Host Card Emulation (HCE) enables NFC-based transactions by allowing mobile devices to mimic payment cards without relying on a physical secure element (SE) embedded in the device. This cloud-based approach simplifies mobile payment services, reduces complexity and costs, and allows application issuers to manage their apps directly. HCE enhances user experience, provides greater processing power for risk management, and enables instant fraud detection.

1. What is Host Card Emulation (HCE)?

2. Android KitKat 4.4 enables
NFC-based transactions through
host card emulation (HCE).

3. First, what is card emulation?

4. Card emulation allows a mobile
device to mimic a payments card.

5. In essence, the device becomes
a contactless card.

6. This card can be used to make
purchases, display tickets and
present identification.

7. It transmits the data
received from the
terminal between
the NFC device to
the secure element
(SE).

8. The physical SE is embedded in
the phone or contained within
the SIM card/ UICC.

9. However, using a physical SE
for mobile payments has its
downsides:

10. 1. Complex business models are
required to gain access.

11. 2. This creates dependencies that
make it complex and expensive to
interact.

12. 3. Application issuers need
agreements with SE issuers who
need to connect with the mobile
handsets.

13. 4. Limited storage capacity of the
SE and processing speed.

14. HCE enables the SE to be placed
in a hosted cloud environment,
rather than the mobile device.

15. Service providers can take control
of their applications by insourcing
an SE in the Cloud platform:

16. 1. It eases the use of NFC mobile
payment services.

17. 2. Application issuers can provision
their apps directly to the device
without third party intervention.

18. 3. It shortens the value chain as
fewer parties need to be involved,
lowering provisioning costs.

19. 4. Direct access to the SE enables
instant fraud detection and allows
immediate blocking on apps.

20. 5. Greater processing power and
storage capacity that enables
more advanced risk management.

21. 6. Without intermediaries the gap
between application issuers and
consumers becomes smaller.

22. This results
in consistent
brand and user
experience
across all NFC
services.

23. Interested in host card emulation
and its influence on the industry?
Watch our video.

24. Bell ID Secure Element in the
Cloud.

25. With over 20 years of expertise, Bell ID is considered the world’s leading provider of
lifecycle management solutions for tokens (e.g. smart cards, mobile NFC phones)
deployed in single and multi-application programmes.
www.bellid.com
Andre Stoorvogel
Marketing Manager
a.stoorvogel@bellid.com