Australian Payments Provider Cuscal Puts Host Card Emulation through its Paces

Cuscal – an Australian payments products provider - has unveiled a trial program that utilizes Host Card Emulation (HCE). It enables any android phone with the latest version of KitKat to be used in place of credit card with PayWave Technology. Cuscal plans to launch commercially via financial institutions by June, 2014.

We see HCE as being a really important next step in mobile payments because it’ll enable our clients to use devices without the hassle of having to deal with mobile operators or handset manufacturers, said Cuscal’s GM of product & services, Adrian Lovney. It’ll enable our clients to really push the boundaries; a real next step in mobile payments.

  • HCE serves the purpose of smart card using only the Software. Prior to the development of HCE technology, NFC transactions took place using secure elements only.
  • HCE allows merchants to offer payment card solutions using mobile with simplicity, leads to closed-loop implementation, real-time distribution of cards and effectively, facilitates a plain deployment scenario: One that does not ask them to remove or change the software inside the terminal.
  • Cuscal’s HCE works with Android devices that already have NFC in-built.
  • It will only work on Android devices running the latest version of Google’s Android software - Kit Kat. It doesn’t work with Apple or Windows smartphones.

We think customers understand that; you’ve got other banks targeting Samsung S4 owners as having access to embedded secure element technology, so clearly targeted communications for cardholders about which devices this will work on does work. We know, people increasingly update their devices every 12 to 18 months anyway. It’ll certainly grow, said Adrian Lovney. In the HCE world, there does need to be some level of Internet connectivity. If you’ve only got one bar of reception then a transaction may not work; two bars and above and you’re away, he added.

My view is that Apple might embrace this, because it doesn’t require the cooperation of telcos to actually enable or provision the capability of the phone said Brian Parker. Apple would be able to control their ecosystem, which they love doing. The application would be downloaded to the app store, through their certification. Apple might see that as an opportunity; one of those things that encourages them to put NFC in there. But that’s pure speculation.