SIM-based NFC payments to grow on the back of HCE - report

Monday 23 June 2014 13:00 CET | News

Future growth of the near field communication (NFC) ecosystem and NFC-based applications, resulting from host card emulation (HCE), is likely to expedite SIM-based NFC payment deployments and create opportunities for mobile network operators (MNOs) to ‘address the security and authentication gaps in HCE,’ a recent report reveals.

Following the recent publication of the Consult Hyperion/GSMA discussion paper ‘HCE and SIM Secure Element: It’s Not Black and White’, SIMalliance has highlighted in its report titled ‘Secure Element Deployment & Host Card Emulation’ that there is significant potential for HCE to drive growth across the entire NFC market, and that a future NFC landscape is set to consist of HCE and SE-based models, together with hybrid deployment models.

According to SIMalliance’s research, HCE promises to drive forward mass adoption of NFC services as it provides a speedier route to market and makes NFC more accessible to developers. So as consumer familiarity increases, demand for NFC SIM-based services is also set to grow. Yet as the recent Consult Hyperion/GSMA report indicates, there is an increasing acceptance that HCE will be best suited to certain types of low-value NFC applications. The security offered by a SE, particularly when distributing or managing valuable and/or sensitive credentials, continues to make it a necessary requirement in high value NFC service deployments.

The report also adds that the secure element (SE) is the most likely route to market for payment service providers (PSPs) who want to achieve an early mover status in the NFC payment space. This is because there is an established global infrastructure which makes secure SIM-based NFC payment service delivery possible, as 124 million NFC-enabled SIMs have already been shipped in the past three years. Moreover, the supporting infrastructure needed to access and manage NFC-enabled SIMs ‘over the air’ is also in place.

The study finally points out that even when a PSP opts for a HCE-tokenisation approach to NFC payments, there is still a valuable role for the MNO’s SE (SIM) to play.

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Keywords: SIM, NFC, payments , HCE, MNOs, SIMalliance, SE, PSPs, Near Field Communication, Host Card Emulation, mobile network operators, secure element
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce