HCE. . . and Beyond - It's Not Just a Transaction

Paula Hunter, Executive Director, NFC Forum
HCE Summit: April 14, 2016, New York
HCE. . . AND BEYOND
IT’S NOT JUST A TRANSACTION

Advancing Near Field Communication Technology2
The NFC Forum brings the
convenience of NFC technology
to life. We empower
organizations to deliver secure,
tap-based interactions with an
intuitive, reliable experience to
users around the globe.
NFC FORUM MISSION

THE NFC FORUM REPRESENTS
All of the world’s major:
● chip vendors
● payment service providers
● smart phone manufacturers
● mobile operating system providers

STRATEGIC FOCUS FOR 2016
4
Transportation
Internet of Things
Payment
Pervasive use of
contactless
payment via
mobile devices
NFC technology an
accepted element
and the tool of choice
for non connected
devices
Growing access and
increased usage rates
of NFC technology in
PTOs worldwide

SPONSOR MEMBERS
Advancing Near Field Communication Technology
PRINCIPAL MEMBERS
5

“AT” AFTER TRANSACTION – THEN
WHAT?

NFC IS MORE THAN MOBILE PAYMENT
Healthcare
Taking off!!
Retail
Taking off
Remote
Healthcare
Transport
Taking off!
Airline
Ticket
Public
Transport
Ticket
Coupon
and
Loyalty
Programs
Consumer
Electronics
Soaring!
One Touch to BT/WiFi
Automotive/Mobile Printing
Accessory / Wearable
Payment
Taking off
Credit / Debit

NFC DEVICES OPERATE IN 3 MODES
Card Emulation
8
Tag/Card Reader/Writer
Connect the world of
apps with the physical
world
Connect devices through
physical proximity
Connect to a common
infrastructure …3
2
1
Peer to Peer

HOST CARD EMULATION: ACCESSING
AN INFRASTRUCTURE OF ACCEPTANCE
9
Contactless is part of many peoples daily lives and
acceptance of contactless is pervasive
• Retail Stores, Hotels, Corporations, …
• plus Laptops and other Consumer Electronic devices
HCE opens the door for developers to exploit the
infrastructure and deliver better user experiences

SECURITY OPTIONS FOR NFC DEVICES
NFC FORUM SPECS ENABLE ALL OPTIONS
10
Conventional /silicon based approach Host Card Emulation /cloud, software approach
Stranded multi-technology security
Tokenization, one-time keys, time limited keys,
software tamper resistance, cloud stored
values, etc.
NFC
Device
Host
CPU
NFC
Controller
NFC
Reader
NFC
Host
CPU
NFC
Controller
NFC
Reader
Secure
Element
NFC
Device
NFC
Secure silicon centric security
Tamper resistant secure silicon (eSE, NFC-
SIM) protects apps, values, keys, etc.
• Proven maturity in,
• Deployments
• Security certification
• eSE, NFC-SIM issues,
• Ownership
• Fragmentation
• Advantage
• Less ownership issues
• Less fragmentation
• Developing maturity
• EMVCo deployments
• No others, to date
• Specs and certification
• EMVCo releases
• No others to date

HCE ADVANTAGES
11
Open
Global
Software/Cloud solution
Scalable/Flexible
Security level optimization
3
2
1
Runs on standard NFC Devices
(Android, Windows, Blackberry)
Free from SE owner governance.
You govern your own service.
Security level can be optimized
to service requirements

HCE THE REAL CHALLENGE
12
Industry standards
Guidelines, specifications,
certification for non-EMV use
cases are not established
The Real Challenge
Establishing industry wide,
Guidelines, Specs, Certification
that are OPEN to anyone
Universal applicability across all
handset platforms

MARKET DYNAMICS

TRANSPORTATION SERVICES
http://nfc-forum.org/agreement-reached-nfc-interoperability-with-contactless-public-transport-
infrastructures/

NFC IN PUBLIC TRANSPORT GROWTH
15
● Netherlands launched Android-based
NFC public transport payment trial
● Moscow launched NFC public
transport ticketing
● UK Cards Association announces
framework for nationwide NFC public
transport payment
Within the past three months:
Source: NFCWorld+
An estimated 1.5 billion boarding passes will be issued via
smartphone by 2019 – Source: Juniper Research
Consumers are ready to use their phones!

