Banks warm to HCE, but remain wary

Banks weigh security, usability, and cost when selecting third-party support for host-card emulation adoption, says Mobey Forum in a new white paper.

Almost 70% of respondents to survey sponsored by the global association are keen to outsource some or all of any future HCE solution to third-party providers. HCE is the presentation of a virtual and exact representation of a smart card using only software.

“HCE has the potential to fundamentally change the layout of the mobile payments landscape, but it comes with its own complexities,” says Zaf Kazmi, chair of the Mobey Forum’s HCE Workgroup and head of Mobile Payments and Commerce at Spain’s CaixaBank. “Some financial institutions are attracted by HCE, others will continue to place their faith in traditional secure elements, and some will seek to use a mixture of the two. Understanding the market dynamics and key control points will be essential to success.”

In addition to the proprietary research, the paper also presents a history of HCE and explains its position as an alternative to traditional near field communication payments.

“HCE is a shot in the arm for the slow-moving NFC payments industry so, in this paper, we have outlined the pros and cons together with business model analysis, enabling banks and other institutions to make more informed decisions,” says Kristian Thure Sørensen, member of the organization’s HCE Working Group and senior manager, Corporate Strategy at NETS, the Nordic payments provider. “HCE does resolve some of the deployment ecosystem’s complexity, but it also generates some of its own.”

Download Mobey Forum’s “Host Card Emulation in Payments: Options for Financial Institutions” [Registration required]