Visa and MasterCard are pushing forward with NFC based payments by utilizing Host Card Emulation (HCE).
Until recently, NFC based transactions were dependent on carrier support. A secure element located on a smartphone was required to store card data. With Google’s latest iteration of its mobile operating system, Android 4.4 KitKat, there is no longer a need for a physical secure element to be located on the device. With no need for a secure element any NFC powered device running Android 4.4 or higher can place mobile payments regardless of carrier and manufacturer restrictions.
Visa recently announced they are planning on incorporating cloud based NFC payments with Visa payWave, Visa’s contactless payment feature, by using HCE.
“Our clients and partners around the globe are continuously looking for flexible, cost efficient and secure ways to enable mobile payments. The Android HCE feature provides us with a platform to evolve the Visa payWave standard, support the development of secure, cloud-based mobile applications, while at the same time offer greater choice to our clients,” said Elizabeth Buse, Executive Vice President, Global Solutions, Visa Inc.
MasterCard has announced they plan to reveal its future plans for HCE utilization before July 2014. Currently, BlackBerry has also integrated HCE features in its smartphones running the BlackBerry 10 operating system. With Android and BlackBerry taking advantage of the new open NFC payment feature, we are left wondering how Apple plans to combat them with its future payment platform.
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Until the introduction of HCE, service carriers would limit the use of the secure element to either not allow contactless payments, or force users to use the payment service provided by the carriers themselves. Google Wallet, one of the first NFC based payment platforms suffered due to these restrictions, and is the main reason why they have decided to offer HCE on all devices running Android 4.4.
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