Verizon Ventures has invested in NFC technology company SimplyTapp. What makes this interesting is that SimplyTapp is a cloud-based service using Host Card Emulation (HCE) for the security element in Android phones.
Operators have traditionally supported the rival Single Wire Protocol (SWP) standard and Vodafone recently teamed up with Carta Worldwide. SWP puts the operator in the payment loop and they have sought a revenue share on the transaction.
The handset industry is relatively agnostic on which standard to support, but wanted to see some recompense for the development, testing and support of the technology. Operators were prepared to pay for SWP, but no-one has been prepared to pay for HCE.
The banking industry has favoured HCE, which kept the operators at arm’s length. Verizon’s investment in SimplyTap, which NFC World reports is the lead in a $5.9m funding round, shows support for the rival standard.
Verizon Ventures' Vijay Doradla joins the SimplyTapp board and said in his blog: “HCE can play a significant role in credential management with payments, offering the ability to create exact virtual representations of various electronic identity cards using only software. HCE may set the stage for a cloud-based credential management platform that could serve a host of diverse applications such as mobile payments, ticketing, and hospitality among others where any party can create a Near Field Communication (NFC) credential for the mobile device.”
The SimplyTapp middleware is aimed at developers who want to incorporate NFC into their apps. The HCE secure element can be used for payments, tokens, tickets and to unlock hotel rooms.
Verizon’s support for HCE will need to be translated into revenue for handset manufacturers through paying more for the handsets they buy. Alternatively, the financial institutions will need to pay the handset manufacturers directly: Apple is reported to earn 0.15 per cent per transaction from Visa for Apple Pay.
Missing this point completely, Shashi Verna, director of customer experience at Transport for London, told Mobile Europe that he blamed the mobile operators for holding back mobile payments on the tube. ®