A recent story revealed that Windows 10 on phones will be receiving an overhaul for NFC transactions. The Secure Element in SIM cards from some carriers will continue to be supported, but users will no longer be forced to use such a SIM in order to use NFC payment terminals.
Microsoft will be implementing something call Host Card Emulation with Windows 10 on phones. Google added support for HCE in Android 4.4, removing a carrier requirement that phones be equipped was a Secure Element or an Enhanced SIM. HEC supports credit, debit, loyalty cards, smart cards, and transit passes. Essentially any card which can be read via NFC can be emulated by software, without special SIM cards needing to be present in the device.
There are no details as to how this will be implemented however. The above slide indicates that the native Wallet will function on its own (as it was supposed to have done in 2012 with Windows Phone 8) while also supporting the non-existent third party payment apps, such as CurrentC (which uses a QR code system rather than NFC) or Apple Pay, should it ever expand from Apple devices.
Unless Microsoft fully implements their own solution, all of this means nothing, aside from the requirement that consumers are able to obtain a special SIM card which most carriers around the globe do not use, nor do they have any intention of adding it unless they have to in order to support a new iPhone. Microsoft will not hand just anyone the APIs for creating an NFC wallet, only select partners receive that access.
Further adding to my initial confusion is this video, which appears to show a third party app on a Lumia 1520 being used for tap to pay. At first glance at least.
Wait… Let us take a closer look.
zNFCPayments? What on Earth is this? If you have used Windows 10 Technical Preview, the first few builds had an app called zStore, which is now labeled as Store (beta). This means Microsoft is not only overhauling the APIs in the OS and adding HCE, it is also building an app, which may be included in a future Tech Preview build on the phone side.
However, it’s possible that carriers will derail this, making it an app that only some have access to, but not others, much like the Google Wallet debacle played out until Google bought SoftCard (and snatched away the only Windows Phone app for making NFC payments). We should know more about this soon.