The emergence of HCE as a viable NFC payment model has generated new excitement throughout the NFC ecosystem. The NFC Forum, which supports HCE through its NFC Controller Interface (NCI) specification and ISO 14443 and JIS X 6319-4 industry standards, believes that more implementations mean greater choice for NFC solutions providers. In this presentation, Paula Hunter, Executive Director from the NFC Forum, outlines the impact HCE is expected to have on the NFC ecosystem and NFC adoption, and presents HCE use cases. In addition, she explains the key role NFC’s other operating modes — peer-to-peer and read/write — will have in helping to drive growth in all forms of NFC payment.

1. THE IMPACT OF HCE ON NFC ADOPTION
Paula Hunter
NFC Forum Executive Director
HCE Summit 2015
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2. NFC FORUM MISSION
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 Develop standards-based NFC specifications
 Encourage the development of products based on NFC Forum specifications
 Work to ensure that products claiming NFC capabilities comply with NFC Forum specifications
 Educate consumers and enterprises globally about NFC
Specifications &
Application Documents
Compliance Branding

3. THE NFC ECOSYSTEM
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4. NFC OPERATES IN 3 MODES
Card Emulation
4
Tag/Card Reader/Writer
Connect the world of
apps with the physical
world
Connect devices through
physical proximity
Connect to a common
infrastructure …3
2
1
Peer to Peer

5. USE CASE MATURITY OF 3 MODES
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RW Mode
Bluetooth・WiFi connection
Smart Poster
•No Legacy Infrastructure
•Ongoing market deployment
P2P Mode
Android Beam
•No Legacy Infrastructure
•Supported as OS functionality
Card Emulation mode
Payment
Transport (Public Transport/Airline)
•Interoperability with legacy
•Impact of Apple’s participation
Maturity of Mobile handset and POS terminal
• 1b NFC-enabled smartphones in the market by the
end of this year
• Major smartphone OS support NFC
• Further introduction of contactless POS

6. THE NFC FORUM ON HCE
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“We view HCE as an exciting development for the
NFC market because it provides an additional
means by which to perform NFC transactions.”
“HCE is a promising addition to the portfolio of
NFC solutions that could potentially accelerate
market growth.”

7. HOW THE NFC
FORUM ENABLES HCE
IMPLEMENTATIONS
• HCE is supported by NFC
Forum specifications
• The NCI specification enables
HCE in combination with
other standards, such as ISO
14443 and JIS X 6319-4
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8. THE HCE BREAKTHROUGH
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9. HOST CARD EMULATION: ACCESSING
AN INFRASTRUCTURE OF ACCEPTANCE
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Contactless
is part of many
peoples daily lives and
acceptance of
contactless
is pervasive
HCE
opens the door
for developers
to exploit
the infrastructure
and
deliver better
user experiences

10. WHAT IS THE BREAKTHROUGH OF HCE?
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Open
Global and Software basis
Flexible combination of security
3
2
1
A billion units available in the
global market
Feasible method for both SME
use or large-scale deployment
All of NFC services can be
integrated into mobile

11. NEW SECURITY STRUCTURE
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conventional card emulation host card emulation
Risk Management: Dispersion approach
Combination of software technology, tokenization, TEE or
biometrics hedges corresponding risks
* NFC app on the host, tokenization by the server
Android
Device
Host CPU
NFC
Controller
NFC
Reader
NFC
Host CPU
NFC
Controller
NFC
Reader
Secure
Element
Android
Device
NFC
Risk Management: Overconcentration
Secure Element tamper-resistance manages card
application and/or value
* Payment app on SIM or Transport app on eSE

12. NFC HCE USE CASES
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13. HCE IN ACTION:
BBVA WALLET
 2nd largest bank in Spain
 200K+ users
 HCE based on Visa specifications
 Rolled out in US, Chile, and
Mexico later this year
 Over 250,000 users
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14. HCE IN ACTION: BANKINTER
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• Among top 6 banks in Spain
• In partnership with Seglan
• “Mobile Virtual Card” service
cloud-based security
• Seeking licensing to other banks

15. HCE IN ACTION: PREPAY SOLUTIONS
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• Europe’s #1 prepaid services
provider
• In partnership with Proxama
• Mobile payment solution for
prepaid users
• Brands, retailers, and financial
services providers can deliver
mobile payments plus loyalty and
proximity marketing

16. HCE IN ACTION: AMERICAN EXPRESS
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• 1st Amex HCE implementation
• PBZ: 2nd largest bank in Croatia
• Subsidiary of Intesa Sanpaolo (#2 bank
in Italy)
• Opportunity to expand to 12 other
Intesa groups in 11 countries

