Payment Broker Systems for e-Business growth.

Payment Broker Systems for e-Business growth.

Author: P. Abraham Paul.


3G and other New Generation Networks are great advancement in Information Communication Technology, but concepts alone cannot be sold and make money. It was difficult to make out a viable business case and many Telecom and Internet service providers broke down as their original business plans later turned un-sustainable. However, lately the business approach has been more pragmatic and realistic. The data communication merged with Internet even though not yet very user friendly, economic and fast in India, is nevertheless gaining acceptance for day-to-day business and personal needs. Realization has happened though late, and for a year or so now, the approach has been more pragmatic and realistic.

Introduce Payment Gateways in PDN for revenue appropriation:

The vast amount of individual and standalone e-business units and service related applications widely spread beyond the boundaries of Network operators licensed area, are to be taken care of by large number of Service Providers and Business units in the PDN.  It is more likely that the Network operators also will prefer to hand over the Application business to external Service providers.

To be in line with technology advancements, the network operators have no choice but to induct the new technology systems in their networks and find means and ways to ensure sensible business propositions and viability.  As the data related services become predominant, and the revenue potential moves from Network Operators/ISPs to Service Providers and e-Business units, the Network operators/ISPs have to look for methods to grab their share of revenue generated in the PDN to survive.  Here is the emphasis of the Payment Broker systems, which manage the accounting of payments, apportioning of it and sharing the revenue generated between the stakeholders.

Special methods are needed to handle Micro-payments involved in e-business.

The e-business and e-services related to 2.5G, 3G, and Data services directly or over Internet involve High Volume of Low Value payments. Collection of these payments cannot be done by the Network operators/ISPs, as only the e-Business/Service provider who finally sell or provide the service knows the value of each transaction. It is not practical for the Network Operators to have tie up with infinite number of Service Providers in PDN.  The Service provider/e-business units also cannot realize these small value payment collections economically using the banks, regular credit card companies etc.

This is the most critical issue and the high tech telecom and IP related e-Business cannot take off and the Network Operators/ISPs and the Data Application Service Providers cannot hold on with sustainable business plans until this issue is addressed and resolved. Micro-payment Gateways as Payment Broker Systems in PDN is one such idea to handle the micro-payments for the Service Providers in PDN and for the Network Operators/ ISPs get back part of the revenue generated from e-business based on data services.

e) Role of regulators.

These issues need coordinated efforts by all stakeholders and the regulators.  It shall be possible to address this by introducing concept of Payment Gateways in PDN for apportioning the revenue. Micro-payment gateways can take care of the high volume low value transactions that happen in the PDN. These need special methodology and coordinated efforts of all concerned. The payment broker system cannot be managed by individual Network operators/ISPs as the Service Providers and e-business units are common platforms shared by customers of many different Networks/ ISPs.


With right perception and direction, the hurdles can be overcome and the e-Business will see ample growth in the coming years. It shall be possible to realize that Telecom and Data oriented Services are mutually supportive to achieve quick overall growth in Information Communication technology, with benefits for all, the Network Operators/ISPs, Business owners, the Service providers, the Telecom Vendors and the Consumers as end users.

Also please see: “Impact of Transition from Voice to Data”

———————————————————————–Abbreviations used:

GSM Global System for Mobile   Communication
GPRS General packet Radio service
HLR Home Location Register
IMSI International Mobile Subscriber Identity
IP Internet Protocol
ISP Internet Service Provider
MS Mobile Subscriber
MSC Mobile Services Switching Center
PCO Public Call Office
PDNPLMN Packet Data NetworkPublic Land Mobile Network
PSTN Public Switched Telephone Network
STP Signal Transfer Point
WAP Wireless Application Protocol
SMS Short Message Service
UMTS Universal Mobile Telecommunication System

About Abraham Paul

Vision & Objective: Telecom has always been the passion of my life. After 60 years of outstanding career and many personal contributions to the industry, I still have same urge, and desire to give back to the industry, the abundant experience, knowledge and potential acquired, by providing consultancy service to forward looking enterprises and entrepreneurs in Legacy and New generation Telecom & IT in the areas of Business Management, Technology, Engineering and Services. Apolitical and religiously unbiased.
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