How BPM Brings Order From Chaos in M-commerce

Shopping for gifts, groceries, and everything great and small is now not only 24/7, it's also mobile. The smartphone-as-a-wallet is rapidly changing the way we can pay for purchases: m-commerce (mobile commerce) has arrived. Sweet. I'm happy to not have to juggle a phone and a wallet everywhere. But when we process professionals take a look at this, what do we see behind the convenience? There are significant process challenges behind the app that allows us to pay with our phones. The purchase process needs to work—securely and simultaneously—with:

• many merchants;
• many credit cards (Visa, Mastercard, and so on);
• many different banking systems that issue these cards; and
• third-party processors (which are involved for legal reasons).

How to integrate all the different "business rules" imposed by these many systems? "When you have to have customized rules for every provider, things can get chaotic," says David Meyer, VP of Software Engineering with LoopPay, Inc. "That's where BPM comes in."

LoopPay, Inc. (known as Loop) provides advanced mobile point of sale (POS) and checkout solutions integrated with a mobile wallet. Its integrated solution includes mobile peripherals, mobile apps and cloud-based services for m-commerce. The platform behind the app allows consumers to make secure purchases using their smartphones, and allows merchants to easily promote deals and offers to their customers' mobile devices.?Let's have a look at the challenges of meeting the requirements of Loop's different end users-merchants, credit card providers and banks to serve shoppers as the company provides the back-end processing for credit card payments that consumers make on their phones.

A single secured transaction can be described simply: The merchant accepts a purchase, the customer pays by credit card, the card is read, and the transaction is recorded by the credit card provider.

But, of course, this is actually quite complex. The credit card company and the card-issuing bank each have their own processes to verify the consumer's card number and authorize the payment. Further, each different credit card company and each bank configures its processes differently. And although the Loop platform starts the payment processing, legal rules dictate that the company can't actually process the transaction. It hands the transaction off to a third-party processor, such as Litle & Co.

When a merchant accepts a customer's credit card number, the Loop system sends the number to the credit card issuer. This information is encrypted in a proprietary protocol and data format. It includes an IP address, to determine where the transaction is coming from, the amount, the merchant ID, and so on—all in a format specific to the provider. Each card issuer requires different information, in an entirely different format. Ten years ago, when Loop's predecessor company started accepting e-commerce merchant applications, the only technically feasible option was to create a back-end service that was essentially "hard-wired" for a single third-party processor. The service was written in Java code, and any changes required a major programming overhaul.?"Because the legacy stack was very cumbersome and hard to change, discussions with other processors were curtailed," Meyer says. "We lost some business because of it. It would have taken too much work to make the changes."

The challenge, then, was to entirely change the process approach. This meant changing to a more flexible business process management suite (BPMS) to manage the processes and create the applications, and build into the process the capability to apply different business rules for many different cases.?The advantage of using a process-based application connected to a business rules management system is quickly apparent. When business rules are managed externally, they can be modified in their host system (Drools, for example) without changing the core process.

Loop embarked on its plan at the end of 2011. They looked at two BPMSs—Bonitasoft's Bonita BPM and JBoss's jBPM. Both are built on open source technology and both offer scalable architectures. An internal team evaluated both in a two-week trial. "We had to get into production quickly, and the Bonitasoft solution was easy to implement," says Meyer. Specifically, the tool offered the means for programmers to develop and call different business rule-sets given the various combinations of merchants, card providers, banks and so forth that the various purchase cases present. Loop's current system was chosen for its graphic design modeling studio. Embedded in the design studio is the capability to define business rules. When the model is used to directly create the applications, the appropriate business rules are applied at each step of the process as needed for each case.

As Loop prepared to roll out its digital wallet and payment processes in the fall of 2013, Loop made extensive use of "connectors" to third-party information systems—starting with LDAP, database and Web services-and they plan to build some of their own connectors to specific custom systems used by some of the institutions involved. They have successfully created and deployed complex business rules, and have also modified existing rules for different processes.?The next goal, they say, will be to ensure seamless processes as the services scale up dramatically.

"The number one priority is scalability," Meyer said. "We expect to go viral. It will be a major victory for us, over the next six months, as we scale from 25 to 500,000 users. With the application of our BPM solution, I have no doubt we'll get there."

I'm glad I didn't actually have to think about this as I did all my holiday shopping this year. But it's fun to consider how BPM is making my smartphone...smarter.