Mobile Payments Enabled by Host Card Emulation (HCE)

Mobile payment is a mode of payment using mobile phones. Instead of using cash, cheque or credit card, a customer can use mobile phone to transfer money or pay for goods and services.

Traditionally mobile payment requires you to store your debit or credit card’s security information on a chip known as Secure Element (SE)on your mobile phone. Since the Secure Element is under carrier control, carriers have limited what apps can access it. Choosing to accept the security risk and avoid using SE was not possible previously.

Visa and MasterCard are trying to make mobile payments a lot more accessible today as they have both announced support for a new way to pay over NFC.This new process called Host Card Emulation (HCE) is supported by both Android KitKat and BlackBerry 10. Users can just tap their phones to initiate transactions with an app of their choice without a provisioned Secure Element in the device. HCE will allow for applications to access payment.

That’s potentially a really big change for mobile payments. Any app on a smartphone that supports the service should be able to act as a mobile wallet in the near future. This new method for payment will subvert restrictions from mobile carriers. More consumers can check out at stores by just tapping their smartphone to a reader. The device effectively becomes a contactless card that you can use to make purchases, display tickets and vouchers and present ID.

Google Wallet has been significantly limited because of carrier opposition. Once Visa and MasterCard enable HCE support, Google will be able to enable tap-to-pay for consumers who use their cards instead of resorting to inelegant workarounds. This is a fantastic development for business and for Android. Now you can create apps that leverage payment as well as loyalty. Customers will also be in control of the TSM and card provisioning. They can load any card they want. This change from SE or career control to HCE, means a brand new ecosystem for NFC that will have considerable implications for your services.

Exelanz Skills

Exelanz has a team of certified mobile developers (iOS, Android and Windows Phone) having over 6+ years of experience. We are working on a couple of large mobile payment projects for retail stores where customers can make payments using their smartphones. We are using NFC technology for this. With the support of Visa and Mastercard, HCE (Host Card Emulation) is going to be the next big thing, and we are already doing some pilot projects on the same.

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