Visa yesterday announced that a new feature in Google Android will allow it to host Visa payWave-enabled accounts in a secure, virtual cloud. This service eliminates the need to store secure payment data on SIM cards by instead storing it in the cloud. The feature in question, called Host Card Emulation (HCE), was added in Android 4.4 KitKat. It allows any NFC application on an Android device to emulate a smart card. A token system is used to retrieve the information from the cloud rather than from the device itself.
To ensure that cloud-based payments are secure, several layers of security will be implemented, including one-time use data, real-time transaction analysis, payment tokens and device fingerprinting technology along with protection at the application and hardware levels.
“Our clients and partners around the globe are continuously looking for flexible, cost efficient and secure ways to enable mobile payments,” said Elizabeth Buse, Executive Vice President, Global Solutions, Visa Inc. “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.”
The implementation of HCE faces at least one major hurdle: Android 4.4 KitKat today accounts for less than 2% of all Android phones. That number will increase quickly this year as manufacturers update existing devices and release new ones running the latest version of Android but it will be a while . There’s also the not-so-small matter of Apple, one of the largest smartphone manufacturers, which has yet to throw its support behind NFC.
Visa will also extend this cloud based solution to partners outside of retail. For example, financial institutions will also be able to leverage it.
“We believe Visa’s decision to enable cloud-based NFC payments is a critical step in providing clarity and certainty to our consumer and merchant clients of an innovative, easy and secure mobile payments solution,” said Linda Mantia, Executive Vice-President, Cards & Payment Solutions at RBC, Canada’s largest financial institution and considered a pioneer in cloud-based mobile solutions.
It’s still early days for mobile payments through our smartphones but HCE and Visa’s own announcement will help it gain traction by making it easier to implement on our smartphones while ensuring that customer concerns are addressed.
Source : Visa