Mobile Payments: Why SE in the Cloud?

David Orme
David Orme - Chief Executive Officer
6 June 2013
EMV in the cloud

As the debate regarding the best way to provision near field communication (NFC) services continues, ownership of the secure element (SE) is still a major barrier to progress.

Or is it?

The long discussions between banks, mobile network operators, handset manufacturers and service providers regarding who should ‘own’ the SE and who should manage the access rights, has meant that consumers are still waiting for widespread mobile payments solutions to hit handsets and app stores.

But there is another way…

Today, EMV (or secure element/SE) in the cloud is no longer a theoretical concept but a tried and tested option for the NFC marketplace. The capability it offers will bring significant benefits to many NFC market participants including cost savings and increased control and security.

By moving the SE to a remote environment (the cloud), the intricacies and costs of managing a physical SE can be bypassed. The benefits of SE in the cloud are numerous – here I share with you my top five reasons to consider this form factor:

1. Independence and direct control

Application developers and service providers do not have to relinquish control of their product. By deploying services to the cloud, no intermediaries are necessary to access the SE. This narrows the gap between application issuers and customers, ensuring a consistent brand and user experience across all available NFC services.

2. Easier integration with third parties

Being in control of the SE allows easy integration with any third party provider and any business model, on your terms. These include mobile network operators, NFC device manufacturers and trusted service managers (TSMs).

3. Lower costs

SE integration in mobile devices is expensive and subject to SE domain fees. By deploying the SE in the cloud, the NFC value chain will be shortened as fewer parties in the ecosystem need to be involved; this leads to lower provisioning costs.

4. Greater security and improved risk management

Direct access to the SE enables instant fraud detection and allows immediate blocking of an application. Additionally, the computing power of an SE in the cloud is higher than that on a mobile device. This offers the option for more advanced on-device risk management. Enhanced security means better customer satisfaction and higher adoption in the long-term.

5. Multiple cards, EMV applications and payment schemes

Storage capacity on a physical SE is limited. In the cloud, storage is scalable and can be expanded to meet individual requirements and to support any card, application and payment scheme. The greater the array of choices available, the more options for developing and expanding the solution in the future.

Additionally, for those worried about connectivity issues, SE in the cloud can also pre-authorise payments, allowing consumers to make transactions even when a connection to the server cannot be established.

Ultimately, SE in the cloud is about control. Control of costs, security, partners and, most importantly, management of your solution’s position in the value chain. Players in the NFC ecosystem don’t want to be strong-armed into agreements with other companies because it is ‘necessary’; mutually beneficial and productive relationships will drive this ecosystem forward and offer genuinely valuable services to consumers.

Interested to learn more about SE in the cloud? Watch our video or get in touch.

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