Consult Hyperion on Host Card Emulation & other topics
Consult Hyperion, a consultancy that specialises in electronic transactions, has identified five key technology trends in digital commerce which featured at the recent MWC show in Barcelona. These include host-card emulation (HCE), tokenisation, wallets, MPOS and the fate of IDAP. GoMo News reckons that one of the sector’s major problems is that it is immersed in its own obscure TLAs [Three Letter Acronyms].
Host Card Emulation [HCE) allows any app on any NFC-enabled device running Android 4.4 – to emulate a contactless smartcard.
It lets users tap to initiate transactions with an app of their choice without needing a provisioned secure element (SE) in the device.
Apps can also use a new Reader Mode to act as readers for HCE cards and other NFC-based transactions.
The device effectively becomes a contactless card that you can use to make purchases, display tickets and vouchers and present ID.
Dave Birch, director of Consult Hyperion observes, “By removing the decision about whether a hardware Secure Element is placed on the SIM or the handset, HCE makes irrelevant the commercial negotiations previously needed for NFC to succeed.”
Tokenisation replaces the card PAN with one time use numbers that are valid for a short time only.
PAN (primary account number) truncation is a technology that prevents most of the digits in a credit card, debit card or bank account number from appearing on printed receipts issued to customers.
These tokens can be transmitted like regular PANs across existing bank networks but their short life span means that they pose little risk for security breaches.
They aren’t a new idea but now that they can be generated by mobile apps, customer usability issues are no longer a problem.
“One day soon, my Waitrose app will obtain tokens from my V.Me wallet, my MasterPass wallet, my PingIt app, my Zapp app and any other wallets it can find on my phone through a standard discovery process and standard API,” predicts Birch.
“Then when I check out at Waitrose, my app will pop up and take care of business .”
“For us, the wallet is something that lies under and inside a variety of apps, providing them with services such as identity,” says Birch. “We like to call this the hyper-wallet.”
There’s a marketing fundamental – identify the need. Barclays’ PingIt has already done that with person to person payments.
Easy online payments from the phone might be another area as might be managing electronic receipts.
If wallets are intended to make shopping more rewarding for consumers, it’s MPOS that carries out the same function for retailers.
Not just conventional POS devices that have been untethered but mobile phones and tablets with added card interfaces, MPOS devices run apps and communicate with consumer mobile devices.
2014 will see them become more prevalent in retailers of all sizes, reducing the need to queue to pay and accentuating customer relationships over payments.
The more consumers want to pay by phone, the less they will want to queue to hand over old fashioned payment cards at the point of sale.
Higher assurance federated identity models, such as IDAP, the UK government’s identity assurance programme; NSTIC, the USA’s National Strategy for Trusted Identities in Cyberspace; and Assure UK (the new name for the OIX/GSMA initiative) all allow consumers to gain higher assurance identities to provide more convenient access to higher value services, for which social logon (e.g. Facebook Connect) is not good enough.
“2014 will be the crunch time for IDAP,” says Birch. “The service is just going through the technical launch now and the Cabinet Office will be looking to onboard the first services and consumers during the year.”
While cost saving is the driver for the government, these programmes will also provide value to consumers and service providers: better ways to access more services, better engagement with the consumer in ways that the consumer will want.