Visa and Mastercard's HCE announcement creates new mobile payments players

Visa and Mastercard are backing host card emulation (HCE), making it possible for credit card companies to bypass barriers to providing cloud-based mobile payments.

The card companies are preparing to utilize a new payments technology already built into the newest versions of the Android mobile operating system. Android's KitKat allows data from credit cards to be stored in the cloud, thwarting carriers' control of how NFC payments are made.

Android devices include a piece of hardware, the secure element (SE), that transfers data from device to device. But with HCE, Mastercard and Visa will soon be able to bypass the SE to process payments.  

This blows the mobile payment landscape wide open and allows for retailers to build payment systems into their own Android apps.

Mastercard's payment network will publish a specification in the first half of this year outlining how a mobile app and payment terminal will need to interact to make NFC payments utilizing HCE possible, James Anderson, group head of emerging payments told Re/Code.  

Visa is set to announce its own updated standard to enable HCE payments. There will also be a software development kit for app developers and a service that replaces debit or credit card numbers with a single password to enhance security.

There is still a ways to go before shoppers are tapping their phones to pay with Visa or Mastercard, but that day will come a whole lot sooner thanks to these announcements.

For more:
-See this FierceMobileIT article
-See this Re/code article

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