Click here to close now.


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 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
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving t...
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).