The Impact of HCE on NFC Adoption

THE IMPACT OF HCE ON NFC ADOPTION

Paula Hunter

NFC Forum Executive Director

HCE Summit 2015

Advancing Near Field Communication Technology

NFC FORUM MISSION

Advancing Near Field Communication Technology2

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

THE NFC ECOSYSTEM


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

1Peer to Peer

USE CASE MATURITY OF 3 MODES


RW ModeBluetooth・WiFi connection

Smart Poster

•No Legacy Infrastructure

•Ongoing market deployment

P2P ModeAndroid Beam

•No Legacy Infrastructure

•Supported as OS functionality

Card Emulation modePayment

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

THE NFC FORUM ON HCE


“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.”

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


THE HCE BREAKTHROUGH


HOST CARD EMULATION: ACCESSING AN INFRASTRUCTURE OF ACCEPTANCE

9

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

WHAT IS THE BREAKTHROUGH OF HCE?


Open

Global and Software basis

Flexible combination of security3

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

NEW SECURITY STRUCTURE


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

NFC HCE USE CASES


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


HCE IN ACTION: BANKINTER


• Among top 6 banks in Spain

• In partnership with Seglan

• “Mobile Virtual Card” service

cloud-based security

• Seeking licensing to other banks

HCE IN ACTION: PREPAY SOLUTIONS


• 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

HCE IN ACTION: AMERICAN EXPRESS


• 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

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


HCE IN ACTION: DCR STRATEGIES


• Canada-based loyalty/prepaid services

provider

• Operates in 30 markets globally

• Mobile payment

• Mobile gifting

• Integration of multiple loyalty cards

HCE IN ACTION: VISA EUROPE/WORLDLINE


• The first implementation of “Visa Cloud Based

Payments”

• Developed for Android 4.4+

• Launching in early 2015

HCE IN ACTION: CUA


• 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

NFC IN RETAIL


RETAIL STUDY CONDUCTED WITH STRATEGY ANALYTICS

Purpose of Study:


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

RESEARCH BACKGROUND


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

OVERVIEW OF CONSUMERS’ USE OF NFC


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

COMPELLING DATA


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.

WHY NFC NOW FOR BRAND OWNERS AND RETAILERS?


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)

FIND OUT MORE: WHITE PAPER


NFC Technology: How

Changing Consumer

Preferences Create New

Opportunities for Retailerswhite paper.

Link here:

http://nfc-forum.org/retail-study/

http://nfc-forum.org/retail-study/

HOW THE NFC FORUM IS DRIVING ADOPTION


VERSATILITY OF NFC


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

COMMITTEES & WORKING GROUPS


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

“TAP INTO NFC” DEVELOPER PROGRAM

31

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

http://tapintonfc.org/

LIAISON PARTNERS

32

NFC PRODUCT SHOWCASE


THANK YOU!

Join the NFC Forum:

http://nfc-forum.org/about-us/join-the-forum/


The Impact of HCE on NFC Adoption

Technology

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