What makes HCE (host card emulation) so appealing to banks in particular?
When HCE technology came to the market in 2013 there were two types of reactions. One was that in the light of this new development, banks will gain control over the platforms where their cards are once the ecosystem becomes simple and manageable. In comparison to the SIM-based or even embedded secure elements systems, HCE made things easier.
The second reaction was that, even if the ecosystem is simpler, it still remains quite complex. The change doesn`t happen overnight.
With the inclusion of HCE into operating systems came the possibility of performing mobile contactless payments without using a SIM secure element. So this means that the role of mobile network operators has been affected. How relevant are mobile network operators in this new context?
In this new context, mobile network operators do not have a direct role like do not have a role in the payments at the moment. Thus, what HCE basically changed was to digitize payments. It took away the physical part of the payment process and it made it completely digital, completely virtual.
Having mobile contactless payments solutions on the rise, how could value added services be unlocked at the point of sale via these technologies?
The main problem with redeeming coupons at the point of sale at the moment is that is there are already so many patents in that area. It`s not commonly in use at the moment and it`s one of the things that could be made better, but then again, there`s digitization. There are other means to do that, to digitize the value added services with the payments.
As we gear up for the open payments revolution and while consumer-led solutions have had a great influence on ecommerce, what do you think the role of mobile could be in P2P payments? Is there an untapped market?
Yes and no. Transaction if part of the human interaction – people share the taxi, split the dinner bill etc. – so, it’s natural to have people excited about exchanging money between themselves. As part of that, having it in a digitized way makes it even better. This makes P2P payment in big demand.
Up to now, the problem with many of the P2P payment solutions has been that they are simply too complicated and too user unfriendly. They have been so difficult to set up that most of the people have just given up. Hence, the killer application is the one that takes less than 5 clicks to set up the account and takes only 3 clicks to send the money.
How could the industry ensure that customers and merchants are brought along with the ease of use promise that HCE brings?
HCE doesn`t really change the users` experience because it is the same as using contactless cards or any mobile contactless payment. The user doesn`t really care if it`s a physical secure element or virtual secure element and they don`t even need to know if it`s either one, whereas merchants, the more there are contactless terminals available, the more people are using their contactless cards, the easier it will be to use their mobiles as well. So I think that the take up of contactless cards already helps and will continue to enhance the use of contactless in mobile.
About Sirpa Nordlund:
Sirpa Nordlund is executive director of Mobey Forum, which is a global industry organization empowering banks and other financial institutions to lead in mobile money. The members include banks (such as HSBC, ING, Nordea and Royal Bank of Scotland) and software companies (such as Monitise, Oberthur, Fiserv and SAP).
Sirpa spent 13 years in telecom and finance industry before joining Mobey Forum. During 10 years at Nokia she had several positions in sales, strategy, business development and finance, before departing for a senior position at Venyon, a subsidiary of Giesecke & Devrient, which provided trusted mobile services for financial institutions.
Sirpa holds a Master of Science degree in economics from the Helsinki School of Economics and Business Administration, majoring in finance. She also has advanced studies in classical music at Sibelius Academy (University of Arts), majoring in piano playing.
Ms. Nordlund has held the position of Mobey Forum Executive Director since 2010.
About Mobey Forum:
Mobey Forum is the global industry association empowering banks and other financial institutions to lead in the future of mobile financial services. Mobey Forum connects industry thought leaders to identify commercial drivers for the development of better mobile commerce. Mobey Forum’s members collaborate to analyse business strategies and technologies to create innovative, interoperable and competitive financial services.
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