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NFC based payment: how will it develop relative to upcoming alternative approaches?. Hong Kong | March 2014. About UL…. Safe products Safe buildings Safe workplaces Safe water, food & health Safe, clean energy. Promoting safe living and working environments. Certify Validate Test

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nfc based payment how will it develop relative to upcoming alternative approaches

NFC based payment: how will it develop relative to upcoming alternative approaches?

Hong Kong | March 2014

about ul
About UL…

Safe products

Safe buildings

Safe workplaces

Safe water, food & health

Safe, clean energy

Promoting safe living and working environments

Certify

Validate

Test

Inspect

Audit

Advice & Educate

We

Be the best, and achieve

meaningful size in all that we do

about ul transaction security
About UL Transaction Security

Working towards a safer world by being the number one independent center in Transaction Security Technology

  • Unrivalled expertise across industry domains
  • State-of-the-art services/products portfolio
  • Recognition in our local markets – Thought Leadership
  • Scalable offering
  • Service offering
ul supports worldwide many mcommerce initiatives with advisory services
UL supports worldwide many mCommerce initiatives with advisory services

Weve

ISIS

  • “UL staff has been extremely valuable to ISIS in supporting the testing and integration of our TSM.”
  • “.. the UL team always considered any issues beyond just the technical aspects and looked at the wider commercial and customer implications, which was and is invaluable for us.”

Customer References

  • “The effort from the UL team has been crucial for our project. Their competence, attitude and hard work have been inspiring for us all.”
  • “The strategic workshops hosted by UL TS at the start of our project were crucial to create a common vision and helped us to speed up the project”

DNB & Telenor

Mobiel Betalen Nederland

agenda
Agenda

Alternative approaches to NFC-based payments

Alternative to SE-based NFC implementation

Impact and Outlook

qr bar codes remotely based
QR/Bar codes: remotely-based

Trigger redirects payment

transaction to e-money transfer

E-Money Service

Internet

Lifecycle management

Authentication and payment transaction (e-money transfer)

Merchant’s physical shop

Internet

bluetooth low energy remotely based
Bluetooth Low Energy: remotely-based

Trigger redirects payment

transaction to e-money transfer

E-Money Service

Internet

Lifecycle management

Authentication and payment transaction (e-money transfer)

Merchant’s physical shop

Internet

ble how does it work user experience perspective
BLE: How does it work?User experience perspective

The Beacon network at the store is aware that consumer is in the area and “checks him in” after he approves so.

Proximity marketing when consumer passes nearby B&M store

Consumer is checked in at the store

Cashier submits payment from the POS by selecting customer from list of nearby checked-in customers

As the consumer enters a micro-region at the store, he receives personalized deals or coupons

Consumer approaches cash register to choose payment scheme and give verbal approval for payment

Cashier verifies identity of consumer using visual inspection.

Customer chooses payment scheme

POS detects presence of customer nearby. List of customers nearby is re-sorted

The POS is equiped with a beacon as well

ble business opportunities
BLE: Business opportunities

Proximity marketing

Specific directions

Indoor mapping

Micro Location-based notification

Customized marketing

“Contactless payments”

ble versus nfc
BLE versus NFC

BLE and NFC are both short range wireless data transfer technologies, even though the range at which BLE operates is much longer.

Tens of meters compared to a few centimeters for NFC

  • Between both technologies there are minor differences in power consumption
  • Whereas NFC is focused on one-to-one data exchange, BLE allows for multiple simultaneous connections
  • Both BLE and NFC utilize AES-128 bit data encryption and pairing modes

The principle underlying use for both technologies is different

traditional nfc
“Traditional” NFC

Handset

Secure Element

Host CPU

Scope

Read / Write

mode

Peer 2 peer mode

Card emulation

mode

Tag

Handset

Terminal

se based nfc proximity based
SE-based NFC: proximity-based

SEI-TSM

SP-TSM

Lifecycle management

NFC

Merchant’s physical shop

challenge for se based nfc card emulation sei sp
Challenge for SE-based NFC Card Emulation: SEI ≠ SP

Physical cards:

SEI = SP

NFC Card emulation:

SEI ≠ SP

Card vendor

Supply contract

SEI

BPO

Supply

contract

Supply

contract

Perso bureau

Card vendor

BPO

BPO

SP

SP

SEI TSM

SP TSM

host based card emulation
Host-based Card Emulation

Host CPU

Android OS

Android device

Contactless smartcard reader

Select AID “x”

NFC Controller

Secure Element

Select AID “y”

hce takes place in environment that is not secure the host
HCE takes place in environment that is not secure: the host

Host CPU

Android has in-built security mechanisms (e.g. sandboxing). These may be over-ruled in case the device is rooted.

Android OS

Android device

Device rooting

Select AID “x”

Contactless smartcard reader

NFC Controller

Secure Element

hce cloud solutions
HCE & Cloud solutions.
  • Device Authentication.
  • Key Management.
  • Tokenization.
    • Token storage.
  • PCI requirements.
  • Host physical and logical requirements.

App 1

App 2

Wallet

hce accelerates the nfc ecosystem
HCE accelerates the NFC ecosystem
  • NFC Ecosystem is getting ready to scale up:
  • Device support
  • Consumers are used to access services from mobile devices
  • Infrastructure is growing

SE access discussions are however delaying development, while many services do not require top-level security from day one

With HCE SPs have the freedom to choose for the HW security or not

hce impact on nfc ecosystem
HCE impact on NFC ecosystem

Impact on

Explanation

SPs

  • Are given an additional degree of freedom
  • The role of the SEI is removed (or much lighter) for HCE services

SEI (& SEI TSM)

TSM

  • The role of (SP-)TSMs may change from the personalization of an applet to the personalization of an HCE service.

App development

  • Enhancing the security of HCE applications
  • Existing wallet and payment apps to be updated
example 1 hce for open loop high value payments
Example 1: HCE for open-loop high value payments

Pro

Con

  • Convenience
  • Reduced costs
  • Less players + no SE issuers
  • Decreased security
  • High potential losses
  • Certification unclear (yet)

SP’s compromise point-of-view

example 2 hce for low value payments closed loop systems transit access control
Example 2: HCE for low value payments, closed loop systems, transit, access control

Con

Pro

  • Decreased security
  • Low potential losses
  • Compatibility
  • Convenience
  • Reduced costs
  • Less players + no SE issuers

SP’s compromise point-of-view

summary
Summary

Alternatives approaches are available, all bring their own challenges.

Cash and Physical cards are still the most commonly deployed