NFC Mobile Payment options: HCE vs SE

When Google made Hosted Card Emulation (HCE) available for its mobile payment in order to bypass telecoms’ control, the debate of HCE and Secure Element (SE) continues.

A webinar “Evaluating NFC security strategies: The role of the secure element in the evolving landscape” was hosted by NFC World on January 20, 2015.

A few highlights of the webinar is as follows:

  • The NFC adoption rate is increasing rapidly based on the stats of NFC SIM shipped; 16M shipped in 2011, 30M in 2012, and 72M in 2013.
  • Geographic stats show the demand in different regions. In 2013, 37M was shipped to Japan/Korea, 24M to North America and 14M to Europe.
  • The pros and cons analysis of HCE and SE technology.
  • A SIMalliance recommended deployment model based on security and market reach, application and technology requirements.
  • A case study on Canada’s success as the #1 mobile payment country in the world. Some stats are as follows: All of Canada’s major MNOs now offer SE based NFC payment capability to their customer; 2/3 of the phones are Android and BlackBerry; 5 of Canada’s “Big Six” Financial Institutions do the same; over 84% major retail merchants have contactless EMV terminals

SIMalliance anticipates a future where SE and HCE will continue to co-exist and in many cases converge. This will be the basis of an optimally efficient and secure NFC ecosystem.

To watch the free seminar, click the link.

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Big Data and NFC Mobile Payment

Today, while I was finishing an online purchase, a window popped up on my screen to ask if I wanted a free purchase protection service from Google. (See screen shot at the end of the blog)

If I were regular online shopper, I might think, “How nice, why not to take advantage of the free protection?” However, being into Big Data, I see this as a smart attempt on behalf of Google to collect data. Currently Google collects a lot of information about their customers using Google search, Gmail, Google docs, maps and calendar. Offering free purchase protection gives them the opportunity to further develop their big data analysis by collecting information on online purchase.

In its recent blog, Google said if any information is stored in Google+, Gmail,  or Google calendar, it can instantly accessible through voice search. This information, which will be secured through encryption, includes information on flights, reservations, purchases, plans, and photos. This is how transparent our life. The more data we provide to a service provider, the more they can make our life easier. The cost, however, is that we have less privacy. For example, A Wall Street Journal article titled “NSA Reaches Deep Into U.S. To Spy on Net” reported yesterday that NSA systems have the capacity to reach roughly 75% of all US internet traffic.

When NFC mobile payment takes off, telecoms will own mobile purchase information. That data will enable them to understand their customers better. If I were a leader in the telecom industry, I would want to obtain clarity about what consumer mobile purchase data means to the bottom line of my business, to the lives of my consumers and to the whole ecosystem in order to generate the business intelligence that benefits all.

In the article “One Man’s Trash is Another Man’s Big Data”, the author pointed out ” We have a long way to go to get rid of the mindset that data is all about marketing and advertising.” I trust innovation comes from this kind of awareness, sharing and discussion. What do you think?

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Develop an NFC Strategy Through Observing Cloud Adoption Trends

NFC pioneers in the US have questions about the adoption rate of the technology and the partnership opportunities in the ecosystem.

The adoption trends of Cloud Computing perhaps provide some insight on this inquiry. Amazon started to offer Amazon Web Services (AWS) in 2006, Google added Google Docs to its Gmail offering in 2007, Microsoft launched Azure in 2009, and Apple announced iCloud in 2011.

James Staten of Forrester Research, shared recent trends from a survey on Cloud developers at the  RightScale Compute 2013 conference. The first trend is that developers seem to be lacking in experience with Cloud. The survey revealed that only 30% of developers had hands-on experience with the Cloud. Given the number of consumers utilizing the Cloud, this low percentage is surprising to me. For example, my laptop offers Acer Cloud, my iPad synchronizes with my iPhone through iCloud, and my Google calendar is in Google Cloud. Because these and other Cloud products are becoming more widely utilized, one can assume that a high percentage of the developers are using Cloud products. What could motivate these developers to create Cloud-based apps?

Another trend points to smaller organizations as leaders in Cloud innovation. The survey revealed that less than a quarter of Cloud developers are working for large enterprises. Finally the demographic of the survey itself revealed a trend that US’s adoption seems to lag behind that of other countries. Only a quarter of Cloud developers are in the US; the others are in Asia and Europe.

What can this tell us about NFC? A brief history shows some of the parallels. The first NFC enabled mobile phone was released by Nokia in 2006. Since then, quite a few NFC-enabled phones have come on the market, followed by the introduction of NFC-enabled tablets in 2012 and 2013. Asia and Europe have had a higher adoption rate of NFC, while in the US, consumers are not taking full advantage of the capability.

If you are one of the NFC pioneers in the US, will working with large enterprises present a good opportunity? Where can you make an impact as an educator of the technology? “What do we need to do together to make this work” as asked by James Staten.

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