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Payment with Bluetooth LE at POS

Yaser Tawash, Computer Information Science

Chestnut Hill College

Payment with Bluetooth Low Energy

Bluetooth Low Energy (BLE)

Bluetooth Smart, or BLE, is the intelligent, power-friendly version of Bluetooth wireless technology that was designed and marketed by the not-for-profit non-stock corporation Bluetooth Special Interest Group (SIG).  While the power-efficiency of Bluetooth Smart makes it perfect for devices needing to run off a tiny battery for long periods, the magic of Bluetooth Smart is its ability to work with an application on the smartphone or tablet you already own. Bluetooth Smart makes it easy for developers and OEMs to create solutions that will work with the billions of Bluetooth enabled products already in the market today. (Bluetooth)

Beacons

Bluetooth beacons are devices that broadcast signals that can be heard by smart devices nearby. iBeacon is the name for Apple’s technology standard, which allows Mobile Apps (running on both iOS and Android devices) to listen for signals from beacons in the physical world and react accordingly. IBeacon technology allows Mobile Apps to understand their position and can deliver contextually relevant content and information to users at very specific locations. The underlying communication technology is Bluetooth Low Energy.

(iBeacon Insider)

Bluetooth Low Energy & Regular Bluetooth

The main differences between BLE and the regular Bluetooth are Power, Cost and Application. The power consummation, or efficiency, in Bluetooth LE is more reliable. In fact, the BLE can last up to 3 years on a single coin cell battery. BLE cost is 60-80% cheaper than the traditional Bluetooth. BLE real life application is ideal for simple applications requiring small periodic transfer of data. On the other hand, regular Bluetooth is preferred for more complex requiring consistent communication and more data throughout. (iBeacon Insider)

Bluetooth Low Energy Communication

The BLE communications process relies on two profiles: the generic access profile (GAP) and the generic attribute profile (GATT). The GAP controls connections and advertising. The GATT defines how two BLE devices exchange data. Also, BLE communication consists primarily of advertisements, or small packets of data, broadcast at a regular interval by Beacons or other BLE-enabled devices via radio waves. Beacons that want to be “discovered” can broadcast, or “Advertise” self-contained packets of data in set intervals. These packets are meant to be collected by devices like smartphones, where they can be used for a variety of smartphone applications to trigger things like push messages, app actions, and prompts. Standard BLE has a broadcast range of up to 100 meters, which make Beacons ideal for indoor location tracking and awareness. (Smart Card Alliance, 2014)

iBeacon usage of BLE Communication. With iBeacon, Apple has standardized the format for BLE Advertising. Under this format, an advertising packet consists of four main pieces of information which are, UUID, Major, Minor, and TX Power.

UUID. UUID is a 16-byte string used to differentiate a large group of related beacons. For example, if Coca-Cola maintained a network of beacons in a chain of grocery stores, all Coca-Cola beacons would share the same UUID. This allows Coca-Cola’s dedicated smartphone app to know which beacon advertisements come from Coca-Cola-owned beacons.

Major. Major is a 2-byte string used to distinguish a smaller subset of beacons within the larger group. For example, if Coca-Cola had four beacons in a grocery store, all four would have the same Major. This allows Coca-Cola to know exactly which store its customer is in.

Minor. Minor is a 2-byte string meant to identify individual beacons. Keeping with the Coca-Cola example, a beacon at the front of the store would have its own unique Minor. This allows Coca-Cola’s dedicated app to know exactly where the customer is in the store.

TX Power. TX Power is used to determine proximity (distance) from the beacon. TX power is defined as the strength of the signal exactly 1 meter from the device. This must be calibrated and hard coded in advance. Devices can then use this as a baseline to give a rough distance estimate.  (iBeacon Insider)

BLE Use Cases

BLE’s proximity detection capability offers multiple advantages. First, improved operational efficiency for targeted promotions and information, which reduces the cost of marketing and customer service. Second, A more positive customer engagement. Third, the opportunity for managers to capture and analyze data on how customers behave and adjust digital content and the physical environment accordingly. Last, the opportunity for creating innovative check-out and payment processes. These advantages rely on knowing customers and customers’ current locations. The use of proximity beacons is an important part of contextual awareness.

BLE in Retail. BLE can be used by retailers to provide advertising, offers, coupons, product information, and other services when consumers approach a store’s entrance, upon entry, or within areas in a store. BLE beacons can also help retailers track where consumers go (with or without consumer interaction), allowing the retailer to optimize merchandise placement.

(Smart Card Alliance, 2014)

Payments Use Cases. The potential use of BLE for payment applications has generated considerable interest since a wide variety of mobile devices are expected to support BLE.

For payment at a physical merchant, the customer’s payment account information must be stored securely, be easily available for use at the point-of-sale or during the payment process, and be communicated to the merchant to complete the transaction. (Smart Card Alliance, 2014)

When using a physical payment card, the payment account information is stored on the card, which is inserted, tapped or swiped at a merchant POS terminal. For mobile payments, the payment account information may be stored on the mobile device in a physical secure element or in device memory or in the cloud. Communication with the merchant POS can take place through radio frequency, with a POS system that has been enabled with BLE or NFC, or via the host server for a remote mobile payment transaction. (Smart Card Alliance, 2014)

BLE Security

Apple and PayPal have successfully demonstrated how BLE enables a mobile phone to discover and interact with objects in its direct vicinity. When this interaction executes some form of transaction, security must be considered. (Smart Card Alliance, 2014)

As proximity payment technology has developed, one consistent design principle has been interoperability. In other words, the payments technology used by the one party must be able to communicate with the technology used by the other party in a transaction. Since in most cases the buyer and seller do not know each other or have never shared any secrets or credentials, the standards used for the infrastructure layer implements no authentication or encryption. (Smart Card Alliance, 2014)

Until BLE becomes available as a mainstream technology for payments, it is unclear how a BLE- enabled payment scheme will operate. Payment may rely on the same payment credentials used on, magnetic stripe, EMV chip, dual-interface chip, and contactless chip cards, as well as on NFC handsets. Or future BLE-based payment schemes may rely on a completely different approach, such as tokenized credentials, Public Key Infrastructure (PKI)-centric authentication, or native support for peer-to-peer transfers. Payment credentials may be stored in a physical secure element on the phone, or the implementation may resemble Host-based Card Emulation (HCE) implementations, in which a physical secure element is absent and credentials are stored in the cloud. (Smart Card Alliance, 2014)

Reference:

Bluetooth, how it works, retrieved from: https://www.bluetooth.com/what-is-bluetooth-technology/how-it-works/low-energy

iBeacon Insider, A guide to beacons, retrieved from: http://www.ibeacon.com/what-is-ibeacon-a-guide-to-beacons/

Smart Card Alliance (2014) Bluetooth Low Energy (BLE) 101: A Technology Primer with Example Use Cases. Smart Card Alliance. Retrieved from https://www.securetechalliance.org/smart-card-alliance-explores-opportunities-and-challenges-with-bluetooth-low-energy-ble-mobile-technology-in-new-white-paper-ble-101/