What is Host Card Emulation (HCE)? What you need to know.

Making financial transactions using mobile devices is considered to be the next break through in payment. NFC or Near Field Communication was designed and developed to make mobile transactions simple, secure and faster. But NFC dint quite take off as expected due to high cost of infrastructure required to implement this form of mobile payment. Here is when HCE comes into play.

The beginning
HCE was a term created by the founders of SimplyTapp, Doug Yeager and Ted Fifelski, in 2011 to describe the ability to transact with remotely operated smart cards.  They launched their Tapp Near Field Communication payment wallet for the CyanogenMod Android community.

What does it do
In Layman terms, HCE is a technology built into the mobile operating system which is the virtual representation of a smart card using only software. It allows a mobile device to emulate a NFC card to make NFC payments. The benefit of this being the transaction credentials no longer required to be stored within the device, but instead get hosted remotely in the cloud. With HCE, any application on an Android 4.4 device can emulate an NFC smart card, letting users tap to initiate transactions with an app of their choice.

Android and HCE
Since the release of Android 4.4 version, Google has implemented HCE within the Android operating system. Google introduced a new platform support for secure NFC-based transactions through Host Card Emulation (HCE), for payments, loyalty programs, card access, transit passes, and other custom services. With HCE, any app on an Android 4.4 device can emulate an NFC smart card, letting users tap to initiate transactions with an app of their choice. Apps can also use a new Reader Mode so as to act as readers for HCE cards and other NFC-based transactions.

What does this mean
This means that HCE is no a viable alternative to thousands of card emulation projects since no physical secure element is required in the device. This offers more control to the application issuers. Service providers have more business model and partners to work with.

Early Adopters
UKraine's PrivatBank is to launch a cloud based NFC payments service using HCE. The new application namely LiqPay will be available to customers with NFC smartphones running Android 4.4. They will be able to link any Master Card or Visa card to the app to fund payments and make purchases with the tap of their phone at any MasterPass terminal.

Break free with HCE
HCE is the magic that has helped breaking Google Wallet free from carriers and their control over your phone’s secure element. That really gave Wallet the freedom to expand.

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