Visa and MasterCard bypass telcos with cloud-hosted NFC payments

Visa and MasterCard have announced their support for a cloud-based NFC system that removes the usual reliance on telcos for contactless payments.

Visa and MasterCard have announced their support for a cloud-based NFC system that removes the usual reliance on telcos for contactless payments.

Whereas there is usually a ‘secure element’ on a phone’s SIM card that enables NFC, Host Card Emulation (HCE) allows Android apps to use payment accounts that are securely hosted in the cloud.

James Anderson, head of emerging payments at MasterCard, said: "Consumers are now shopping and paying in whatever way best fits their needs and lifestyles – and from every device they own.

"To meet their expectations for convenience, we need to accelerate the availability of services in the market.

"The use of HCE provides a very attractive way forward to launch an increased number of NFC-based offerings."

The HCE feature is already supported on Android 4.4 KitKat, which launched in November 2013 and continues to be rolled out on Android devices.

Elizabeth Buse, executive vice president of global solutions for Visa, said: "Our clients and partners around the globe are continuously looking for flexible, cost efficient and secure ways to enable mobile payments.

"The Android HCE feature provides us with a platform to evolve the Visa payWave standard, support the development of secure, cloud-based mobile applications, while at the same time offer greater choice to our clients."

MasterCard says it has been working on the scheme with Capital One and Banco Sabadell, whereas Visa says it has support from ANZ, NAB, Royal Bank of Canada and US Bank.

Both companies have developed a range of tools and applications to support banks in their adoption of HCE.

The cloud-based technology changes the balance of power between network operators and banks by providing the banks with an alternative to renting a space on the SIM to house account information.

 

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