HCE

Although Still Young, HCE is Payment Instrument of the Future

Host Card Emulation (HCE), or tapping the smartphone to a point-of-sale terminal, is on the path to becoming the future of payments. As most of us cannot imagine our lives without smartphones, which are involved in all aspects of our activities, those who make their living from our transactions with their organizations increasingly communicate with us through mobile platforms. This comes as no surprise since some, or even most of us will sooner realise that we have forgotten or lost our mobile phone than our wallet or keys.

Role of mobile apps

For a long time, both merchants and banks have been aware of the role mobile applications can play in their business and the building of relationships with end clients. Therefore, loyalty apps and apps that inform us about products and services have already been fairly established, and an increasing number of these also enable payment at sales points.

Payment apps features

In order for a payment app to take off, it is important that it simplifies payment, in the first place for the client, and then for the merchant. In this sense, the app must be easy to use, secure and fast, as only in this case will the purchase experience improve, and, as a result, become part of daily routines.

Directions of payment apps development

The existing mobile payment apps are based on tested technologies of contactless card acceptance. They rely on regulations and infrastructure through which preconditions for such payments have been created. For the time being, the development of payment apps is taking two directions. In one, the existing payment card is virtualised – its use is enabled through the smartphone in digital form. An example of this kind of payment is ApplePay, which is available to iPhone users. Another category includes applications based on the HCE feature of Android smartphones, which relies on contactless technology. This technology forms the basis on which banks issue a virtual card as an independent app or as part of mobile banking.

Benefits of contactless payments

The number of contactless mobile cards and contactless payments is constantly growing in the world. Great advantages are offered, on one hand, to end users through simplified payments which require using only a smartphone, and to merchants thanks to easier handling of payment methods. Furthermore, contactless payments are also supported by credit card companies through the continuous updating of regulations and infrastructure.

For more insight into bankers’ perception of HCE, check out Asseco SEE’s survey results.