17. HCE IN ACTION:
TICKTRACK BY
ADITIUM
 Integrated transportation
logistics
 Passenger access control
 Fleet management and telemetry
data
 Communication and alerts
 Reporting
 P2P solution; no contactless
reader infrastructure required
 Top audience vote-getter at NFCF
Global Summit 2014
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18. HCE IN ACTION: DCR STRATEGIES
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• Canada-based loyalty/prepaid services
provider
• Operates in 30 markets globally
• Mobile payment
• Mobile gifting
• Integration of multiple loyalty cards

19. HCE IN ACTION: VISA EUROPE/WORLDLINE
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• The first implementation of “Visa Cloud Based
Payments”
• Developed for Android 4.4+
• Launching in early 2015

20. HCE IN ACTION: CUA
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• Australia’s largest credit union
• 400K+ customers, 60 branches,
3,400 ATMs
• First Asia-Pac bank to launch
mobile payments using HCE
• Leveraging HCE Android App by
Cuscal, supporting Visa payWave
• HCE selected for security, cost-
efficiency

21. NFC IN RETAIL
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22. RETAIL STUDY CONDUCTED WITH STRATEGY ANALYTICS
Purpose of Study:
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Retailers and brands
more
customer-centric
Growth of digital
interactivity for
retailers and brand
Gather data about
end-user experiences
and perceptions of
NFC in retail setting–
as it relates to other
technologies

23. RESEARCH BACKGROUND
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 36 participants
 Six retail simulation experiences
Part 1: Observational research
(primarily qualitative)
Part 2: Web survey
(quantitative)
 1,038 consumers surveyed
Research methodology:
Focused on North America
Note: all data collected before Apple Pay was introduced

24. OVERVIEW OF CONSUMERS’ USE OF NFC
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FACTS AND STATS
Which of the following tasks have you used NFC on your phone to complete?*?
2%
19%
27%
34%
45%
59%
68%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
Activate a gaming figurine (non-phone)
Use for ticketing
Access digital content
Pay for items in a retail store or vending machine
Transfer content from on NFC phone to another
Pairing with another device
* For those that have used NFC technology

25. COMPELLING DATA
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FACTS AND STATS
OVER
75%
MORE THAN
75%
OVER
60%
of respondents who used NFC
were very satisfied with their
experience
of respondents indicated an
interest in viewing additional
product information including
inventory and availability via
NFC.
were interested in an NFC-
enabled mobile shopping cart
in-store experience and using
NFC.

26. WHY NFC NOW FOR BRAND OWNERS AND RETAILERS?
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The surge in NFC growth and
investment creates solid
foundation
Consumers prefer NFC
NFC and Bluetooth Beacon
can co-exist to combine in-store
proximity alerts (Bluetooth) with in-store and
post-sale item-level interactivity (NFC)
NFC fits omni-channel picture
(offline to online)

27. FIND OUT MORE: WHITE PAPER
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NFC Technology: How
Changing Consumer
Preferences Create New
Opportunities for Retailers
white paper.
Link here:
http://nfc-forum.org/retail-study/

28. HOW THE NFC FORUM IS DRIVING
ADOPTION
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29. VERSATILITY OF NFC
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Consumer
Electronics
One Touch to BT/WiFi
Automotive/Mobile Printing
Accessory / Wearable
Healthcare
Remote Healthcare
Payment
Credit/Debit
Transport
Airline
Ticket
Public
Transport
Ticket
Retail
Coupon and Loyalty
Programs

30. COMMITTEES & WORKING GROUPS
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Special Interest
Groups (SIG)
Technical
Committee
Japan
Task Force
Six Working Groups lead
technical discussions, and
create and maintain all
aspects of the NFC Forum
technical specifications.
.
SIG Working Group and Task
Force activities build value
across key market sectors.
Efforts are open to all
members.
Three Working Groups
manage the framework for the
NFC Forum Certification
Program and Plugfest Events.
Established to promote NFC
to this regional market and
overcome the challenges of
migration from its legacy
infrastructure. Key players in
the region share NFC use
cases and best practices,
Compliance
Committee

31. “TAP INTO NFC” DEVELOPER PROGRAM
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Access mobile OS NFC
APIs
Showcase NFC
solutions
Interactive developer
community3
2
1
For NFC Developers
http://tapintonfc.org/
Plus:
• NFC developer kits
• Forthcoming events, and the
• NFC Developer Knowledge Base

32. LIAISON PARTNERS
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33. NFC PRODUCT SHOWCASE
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34. THANK YOU!
Join the NFC Forum:
http://nfc-forum.org/about-us/join-the-forum/
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