Future growth of the near field communication (NFC) ecosystem and NFC-based applications, resulting from host card emulation (HCE), is set to accelerate SIM-based NFC payment deployments and create opportunities for mobile network operators (MBO), according to SIMalliance.
SIMalliance is a global, non-profit industry association which simplifies secure element (SE) implementation to drive developments in secure mobile services. Its membership comprises 86% of the global SIM card market.
“SIMalliance recognises that a future NFC landscape will consist of HCE and SE-based models, together with hybrid deployment models,” said Frédéric Vasnier, SIMalliance chairman. “Importantly, there is consensus within our membership that this is a real opportunity for growth in the SE market; we believe this for a number of reasons.”
“Firstly, HCE promises to drive forward mass adoption of NFC services as it offers a speedier route to market and makes NFC more accessible and versatile to developers. So as consumer familiarity increases, demand for NFC SIM-based services will also grow.
“Yet as the recent Consult Hyperion/GSM Association report indicates, there is an increasing acceptance that HCE will be best suited to certain types of low-value NFC applications. The enhanced security offered by a SE, particularly when distributing or managing valuable and/or sensitive credentials, continues to make it a necessary requirement in high value NFC service deployments.
“Secondly, the SE is the most likely route to market for payment service providers who want to achieve an early mover status in the NFC payment space. This is because there is an established global infrastructure which makes secure SIM-based NFC payment service delivery possible today; 124m NFC-enabled SIMs have already been shipped in the past three years. What’s more, the supporting infrastructure needed to access and manage NFC-enabled SIMs ‘over the air’ is also in place. Put simply, the foundation is already out there and ready for use.
“And finally, even when a payment service provider opts for a HCE-tokenisation approach to NFC payments, there is still a valuable role for the MNO’s SE (SIM) to play. For example: the user could authenticate to the token service provider using SE stored credentials; additionally, the risks introduced by storing tokens in a non-secure environment may be manageable for low value credentials, but are likely to be unacceptable when dealing with high value credentials, so the storage of tokens in a tamper resistant SE inevitably provides the most secure solution.
“In summary, there is significant potential for HCE to drive growth across the entire NFC market, and if that market consists of both HCE and SE-based NFC deployments, then that is certainly good news for the whole ecosystem.
The paper is available to download at http://www.simalliance.org/en/se/se_marketing/
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