NFC Device Shipments Expected to Exceed 1 Billion by 2018

| March 24, 2014

The NFC Forum has issued a statement outlining its position on host card emulation (HCE). The industry body confirms that the use of HCE does not conflict with its own standards but cautions that "service providers need to evaluate and determine the best place to store credentials for their solutions, keeping in mind the trade-off between security risks and convenience."

The full statement reads:
With 500 million NFC devices in the market this year[1], and annual shipments expected to exceed 1 billion by 2018[2], the momentum for NFC continues to build at a rapid pace. As more and more NFC devices enter the market, it is vital that consumers have immediate opportunities to experience the ease and convenience of NFC for a wide range of daily uses.
 
We view Host Card Emulation (HCE) as an exciting development for the NFC market because it provides an additional means by which to perform NFC transactions. With HCE, transactions take place using credentials stored in the cloud or on the host processor of the NFC-enabled mobile device rather than a tamper resistant Secure Element, such as an embedded security chip, SIM, or microSD card.
 
As the industry consortium dedicated to the global deployment and adoption of NFC services, the NFC Forum sees HCE as a promising addition to the portfolio of NFC solutions that could potentially accelerate market growth.
 
HCE is supported by NFC Forum specifications, including the NFC Controller Interface (NCI) specification, which in combination with other standards, such as ISO 14443 and JIS X 6319-4, enables HCE implementations.
 
Service providers need to evaluate and determine the best place to store credentials for their solutions, keeping in mind the trade-off between security risks and convenience. Each model has its merits depending on the use case. For instance, use cases that rely today upon bar codes could immediately benefit from HCE without raising new security concerns. However, transactions currently relying upon tamper resistant secure storage of assets would need more thorough consideration. We’re encouraged by the steps being taken by providers of HCE-based solutions to ensure that their offerings meet consumer and business demands for latency and security.
 
The NFC Forum will continue to monitor new developments and maintain our policy of being responsive to marketplace needs in our specification development work.
 
Paula Hunter
NFC Forum Executive Director

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