Host Card Emulation (HCE) and digital issuance can finally give banks the scale they need. Thus far, bank rollouts of mobile payment and wallet services have been hindered by multiple factors from the dependency on the secure element owner, the inability to deploy wallet services across multiple mobile phone operators, to the availability of Near Field Communication (NFC)-enabled devices.
But things have changed drastically in the last several months. Digital issuance of payment cards and transacting using Host Card Emulation technology frees banks to deploy mobile payment services that are flexible and easy to scale.
With cloud digital issuance and Host Care Emulation, banks control their own destiny for mobile payments. And, as new technologies become available, it becomes part of the overall mobile payment rollout. Banks achieve scale in the following ways:
- Device scale – Host Card Emulation support is present on all Google phones using KitKat 4.4, as well as Blackberry, and soon Windows phones. For those devices that do not support NFC, payment via QR code is a great option and is supported in the roadmap of the major card networks.
- Architecture scale (i.e. future proof) – The broader mandate of cloud issuance stated by the card associations and EMVco is to enable both proximity and remote payments securely. Cloud issuance and Host Card Emulation architecture leveraging tokenization is designed to address both use cases. Tokenization lays the foundation for a unified proximity and remote payment architecture whose impact on payment is as ground-breaking as the cloud delivery model was on IT. More on this topic will follow.
- Redemption scale – Notwithstanding the rapid growth of NFC-enabled POS devices, cloud issuance enables QR codes or any form of technology that bridges the last few centimeters (i.e. communication between phone and reader). This will allow banks to deliver mobile payment services on all devices leveraging existing redemption methods.
Bottom line is that Host Card Emulation will give banks the freedom to choose partners, deployment options, and devices from a much greater range of possibilities. Indeed, greater choice in key components will create winning consumer mobile wallet and mobile payments services.