It's been an eventful month for SimplyTapp Inc. The startup, which says it created host card emulation, just saw the technology be deployed in the new Android 4.4 KitKat OS. 

Today, the company announced it has raised its Series A funding round, led by Lightspeed Venture Partner with continued support from Blue Sky Capital.

A key advantage of the HCE platform, SimplyTapp said, is its ability to leverage existing POS hardware infrastructure without requiring merchant adaptation. And the platform is open to developers and card issuers, which allows for innovation in mainstream card issuance to go beyond PayPal and Stripe. HCE bypasses network operator SIM cards and allows the completion of mobile payments at point of sale terminals.

Through secure and open APIs, SimplyTapp enables developers to include HCE payments in their applications; the service automates the process of securely storing issuer's card credentials in the cloud. More than 100 developers are using the company's SDK tools.

SimplyTapp CEO Doug Yeager took a moment to answer emailed questions from Mobile Payments Today.

MPT: What does this news mean for HCE and its adoption?

Doug Yeager: Our technology leverages HCE. We do not own it, nor does anyone else, but it is free to use now. Our plan is to use HCE as a method that allows existing issuers to deliver card credentials to existing payment infrastructure without having a relationship with a mobile network operator. That is a very liberating feeling for most issuers who have been locked out in recent history, so we expect lots of growth leveraging HCE, and we expect to be close to the center of it.

MPT: What will be the growth triggers for HCE? And can you discuss network certification?

DY: Card network approval and direction is a primary trigger for open loop payments. Closed loop and proprietary applications are free to grow — please do, it helps pressure the open loop guys! Now there is no technical blocker thanks to HCE, so the question becomes what is the "approved method to leverage it" for the card networks? We expect to play a role in that as we have been working on that subject for two years now, and I believe we have some great input to the subject.

There are some fundamental aspects of the "old" SE model that probably won't change much, which have to do with managing the life-cycle of card credentials. That part is all good and can remain unchanged. But then there are new aspects of using HCE to perform a transaction that will force authorization method changes. For example, keep your eyes on "solving the relay attack" problem — it should be a hot topic.

With HCE, it is not practical to create a cryptogram in the current defined way because it would require either the static keys to the card be on the mobile device, or a network connection to a remote SE that was live at tap time (creating a terrible tap-and-hover user experience). So, probably expect two separate authorization steps to fix the "relay attack" problem separate from the card cryptogram generation — this represents a fairly complex change to authorization host processing.

Once card networks find solutions for these issues, I would expect certification processes to be available, but right now there aren't any that are defined by any of the networks.

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