What is Host Card Emulation (HCE)? Android KitKat 4.4 enables NFC-based transactions through host card emulation (HCE). First, what is card emulation? Card emulation allows a mobile device to mimic a payment card. In essence, the device becomes a contactless card. This card can be used to make purchases, display tickets and present identification. It transmits the data received from the terminal between the NFC device to the secure element (SE). The physical SE is embedded in the phone or contained within the SIM card/ UICC. However, using a physical SE for mobile payments has its downsides: 1. Complex business models are required to gain access. 2. This creates dependencies that make it complex and expensive to interact. 3. Application issuers need agreements with SE issuers who need to connect with the mobile handsets. 4. Limited storage capacity of the SE and processing speed. HCE enables the SE to be placed in a hosted cloud environment, rather than the mobile device. Service providers can take control of their applications by insourcing an SE in the Cloud platform: 1. It eases the use of NFC mobile payment services. 2. Application issuers can provision their apps directly to the device without third party intervention. 3. It shortens the value chain as fewer parties need to be involved, lowering provisioning costs. 4. Direct access to the SE enables instant fraud detection and allows immediate blocking on apps. 5. Greater processing power and storage capacity that enables more advanced risk management. 6. Without intermediaries the gap between application issuers and consumers becomes smaller. This results in consistent brand and user experience across all NFC services. Interested in host card emulation and its influence on the industry? Watch our video.

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