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Visa, MasterCard back HCE for NFC-based mobile payments


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Richard Handford

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MasterCard and Visa are supporting host card emulation (HCE) which they say will drive the take-up of NFC-based services on mobile devices, including payments.

HCE enables payments and other NFC-based services to bypass the mobile operator-controlled secure element, or SE.

Both credit card giants said they are at work on standards-making initiatives on HCE.

“It opens the ecosystem for app developers,” Sam Schrauger, Visa’s SVP, digital for developed markets, told Mobile World Live, who predicted “pretty interesting use cases” being opened up.

Typically they involve adding a payments feature to an app with a broader capability. Schrauger mentioned banks adding NFC-based payments to an app which typically offer balance checking or transferring sums between accounts. Or a fast food restaurant which integrates payments with a mobile ordering feature on its app.

“Payment information is implemented in [app] software so no need to get payment information into the secure element,” he said.

MasterCard is to publish a spec developed over the past year initially with Capital One in the US and then with Banco Sabadell in Europe

The credit card firm also stressed its “longstanding support” for embedded and SIM-based SE implementations.

Supporters say HCE, which was adopted last year by the Android community, will rapidly boost the take-up of NFC by making it more attractive to developers. HCE enables any app on the latest version of Android 4.4 to emulate a NFC smart card. Schrauger did not believe Visa’s backing of HCE was bad for mobile operators since it made apps “stickier”.

“That’s good for MNOs, merchants and financial institutions,” he said.

The adoption of HCE in the latest version of Android laid the groundwork for the current announcements.

“The use of HCE provides a very attractive way forward to launch an increased number of NFC-based offerings,” said James Anderson, group head, emerging payments at MasterCard.

“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.

The credit card giant is extending its Visa Ready Program to support financial institutions and other partners who wish to deploy Visa accounts in the cloud. This process will involve new standards, tools, service and implementation guidelines.

For example, Visa has enhanced its payWave contactless payment app and is introducing a new standard, requirements, program approval process and implementation guidelines to enable financial institutions to securely host Visa accounts in a virtual cloud.

The initial Visa payWave standard for cloud-based deployment is available now. Future versions of the Visa payWave standard will add support for QR codes and in-app payments.

Visa is developing a new service and platform that will enable clients and partners to issue Visa accounts digitally in the cloud, on secure elements in smartphones, or linked to a digital wallet.

The solution will also enable the issuance of payment tokens to replace the 16-digit payment account number and can be limited for use with a specific device, payment channel or merchant.

In addition to payments, supporters said HCE encourages developers to create NFC-based apps for loyalty programmes and transit passes.

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