According to an analysis from Frost & Sullivan, host card emulation (HCE) has created a new layer of security services. On the other hand, the HCE solutions have raised several concerns as in the absence of a single network, a single protocol and a common set of rules, hackers can breach security layers using sophisticated tools.
Until the recent spate of attacks, banks and financial institutions had been reluctant to invest heavily in protecting their digital transactions. However, new awareness of the huge liabilities and losses that can be incurred through these data leaks is encouraging their support for the use of HCE security technology.
HCEs security level is lower than that of near field communication (NFC). HCE does not use a hardware secured element to store secret keys. Credentials are moved to a cloud-based platform and are accessible through a specific payment application. The credentials are available for one-time use and based on the risk, can be used only for a particular amount.
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