Souped-up SIM allows mobile payments where there&#039;s no network
Mobile payments could soon be possible in areas where mobile phones can't make a connection, thanks to a project by DigiTally. Countries that lack traditional banking structures often also have patchy mobile coverage and this can impact mobile payment services such as M-Pesa, used by almost 20 million people for transactions via SMS. DigiTally uses thin, cheap electronics to stick a chip over a SIM card which can process transactions without the need for SMS. The sender and receiver swap eight-digit codes and if the codes match the payment is authorised. Trials in Kenya have been successful.
Another way to pay Noor Khamis/Reuters

Money may soon become even more mobile. A fresh project allows people to make mobile payments even in areas where their cellphone is unable to connect to a network.

The DigiTally project could benefit people in countries that lack traditional banking infrastructure. Such countries also often have spotty cellphone coverage, and this can limit the impact of mobile payment services such as M-Pesa, which enables transactions via SMS messaging. Nearly 20 million people rely on M-Pesa in Kenya alone, with millions more in other countries from Romania to Afghanistan.

Many of the world’s poorest people don’t have much access to mobile payment systems, says Ross Anderson, a computer scientist at the University of Cambridge who runs the project, “because the GSM network near them is ropy or non-existent”.

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Anderson and his team want to extend mobile payments to these communities, as well as other areas without a mobile service, such as islands, mountains and deserts. They also want the system to work without technologies such as Bluetooth or near-field communication, so it could be used with even the simplest feature phones.

Chip device

DigiTally achieves this by using thin, cheap electronics that can be stuck over existing SIM cards and inserted into phones. This device contains a chip that can process and authenticate transactions without the need to use SMS messaging.

To transfer money from one phone to another, the sender and receiver swap eight-digit codes generated by the overlay device. Each plugs the other’s code into their own device to confirm they are happy with the transaction. If both codes match, the payment is authorised. When the phones next connect to the network, their transaction history is uploaded to the servers of the mobile payment system used.

In September, Anderson’s team trialled DigiTally for a week in Nairobi, Kenya, at a bookshop, two coffee shops and a university canteen. Anderson says that even with the extra bother of validating codes, the system was welcomed in the busy environment of the cafe because it was faster than waiting for an SMS to travel over the network to confirm a normal M-Pesa transaction.

Anderson says that DigiTally will be made available on an open-source basis in early 2017. He presented the project at the Conference on Computer and Communications Security in Vienna, Austria, last week.