RETAIL SERVICES

SIX OPPORTUNITIES FOR RETAILERS AND
BRAND OWNERS
17
Provide quick access to store
deals, Wi-Fi, loyalty and
rewards account
If your favorite retailer or
brand offered coupons and
discounts for connecting to
their store, how would you
prefer to connect your phone
to the store?
1
43%
25%
14%
17%
Using NFC Using QR Code
Using Bluetooth Beacon Using browser
Total sample size: 1,038

SIX OPPORTUNITIES FOR RETAILERS AND BRAND
OWNERS
18
Quote from observational research:
“ NFC is the better option for accessing
information or deals – especially if the
QR code is on the wall or at an angle
that makes it difficult to scan. ”
Research participant

45% 32% 9%6%8%
0% 20% 40% 60% 80% 100%
Very interested Somewhat interested
Not sure Somewhat uninterested
Not at all interested
BRAND OWNERS
19
Deliver valued product
information, store inventory
insight
How interested are you in
accessing more product
information and store
inventory using NFC
technology when shopping at
your favorite retail shops?
2

BRAND OWNERS
20
Provide simple and quick
access to related, contextual
product information
brand offered the ability to
get recipe ideas with
shopping lists related to a
product, how would you
prefer to access this
information on your phone at
the store?
3
50%
23%
10%
17%

OWNERS
21
“ NFC is really convenient
and there’s no downside. ”

BRAND OWNERS
22
Provide digital shopping cart
experience
How interested are you in
having the digital shopping
cart experience when
shopping at your favorite
retail shops?
4 36% 30% 13%8%13%
0% 20% 40% 60% 80% 100%
Very interested Somewhat interested
Not sure Somewhat uninterested
Not at all interested

Inform decision making by
offering convenient access
to large item product
information
BRAND OWNERS
23
brand offered the ability to
get more information on
larger, higher-priced items,
how would you prefer to
access this information on
your phone at the store?
5
56%
23%
7%
14%

OWNERS
24
“ I prefer NFC because I have my child
with me, and with the QR code I have
to take time to find the app and then
scan the barcode. ”

BRAND OWNERS
25
Offer ability to order correct
consumables (such as
printer ink and toner) from
home [post sale]
6
If your favorite brand
offered the ability to order
parts/accessories in this way,
how would you prefer to
do this?
61%20%
19%
Using NFC Using QR Code Using browser

WHY NFC NOW FOR BRAND OWNERS AND
RETAILERS?
26
Simpler
More
convenient
Faster
Better
consumer
control over
the interaction
Why consumers prefer NFC:

THE INTERNET OF THINGS SERVICES ...
... AND THE CONNECTED CONSUMER
According to IDC, IoT spending will top
$1.4 billion by 2019, Source: IDC

CONNECTED CONSUMER REQUIREMENTS
28
Easy
Network
Access and
Data Sharing
User Control
with
Expressed
Intent
Data
Security at
Multiple
Levels
Ability to
Connect the
Unconnected
Only NFC Provides:

EASY NETWORK ACCESS AND DATA SHARING BETWEEN
DEVICES
29
● No lengthy handshaking
● No user data entry required
● No additional user interface required
● Fast, error-free data sharing

USER CONTROL WITH EXPRESSED INTENT
30
● Simple, intuitive means of user intent to
initiate action
● Sure and consistent
● User options to set and enforce
preferred degree of control

DATA SECURITY AT MULTIPLE LEVELS
31
● Built-in features that limit
opportunities for eavesdropping,
man-in-the-middle attacks
● Easy-to-deploy options for
additional protections to match each
use case
● Tools to set and enforce security
preferences
Secure Element
App-Level Security
User Settings
Digital Certificates
Range Limit

THE ABILITY TO CONNECT THE UNCONNECTED
● It‘s The Internet of Things, not The Internet of
Electronic Things
● Need a way to embed intelligence in
unpowered, unconnected objects and things
● Need a way to gather data from unpowered,
unconnected objects and things

NFC TECHNOLOGY IS A 2 BILLION CLASS PLATFORM
33
● Impact on B2C market
 Billions of deployed NFC devices now available to support your service offering
 New use cases can be introduced on Day 1 over the platform
● Impact on B2B market
 Enables easy development of contactless applications without dedicated equipment
 Commoditization of acceptance terminal
 Market figure of FY2014: POS terminal 30M unit vs. NFC device 500M unit

BECOME A LEADER IN THE RAPIDLY
GROWING NFC INDUSTRY
JOIN THE NFC FORUM!
http://nfc-forum.org/

THANK YOU!
Questions?

HCE. . . and Beyond - It's Not Just a Transaction

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