The
world's largest smart card producer Gemalto is seeing a growing trend of
banks using contactless mobile technology, or near field communications
(NFC), which is not dependent on telecom companies.
Operator-independent payments are possible because of a technology
called Host Card Emulation (HCE) where cardholder information is stored
remotely in a cloud instead of within a secure SIM card provided by a
telecom provider.
The cardmaker's stance on contactless payments is significant considering that Gemalto sells billions of SIM cards. It shows that there are rising opportunities for the company in the finance space outside the mobile world. In the first quarter of 2015, the company reported revenues of 686 million euros (about $830 million). Revenues from payment and identity segment overtook mobile revenues for the first time at 369 million euros (over $445 million), or 54% of the total company's revenue.
One big revenue generator for the company in the banking space is the shift in payment cards from magnetic swipe to EMV (chip cards). In the US, close to 10 crore cards are being replaced while in China there are around 50 crore cards being replaced with EMV. "In India, too, replacement of magnetic swipe with EMV has begun with credit cards and is also slowly happening in debit cards," said Atul Singh, director, Gemalto India, in charge of banking, transport and telecom solution.
The move from mag-stripe to EMV and to have smart cards for government-based ID programmes has meant that Indians are likely to hold multiple Gemalto cards and not just one in their mobile.
Compared to until a year back when Gemalto was strongly supporting NFC payments where the mobile operator plays the role of a 'trusted service manager' (TSM) and manages details normally present in a payment card, the company is now fully supporting HCE by providing tokenization solutions. Tokenization enables transactions to be completed without transferring cardholder information through the network.
"Until last year, if you were talking about NFC payments, you needed your mobile operator to provide the special SIM that could store the Visa or MasterCard applet. We were the leaders in this service and we had built data centers to support this," said Singh. The company has enabled several banks across the world to move to NFC payments using this platform.
Singh added that the game had slightly shifted after MasterCard and Visa started support for HCE. "Banks are now looking at this solution where they can still offer tap and pay using the mobile but without depending on the operator," said Singh. He added that while a hardware-based security was the best HCE had picked up over the years, perhaps both technologies would survive.
The cardmaker's stance on contactless payments is significant considering that Gemalto sells billions of SIM cards. It shows that there are rising opportunities for the company in the finance space outside the mobile world. In the first quarter of 2015, the company reported revenues of 686 million euros (about $830 million). Revenues from payment and identity segment overtook mobile revenues for the first time at 369 million euros (over $445 million), or 54% of the total company's revenue.
One big revenue generator for the company in the banking space is the shift in payment cards from magnetic swipe to EMV (chip cards). In the US, close to 10 crore cards are being replaced while in China there are around 50 crore cards being replaced with EMV. "In India, too, replacement of magnetic swipe with EMV has begun with credit cards and is also slowly happening in debit cards," said Atul Singh, director, Gemalto India, in charge of banking, transport and telecom solution.
The move from mag-stripe to EMV and to have smart cards for government-based ID programmes has meant that Indians are likely to hold multiple Gemalto cards and not just one in their mobile.
Compared to until a year back when Gemalto was strongly supporting NFC payments where the mobile operator plays the role of a 'trusted service manager' (TSM) and manages details normally present in a payment card, the company is now fully supporting HCE by providing tokenization solutions. Tokenization enables transactions to be completed without transferring cardholder information through the network.
"Until last year, if you were talking about NFC payments, you needed your mobile operator to provide the special SIM that could store the Visa or MasterCard applet. We were the leaders in this service and we had built data centers to support this," said Singh. The company has enabled several banks across the world to move to NFC payments using this platform.
Singh added that the game had slightly shifted after MasterCard and Visa started support for HCE. "Banks are now looking at this solution where they can still offer tap and pay using the mobile but without depending on the operator," said Singh. He added that while a hardware-based security was the best HCE had picked up over the years, perhaps both technologies would survive.
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