RBC Goes Live with HCE-Based M-Payments (Sept. 17, 2015)
Royal Bank of Canada this week introduced a new—and still somewhat rare—approach to connecting its customers to its RBC Wallet mobile payments service via host card emulation (HCE), so it works with any NFC-based Android handset, regardless of its brand or the user’s wireless carrier. The Toronto-based bank claims it’s the first major financial institution in North America to go live with an HCE-based m-payments service, after launching a pilot last December.
HCE leverages a method of card emulation Google introduced in 2013 with Android 4.4, so any Android application can emulate a card and talk directly to the NFC reader. HCE, approved last year by Visa and MasterCard, promises a quicker, easier path for organizations to extend m-payments to consumers, by encrypting account holders’ confidential payment data and storing it in the cloud, instead of on a secure element within a handset. This bypasses the need for card issuers to forge agreements with wireless carriers or other third parties to provision credentials within the smartphone itself, saving time and money.
RBC customers with any NFC-enabled Android handset are able to download the HCE-based service the bank is calling RBC Wallet powered by RBC Secure Cloud, and enroll debit and credit cards to pay at contactless-enabled merchant locations. RBC says its long-term goal is for the RBC Wallet to work on all phones, with all carriers, financial institutions, card products and merchants. It also plans to add services, such as P2P, loyalty and coupon redemption, and purchasing, reloading and paying with gift cards.
The HCE approach could help expand the audience for m-payments, but the bank still has a long way to go before achieving such ubiquity, says Christie Christelis, president of Toronto-based payments research firm Technology Strategies International Inc. According to a report Christelis published this week, contactless payment is on the rise in Canada, but NFC handset penetration there is only around 18 percent and just about 25 percent of Canada’s total merchant locations support contactless payments. “We’re still about five years away from mobile payments being mainstream in Canada,” Christelis tells Paybefore.