Google Inc. sent a few tremors through the payments industry when announcing its newest Android operating system can perform contactless payments without high-level access to Near Field Communication hardware.
No one could blame Doug Yeager, founder and CEO of SimplyTapp, if he were cheering Google on from the sidelines.
SimplyTapp, an Austin-based technology developer, created coding for Host Card Emulation, or HCE, in 2012 to run on modified Android devices. "HCE tricks the point of sale into believing it is a payment card, just like the secure element would," Yeager says.
Although Google does not have a business relationship with SimplyTapp, the companies can share code through open-source projects. Google explicitly says in a blog post that it uses Host Card Emulation in the latest version of the Android operating system.
"Neither Google nor SimplyTapp own or can use HCE exclusively for themselves," Yeager says. Google did not respond to inquiries prior to deadline.
SimplyTapp developed its technology to work through CyanogenMod, an open-source modified version of Google's Android operating system. CyanogenMod allowed developers to test software that could not be run on the official versions of Android.
"Google will come into play if they are hearing good things about a software through CyanogenMod," Yeager says. "I am sure Google knew how HCE would work, but it was not being done on an Android device."
The potential for HCE became a hot topic after Google included it in KitKat, the informal name of Android version 4.4, which runs on Google's new Nexus 5 handset and will eventually roll out to other Android smartphones.
SimplyTapp launched a test app called "Tapp" last year to prove HCE's usefulness, Yeager says. Before that, Yeager was already vocal about how storing payment credentials in the cloud would work as an alternative to accessing the secure element of a mobile phone handset.
Developers want HCE capabilities because "they would love to develop apps to operate within the current RFID [radio frequency identification] infrastructure for mobile payments," Yeager says.
Google's use of HCE technology is significant because it could potentially allow the company to overcome a hurdle set up by mobile carriers such as Verizon Wireless, which have blocked the NFC-based Google Wallet's access to the NFC secure element on handsets.
Currently, SimplyTapp is working with Royal Bank of Canada on some mobile banking and payment apps, but it is mostly waiting to see how HCE spreads it wings through Google's Android operating system, Yeager says.
"We position ourselves as a vendor for HCE, but there is nothing beyond the KitKat news to share at this time," Yeager says. "Mostly, we will be addressing remote storage of credentials and viewing HCE as giving NFC a second chance at the point of sale."
SimplyTapp supports the open-loop concept, from magnetic-stripe cards to NFC contactless technology. However, the company "could easily leverage to something else, providing dynamic remotely hosted credentials," Yeager adds.