Welcome!

News Feed Item

Consult Hyperion and the GSMA Publish Report Contrasting HCE and SIM Secure Element Approaches to NFC Payments

Digital payments experts Consult Hyperion, in conjunction with the GSMA, today published a guide to help banks and mobile operators understand the Host Card Emulation (HCE) and SIM Secure Element approaches for NFC payments. The guide, “HCE and SIM Secure Element: It’s not Black and White”, follows the recent introduction of HCE into Android 4.4 (KitKat) and concludes that the SIM Secure Element and HCE approaches to NFC payments each offer important benefits for financial institutions. Further, they should not be viewed as mutually exclusive and a combination of the approaches may be appropriate for differing applications and markets.

“This paper provides a balanced analysis for financial institutions of HCE as an alternative proposition for NFC payments, alongside the existing SIM approach,” said Alex Sinclair, Chief Technology Officer, GSMA. “The recent inclusion of HCE into Android opens up the possibility of performing NFC payments without using a SIM Secure Element and HCE could also potentially remove complexity associated with SIM-based NFC payments. At the same time, SIM-based NFC offers a proven secure solution that is being commercially deployed today. The challenge for the mobile operator community is to simplify the provisioning process, further accelerating deployments of SIM-based NFC on a global basis.”

“MasterCard has been technology agnostic, enabling mobile payments in a way that allows current card accounts to be used seamlessly and securely from consumers’ favorite electronic devices,” said James Anderson, senior vice president of emerging payments, MasterCard. “We have deployed SIM and Secure Element-based solutions through partnerships with mobile network operators, OS providers and handset manufacturers, while recently adding support for cloud-based payments. This paper will help both the mobile and payments industries understand the strengths of each approach and allow them to choose the options that align with their business strategies.”

Report co-author Steve Pannifer, Head of Delivery at Consult Hyperion said: “The inclusion of HCE into Android has generated a lot of excitement that can only be good for NFC payments. This, combined with the efforts to streamline SIM Secure Element based NFC evident in many markets, will enable NFC payment products to be rolled out with renewed vigour. We hope that this paper will encourage banks and mobile operators to collaborate further in bringing NFC payments to the market. We believe the mobile operators have an important role to play, particularly in providing mobile security and authentication services that are paramount in any payments service.”

The guide shows that whilst HCE does indeed simplify some aspects of the NFC ecosystem by allowing mobile NFC payments to be performed without using a SIM Secure Element, this is only part of the landscape. HCE requires a new approach to security in terms of ecosystem integration, risk management and certification processes. In contrast, SIM Secure Element processes are well defined and mobile operators are actively working with the ecosystem to simplify them further.

The report examines the heritage of SIM-based NFC, the lessons learnt from the first deployments and the actions that have been taken to allow service providers to deploy secure, stable and proven mobile payment services at scale. The guide finds that whilst there is significant interest around HCE, the SIM Secure Element approach for mobile payments still has many complimentary advantages and it will be down to the banks to carefully review their needs in each of their operating markets.

“Both the People’s Bank of China (PBOC) and China UnionPay have released mobile payment specifications, which require a Secure Element to support NFC mobile payments, in order to provide a secure and reliable payment service. China UnionPay has worked very closely with Chinese operators on large-scale commercial NFC services based on the SIM as Secure Element. In conjunction, China UnionPay is working actively on a feasibility study of new technologies including HCE,” said Jiang Haijian, Deputy General Manager, Mobile Payment Dept., China UnionPay.

Consult Hyperion suggests that there are a number of key points for banks to consider as they plan mobile NFC payments:

  • Understand your local environment: The local conditions will play a big role in determining the best approach
  • Understand your target transactions: It is possible that HCE will be less suited to certain transaction types (e.g. offline, high value) than SIM Secure Element.
  • SIM Secure Element and HCE are not mutually exclusive: The most effective solutions over the medium term may be hybrid models where, for example, the SIM is used to address the security and authentication gaps in HCE.
  • Build flexibility into your strategy: There is likely to be considerable overlap between SIM Secure Element and HCE in terms of the systems and capabilities that are required
  • Collaborate with the industry: Until there is a level of standardisation around HCE, there remains the risk that banks could adopt solutions that are insufficiently flexible or lock the banks in.

David Baker, Head of the Card Innovation Payments Unit at the UK Card Association notes: “While Host Card Emulation has been hailed as a potential game changer for card-based NFC proximity payments, this report gives valuable advice and guidance on the issues the industry must address -- and highlights the real need for collaboration between ecosystem partners to ensure greater adoption of mobile payment services.”

The full report can be seen here

Note to Editors:

HCE is a recent feature of Android that allows an Android application to emulate a contactless card via the NFC interface of the handset; previously, this was reserved to applications stored in a secure chip or Secure Element, typically the SIM card, with similar security features as chip-and-PIN plastic cards. HCE opens the way to payment applications without a secure element, but such applications need to reach a satisfactory level of security. In order to achieve this, card schemes are developing a “tokenisation” approach, whereby the payment card identifier is replaced by a single use or limited use “token”. This reduces the impact of data breaches significantly: if a “token” is compromised it will have limited and possibly no value.

The guide was commissioned by the GSMA, 5 New Street Square, London, EC4A 3BF, United Kingdom. Any opinions, findings, and conclusions or recommendations expressed in the material are those of the author(s) and do not necessarily reflect those of the GSMA or its members.

About Consult Hyperion

Consult Hyperion is an independent information technology consultancy that has spent over two decades advising leading organisations around the world. Consult Hyperion helps these organisations to reap real benefits from technological change in the field of secure electronic transactions ranging from retail payments to mobile wallets to contactless transit ticketing. Consult Hyperion is uniquely qualified to advise on turning great business ideas into working systems that can help customers, and to evaluate new business concepts, develop new products and services from specification to customer roll-out, and to test and certify complex systems.

The four main sectors the company operates in are; financial services, with card schemes, banks, retailers and others; telecommunications and media, advising world leading companies; technology, to support some of the largest IT companies, and in the public sector and transit where projects include transit operators, government and law enforcement.

For more information visit Consult Hyperion, follow on Twitter @chyppings and keep up to date with the latest debate at Tomorrow’s Transactions Blog.

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators with more than 250 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
Some people worry that OpenStack is more flash then substance; however, for many customers this could not be farther from the truth. No other technology equalizes the playing field between vendors while giving your internal teams better access than ever to infrastructure when they need it. In his session at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will talk through some real-world OpenStack deployments and look into the ways this can benefit customers of all sizes....
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin, ...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...