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The Green Sheet Online Edition

April 13, 2015 • Issue 15:04:01

Readers Speak

What is HCE?

I've heard talk about HCE. I know it has to do with mobile payments, but that's about all. How important is it?

Sherri Dogral, Merchant Level Salesperson

Sherri,

HCE stands for host card emulation, which is a relatively new type of software architecture that can be used to implement near field communication (NFC) payments. It is an on-device technology that permits a phone to perform card emulation on an NFC-enabled device without relying on access to a secure element. At this time, card emulation technology is more widely supported than HCE, but it requires accessing a device's secure element.

NFC is gaining traction in the mobile payments realm. And HCE received a big boost in 2013 when Google Inc. decided to support the technology in its KitKat OS. "Suddenly with host card emulation and cloud issuance millions of phones could be enabled for payment with a simple app update; a real game changer," wrote Kaushik Roy in The Sequent Blog (www.sequent.com/host-card-emulation). "It is no coincidence that Visa and MasterCard announced work on HCE specifications this year as well.

This innovation opened an alternative path to contactless payments and other services that had no reliance on secure elements."

On a web page introducing its white paper Host Card Emulation 101, the Smart Card Alliance wrote, "Along with the greater flexibility HCE offers for service providers and issuers, comes advantages and trade-offs to the traditional secure element-based model and accompanying (required) ecosystem.  Some advantages include more direct control and fewer dependencies on other ecosystem players.  Some disadvantages include a less secure implementation and, possibly, a degraded end user experience in some cases.  The list of advantages and trade-offs will change as more HCE-based solutions are deployed, tested and used in commercial practice."

The paper is available for download at www.smartcardalliance.org/publications-host-card-emulation-101/.

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