Jörg SuchyJörg Suchy

Samsung Semiconductor Europe

Jörg SuchyAssociate Director / Smart Card & NFC Business Development

POWER OF PARTNERSHIPS IN HCE

HCE/Tokenization vs Secure Elements

Jörg Suchy

Content

• NFC and the Payment Landscape

• Three Years Earlier

• NFC solutions in Focus

• Conclusion

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NFC and the Payment Landscape

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Payment Card Security Upgrade

Source: Internet

Payment Card Industry targeted higher

security & offline transactions

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Fraud still exists

Source: Fraud the Facts 2013 – Financial Fraud Action UK

Lost and stolen cards can be

used in shops that do not have

Chip & PIN

Magnetic stripe

data used to make

fake magnetic

stripe cards for use

overseas in

countries yet to

upgrade to Chip &

PIN.

Card Industry mandate for

Chip and Pin has significantly

reduced the fraud level in Europe

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- Contactless cards are building the foundation for the usage of

NFC payment

- Security of the NFC system aligned with card payment

- No difference in product usage (online/offline)

- No increase in the business cost structure (newcomer fees)

Road to NFC Payment

Credit Card security = reference for NFC

Payment

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The Payment Network

- European Payment Industry conservative to invest in new

technology, due to ROI realisation

- Interchange fees of 0.2% for debit transactions and 0.3% for

credit will not allow PSPs to make structurally necessary

investments in innovation and security

Source: Visa Europe | Our response to the European Commission’s proposed regulation

of interchange fees for card-based payment transactions

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Three Years Earlier

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NFC Secure Element Race

Source: VISA – Wima 2011

Security is key for NFC success

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WIMA 2011 review

....At the event, Mark Selby, VP for Industry Collaborations at Nokia, told those

gathered that they’d all been a little preoccupied with doing the wrong thing for

some time.

Nokia went back and reviewed all of the data from its pilots and studies it had

done with partners. The result of this and conversations with leading analysts led

the company to conclude that collectively many had been looking at the wrong

things. This is why the company is busy promoting ‘open NFC’.

‘What we’re saying is there’s “open” and “secure”,’ explained Selby. ‘Secure

means there’s a secure element on the device. However, open NFC apps can be

very secure but they don’t need a secure element on the device.’....

HCE and Secure Elements

Source: http://www.wireless-mag.com/Features/11534/WIMA_2011_review.aspx

NFC success depends on combinations

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NFC Solutions in Focus

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HCE, Secure Elemets and ... more

Source: EMVco Tokenization Spec

Payment Security based on Storage Location

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NFC SIM Solutions/Combinations

Source: Different Internet Sources

High security level based on SIM Cards

Contact(less) solution with Mobile Application

Deutsche Telekom My-Wallet with MasterCard

Value Added Services to come

Support NFC enabled SIM-card and stickers

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- Trust of global payment schemes and Operators

- Worldwide acceptance network (online & offline)

- Growing number of acceptance locations

- Advanced security standard (EMVco, CC, RSA, ECC,...)

- Handset OS independent (compared with eSE)

- Based on Global Standards (EMVco, ETSI, 3GPP, GP, Java C)

- Complex registration process and SIM replacement

Long lasting technology – Handset OS independent

NFC SIM based

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SIM vs App Payment South Korea

Source: Bank of Korea

- IC based: May’13 0.7Bn Won Dec’13 1Bn Won

- App based: May’13 0.5Bn Won Dec’13 10.5Bn Won

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HCE Payment

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- Break up of historically business models

- NFC Handset OS dominated solution!!!

- Payment complexity shifted from Phone to backend

- Tokenisation concept well-known by payment industry

- TSM to change into TSP (Token Service Provider)

- Worldwide acceptance network (so far no offline)

- Growing number of acceptance locations

- Online transaction and battery on a must for HCE

HCE Payment

Source: Smart Payment Association

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- NFC SIM based approaches offer- established standards

- Hardware Security (online & offline)

- Handset OS independency (compared with eSE)

- World Wide Acceptance

- HCE Payment approaches- Accelerator of NFC Mass Market Adaption (new business models)

- Online transaction and battery on a must

- No mobile service: Multi-Token provisioning

- Increase security through HCE combined with SIM, TEE or Cloud SE

- World Wide Acceptance

Multi – Secure Elements?

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Is HCE the game changer for NFC?- HCE is not a game changer, it’s a value added solution for NFC

-Security is the key for NFC and the asset of HW secure

elements

Will HCE impact the HW secure element concepts?-HCE could impact the development of eSE , due to Handset OS

developments and less support

SIM vs HCE – who has an edge? -Most likely the combination of Secure Elements and preferred

user solutions will dominate future NFC implementations and

meet the needs for security

Conclusion

Security PLUS user convenience key for success

Jörg Suchy

Jörg Suchy

Associate Director

Smart Card & NFC Business Development

Tel: +49 6196 - 66 34 30

Mobile: +49 171 31 33 0 33

Email: j.suchy@samsung.com

Thank You!