Google Wallet’s HCE Push Making NFC Believers (April 23, 2014)
While Google Wallet forges partnerships with merchants that don’t rely on NFC, one of contactless payments’ most high-profile skeptics may be coming around to seeing some real potential in the technology. In a post on PayPal Inc.’s Forward blog, company president David Marcus said he’s softened his stance on NFC, moving from being “a massive skeptic” to “cautiously optimistic” on NFC take-up in “very specific shopping use cases.” Not exactly a total conversion perhaps, but a significant shift for an executive who for years has been saying NFC was a technology in search of a problem.
Marcus said his change of heart on NFC was primarily due to three other letters—HCE. Host card emulation removes what had been a major obstacle to NFC ubiquity—the secure element—and the attendant battle between financial institutions, handset manufacturers and mobile carriers for control over it. Google announced its support for HCE late last year, opening Google Wallet’s NFC capability to third-party developers—like PayPal—by eliminating telecom-imposed fees and restrictions on NFC development. “The Android team approached us with this initiative late last year to collect our feedback on implementation,” Marcus wrote. “For the first time ever, I saw a glimmer of hope for NFC in some shopping configurations.” Those include in-lane shopping situations, as opposed to the pay-wherever-you-are design of the Apple Store, he wrote.
Visa and MasterCard’s embrace of HCE earlier this year also was an important step, Marcus said. And the approaching shift to EMV card security standards should lead to more NFC enabled POS terminals by 2016.
But while Google Wallet’s HCE shift may have helped soften Marcus’ stance on NFC, Google isn’t putting all of its own eggs in the contactless basket. Instead, the company continues to grow payments capabilities beyond NFC. Earlier this week, Domino’s Pizza announced it would integrate its own Android ordering app with Google Wallet, enabling Domino’s customers to place orders via online mobile and pay with payment credentials stored in the wallet.
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