NFC Times Exclusive: As 2014 unfolds, the NFC ecosystem appears as unsettled as ever, with embedded secure chips expected to compete with NFC SIMs in several markets to store applications, and Google throwing its weight behind an alternative that could eventually enable service providers to avoid secure elements altogether.
Google’s backing of host-card emulation in its latest Android operating system, announced in late October, is expected to get its first major tryouts in 2014, and major payment schemes are expected to offer some clarity on whether they will accept the security and performance of the technology for their brands. So far, it's only available on Google’s own devices supporting Android 4.4 for use with Google Wallet.
Host-card emulation, or HCE, enables banks and other service providers to host services in apps and credentials in the cloud, while making use of the phone’s NFC interface and growing base of contactless card terminals in the field. HCE potentially allows them to avoid working with telcos or other secure-element owners and being part of mobile operator-controlled wallets. But HCE technology is still maturing.