Host Card Emulation in Android: What does it Mean?

This entry was posted on Wednesday, November 13th, 2013.

It’s nearly three years since Google’s release of Android KitKat 4.4, enabling cloud-based near field communication (NFC) transactions through host card emulation (HCE), and the landscape continues to evolve. Here’s the low-down on what HCE has to offer.

What Exactly is Host Card Emulation?

HCE is a technology built into the device operating system which allows a mobile device to emulate a payment (or other) card, enabling users to make cloud-based near field communication (NFC) mobile payments and other NFC ‘transactions’. Over the past few years, increased accessibility and awareness have led to a surge in adoption, with worldwide mobile payments revenue expected to surpass $1 trillion in 2019.

Adoption is widespread. HCE gained relevance when Google announced support for HCE in the KitKat version of Android. With HCE and cloud issuance, millions of phones were primed for payment through a mere operating system update. And with Android dominating global smartphone shipments at 81%, service providers (SPs) were given the opportunity to offer services to a greatly expanded market of potential end users.

Placing the payment credentials in a remote environment, communicating via the cloud, rather than in a secure element (SE) inside the mobile device, offers more control and direct access to application issuers and eases the launch and use of NFC based mobile services.

The Benefits of HCE…

The main advantage of HCE is the ability it has to put service providers in control of costs, security, partners and, most importantly, management of a solution’s position in the value chain. Players in the NFC ecosystem want to work under mutually beneficial and productive relationships, which will ultimately drive the technology forward and add value to the end-user.

Here are some of the other benefits that HCE offers:


By deploying services to devices via HCE, service providers don’t need to set up any other commercial relationships. This narrows the gap between application issuers and customers, ensuring a consistent brand and end-user experience across all available NFC services.

Easier integration with third parties

Easy access to the SE via the cloud allows easy integration with any third party provider and business model.

Lower costs

SE integration in mobile devices can be expensive and subject to SE domain fees. By deploying the SE remotely, the NFC value chain will be shortened as fewer parties in the ecosystem need to be involved, leading to lower provisioning costs.

Enhanced security measures & improved risk management

Direct access to the SE enables instant fraud detection and allows immediate blocking of an application. Additionally, the computing power of HCE is higher than that on a mobile device. Enhanced security means better customer satisfaction and higher adoption in the long-term.

Multiple cards, EMV applications & payment schemes

Storage capacity on a physical SE is limited. Using HCE, storage is scalable and can be expanded to meet individual requirements and to support any card, application and payment scheme.

Compatibility with readers and POS

As the transaction emulates an EMV payment, no changes are needed to existing contactless terminals or the payment acceptance infrastructure.

HCE and Bell ID

Bell ID was ahead of the curve and one of the first to market with a HCE platform with the launch of Secure Element in the Cloud in June 2013. The technology enables credentials and information related to mobile services to be securely stored and the associated processes to be executed in a cloud environment. This removes many of the complexities and cost implications related to the deployment of secure mobile services. In September 2015, the solution was announced as the first to receive certification from three of the largest payment schemes globally.

We have worked extensively with some of the NFC industry’s most influential stakeholders, from issuing banks, international payment schemes and ‘Mobile Pay’ service providers, helping to bring cloud-based mobile payment offerings to market securely and efficiently. Public references include Eurobank, ANZ Bank and eftpos Australia.

To learn more about HCE and Secure Element in the Cloud, watch our short video.

Editor’s note: This blog was originally posted in November 2013 and has been updated in August 2016 for accuracy and new developments.