NFC
In an NFC transaction, an NFC-enabled smartphone communicates via
an RFID link with a contactless transmitter attached to a POS device. The
cardholder pays using a card held in digital form in a mobile wallet, which is
stored either in a secure element on their smartphone’s SIM card or in the
cloud using a technology called Host Card Emulation (HCE).
At checkout, the consumer tells the clerk that he or she wishes to pay using
a smartphone. The consumer opens the mobile wallet, selects the desired
card and then taps the smartphone on the merchant’s contactless POS
terminal. The consumer’s payment credentials are retrieved automatically
from the smartphone’s secure element — or from the cloud using HCE —
and transmitted via NFC to the payment terminal.
The advantage of HCE over secure element-based NFC is that, since HCE
is supported by Google’s Android KitKat 4.4 operating system, it can run on
any Android-based smartphone, not just on NFC-enabled smartphones.
“Visa believes that (HCE) cloud-based mobile payments represent a
significant opportunity to accelerate mobile payments globally,” said
Rodrigo Meirelles, Visa’s senior director of digital payments solutions for
Latin America and the Caribbean.