,500 million dollars, a figure more than 1,000 million dollars more than that registered in 2013.

III. Alternatives
Mobile payments according to the pay base One of the main problems facing mobile payments is the decision about which entity will provide support for the financial infrastructure: the bank, mobile operator, another private / public company or a consortium.There are four models available for m-payments solutions, according to the basis of payment: bank account, credit card, billing by the mobile network operator and prepaid electronic money.
de pagos móviles en ese sector permitiría el despliegue de todo el potencial que este servicio tiene para ofrecer, y con ello haría por la base de la pirámide lo que hizo la banca comercial por la revolución industrial.

Mobile payments according to the operation
According to Amit, Hiren, Kevin, and Kai ( 2004), mainly the mobile payment service is offered considering the following four models: • Collaborative: the banks, mobile operators and a trusted third party cooperate for the provision of a mobile payment service, including the issuing of co-branded devices to ensure customer loyalty.
• P2P: a private or public institution or a company, independent of the financial institutions and mobile network operators, is the provider of mobile payment services.
• Operator-centric: the service is offered through a mobile network operator (MNO), which can provide an independent mobile wallet, cash or electronic money stored in the SIM or on an internal crypto-chip or in a software application.
• Centered on the bank: mobile applications or devices are supplied by a bank to customers for the realization of mobile payment transactions.The bank also offers POS to merchants, and mobile network operators are used as simple bearers or device vendors.

Mobile payments according to electronic money system
The mobile payment service may or may not include electronic money (also known as e-money, electronic currency, digital currency, and digital money).There are two types of electronic money systems: • Centralized: Electronic money is sold directly to the customer (e.g., PayPal, WebMoney, netCash.is,Payoneer, Cashu and private local systems of the US army).

Mobile payments according to the execution of transactions
Independently of the payment services models adopted by the provider, there are four main models for the implementation of mobile payment transactions: SMS-based; using the mobile phone bill; through a browser, HTTP with security layers; and contactless.
• Pagos on-line: las acciones de pago y depósito se ejecutan al mismo tiempo, ya que la conexión obliga y permite la comprobación de la validez de los fondos monetarios para la realización de la transferencia; una de sus grandes ventajas es la eliminación del problema de duplicación de un mismo gasto [double-spending], debido a que es posible pasar una señal digital dos veces, pero genera más tráfico en la red.• Pagos off-line: una muy buena opción para contextos en donde la conexión a la red no siempre se garantiza o donde no se puede manejar mucho tráfico en la red; requiere de mecanismos más robustos para la detección del double-spending, ya que la transacción se verifica en el momento en que hay conexión, un problema que se puede superar utilizando mecanismos de trazabilidad que permitan detectar quién ha realizado una transacción fraudulenta.

IV. Consideraciones
Con base en las funcionalidades de los sistemas de pagos que han sido objeto de estudio, se propone una arquitectura propia en donde el sistema debe cumplir con las siguientes consideraciones: • permitir llevar a cabo una transferencia exista o no co-• On-line payments: combine payments and deposits, running at the same time, because the connection requires and allows verification of the validity of monetary funds for the completion of the transfer; one of its great advantages is the elimination of the problem of duplication of spending [double-spending] due to it being possible to send a digital signal twice, which generates more network traffic.
• Off-line payments: a very good option for environments where the network connection is not always guaranteed or which cannot handle much traffic on the network; it requires more robust mechanisms for the detection of double-spending, as the transaction is verified when there is a connection, a problem that can be overcome using traceability mechanisms to detect anyone who has made a fraudulent transaction.

IV. Considerations
Based on the features of the payment systems that have been studied, an architecture in which the system must meet the following considerations is proposed: • To allow a transfer to be carried, whether or not there is Internet connection, which enables people located in areas without Internet access to make payments without resorting to cash; • Not to depend on banks or telecommunications, so as to prevent the interests of third parties that restrict the exploitation of the large potential it can offer the system; • Electronic money is sold directly to the customer or through a third party.Expanding the points of sale of electronic money allows the use of mobile payments to be expanded to remote areas or areas with difficult access, thus reaching a larger number of users; and • Execute transactions using NFC technology -that, being easy for users to learn, facilitates their inclusion-and secure HTTP protocol to connect to the server -to protect the information exchanged between the server and the mobile application.
With the above considerations and the parameters presented in Table 1, the system is characterized as: • Pay base: prepaid electronic money; • Operation of payment: P2P model; • Electronic money system: centralized and decentralized; • Execution model of mobile payments: contactless using NFC; and • Connection type: on-line and off-line.

Functions
The basic functions that the mobile payments system must provide are: • Load money into the system: the money circulating in the system must be supported in some way, so there must be a method of changing from physical to electronic money.
• System withdrawal: the system must allow conversion from electronic to physical money.
• Transfer of money between user accounts: the system, as the main feature, must allow the allocation of an amount from one account to another.

Roles of the system
• Administrator: has permission to manage the agents of the system.
• Agent: has the role of depositing or withdrawing money from the payment systems.
• Normal user or client: all those who have the ability to transfer money from one account to another.

Use case diagram
Taking into account the existing roles in the system and functional and nonfunctional requirements, a general use case diagram of the system has been designed (Figure 2).

Architecture pattern
The availability of an Internet connection is an important factor to consider in a payment system that seeks to work anywhere and anytime, so it has been chosen to work on a pattern of a semi-distributed architecture.

Patrón de arquitectura
La disponibilidad de conexión a Internet es un factor importante a considerar en un sistema de pagos que pretenda funcionar en cualquier lugar y momento, por ello se ha optado por trabajar bajo un patrón de arquitectura semi-distribuido.Los dispositivos móviles con soporte NFC se sincronizan periódicamente con la base de datos central alojada en el servidor, de esta manera, se actualizan y verifican la información en el servidor y se mantiene una copia en los dispositivos móviles de la información de cada usuario.
Mobile devices with NFC support are periodically synchronized with the central database hosted on the server, and thereby update and verify the information on the server, while a copy of the information of each user remains in the mobile devices.

Evaluation proposal vs initial considerations
Table 2 presents the evaluation of the proposal front against the initial considerations that the system must fulfill.

Distinctive characteristics of the system
Table 3 summarizes the main distinctive characteristics of the system.

VI. Conclusions
The synergy in mobile payments today is due to several factors: the acceptability of payments using mobile devices; the Government's interest in financial inclusion-as evidenced in "Pague digital"; the convergence of services on mobile devices; and the development and implementation of NFC technology by big companies in payment systems.
Implementing a mobile payment system in rural areas positively promotes economic development, increases financial inclusion and business profitability, contributes to the reduction of environmental pollution and reduces the security risk associated with the use of cash.
The proposed system is designed mainly to be used in enabled devices with NFC technology, but it could serve as a basis for the construction of an alternative solution based on other technologies to make the system more affordable.Evaluación de la propuesta frente a consideraciones iniciales La Tabla 2 presenta la evaluación de la propuesta frente a las consideraciones inicia Características diferenciadoras del sistema La Tabla 3 resume las principales características diferenciadoras del sistema.

Table 2 .
Evaluation of the proposed architecture / Tabla 2. Evaluación de la arquitectura propuesta