The Royal Bank of Canada, an early adopter of wearable technology, is adding host card emulation (HCE) technology to the RBC Mobile App, enabling Android smartphone users to make contactless mobile payments through any carrier.
Prior to Google's support of HCE in its Android operating system, mobile wallet makers had to obtain each carrier's permission to use the phone's secure element for Near Field Communication payments. This prevented apps such as Google Wallet from supporting contactless payments on many carriers' handsets.
"Great technology won't work if it's too complicated," said Linda Mantia, executive vice president of digital payments and cards at RBC. "The only way to have a payment technology be successful is through ubiquity."
RBC began testing its technology with employees today, with plans for the pilot to run through the winter. Employees will initially pay with an RBC Interac Debit card, using Interac Flash contactless technology (Interac is Canada's national debit network).
So far, these tests are exclusive to Android devices. Mobile devices that run on other operating systems, such as Blackberry, embed the secure element in the smartphone; and Apple, which controls access to its NFC technology, has not announced plans for Apple Pay in Canada.
"Recent technological developments have given financial institutions greater control over their own strategic course in the mobile payments space," said Jordan McKee, a senior analyst at 451 Research.
RBC is also testing other alternatives to traditional NFC SIM-card based contactless payments. The bank is piloting a pair of wristbands that can execute contactless payments and access other basic banking functions. In one of the pilots, RBC is working with Bionym, which makes wristbands that can detect a user's heart patterns for authentication.
"The onset of wearable technology represents yet another opportunity for issuers to build out their contactless strategy in an innovative way without third-party intervention," McKee said. "RBC's approach, which involves both HCE and wearables, will serve to help it capitalize on contactless growth and increase education of contactless for end users."
The experimentation with wearables and biometrics is part of an effort to remove as much friction as possible from the payments process, Mantia said. "Our goal is to not complicate e-payments," she said.