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HCE Technology, iPhone 6 Expected To Shake Things Up In The Contactless Payments Arena

02 Jul 2014

Since 2011, there has been a lot of talk in the retail space about the growing popularity of NFC contactless payments solutions. While a variety of these solutions have been introduced to the market over the last few years (think ISIS, Google Wallet, MasterCard’s PayPass), the reality is that mass adoption of contactless payment readers has been slow moving.

And from our perspective, it’s no surprise. Why? Well, as is the case with any new technology, retailers are rightfully hesitant to invest in a solution that doesn’t have the consumer demand (as well as payment security) behind it. However, two recent developments suggest that all of this may be about to change soon.

According to a new study from Juniper Research, entitled Mobile Wallets: Strategies for Developed and Developing Markets 2014-2019, 50% of mobile wallets in developed markets – and more than a third globally – expect to rely on contactless technology by 2018. What is really expected to shake things up is Apple’s entry into the arena. Apple’s anticipated launch of the iPhone 6, in conjunction with signing an e-Wallet deal with China UnionPay (requiring NFC) will be the spark to ignite consumer demand, according to many industry analysts.

The second big development that many think will be a game changer is the recent introduction of Host Card Emulation (HCE) technology. HCE technology can be hosted securely in the cloud rather than being embedded in the handset or on a SIM card and, in a nutshell, is expected to greatly simplify the mobile payments ecosystem, as well as mobile payments deployments on the whole.

With these new developments in mind, retailers would be wise to start considering how quickly and efficiently they could implement a mobile contactless payment solution.

I’ve said this before, but it bears repeating: retailers looking to stay ahead of the curve should seriously consider NFC readers when deploying new pin entry devices (PED). Because there can be some hefty costs involved in retrofitting PED hardware with NFC technology, I would highly recommend that, at the very minimum, the ability to easily upgrade should be locked in to any new investment.

So, we want to know: does your business have a mobile contactless payment solution in place? Does your current PED hardware allow for an easy upgrade to NFC capabilities?


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