Christophe Bourbier, Chairman of Limonetik
NFC technology is a strong candidate to render credit card terminals obselte. According to the American IT research company Gartner, transactions made using mobile phones rose 61.9% between 2011 and 2012.
Near-Field Communication (NFC) technology allows the exchange of information between devices held within close proximity. It is therefore ideal for mobile payments. With HCE (host card emulation), the security of the transaction is migrated to the cloud, which means that it is placed outside of the actual phone. This technology has been installed in 300 million smartphones in 2013.
Until now, this form of payment has not been widely used outside of Asia. In France for example, payment by credit card remains the preferred method for online transactions, accounting for 4 of every 5 payments made in 2013. The HCE should nevertheless gain in popularity since Apple has joined the list of companies that integrate NFC in their smartphones, following the lead of Samsung and Motorola who have done so for some time with the Android operating system. The iPhone 6 and 6+ are now equipped with NFC. The identity of the person making the transaction is verified by a Touch ID biometric sensor.
Banks adopt the Host Card Emulation (HCE) solution
Master Card will adopt HCE solution for NFC mobile payments. This tool will allow consumers to easily use their MasterCard card to make contactless payments from their NFC enabled phone. The growing success of HCE/NFC technology may also be attributed to the fact that there are more and more NFC compatible payment terminals. Indeed, within two or three years, most stores should be able to accept mobile payments applications.
The explosion in sales of smartphones, deployment of mobile internet networks and developments in technology indicate the development of a powerful new ecosystem.
The numerous players in the mobile payment market
Many players are present in the payment market. The reason? Mobile technology requires the presence of actors such as phone manufacturers, mobile operators and manufacturers of SIM card. The NFC ecosystem is made up of many players, sometimes in fierce competition with one another. This is even more true on the payment part of HCE where significant revenue can be generated. This potential for profit is attractive for numerous companies. To be continued…
