Tokenization. I ponder a few thoughts. If the assumption is that the infrastructure behind the merchant terminal is much like it is today, then we must talk about tokens that preserve the information a merchant now derives from that 15 or 16 digit number called the PAN, printed in the clear on the front of our payment cards. The first 6 digits are what is called the BIN or Bank identification number. It tells the merchant a lot about the card like: is it debit or credit card, was it issued by a Bank the merchant has a special arrangement with or is it one of those corporate cards the merchant must provide line item detail to the Issuer. Finally there is the last digit, the right most character, that is used too. It is a check digit that confirms that the number read is correctly read.

Tokenization need to preserve all those characteristics if it is going to work without wholesale changes to the merchant and acquirers systems.

Then of course HCE is predicated upon the assumption that the dialogue between the mobile phone and the merchant device will adhere to the ISO 7816, 14443 and EMV standards.

Finally when the radio is off and the phone cannot talk to the cloud, all the data needed to process the transaction such as Expiry Date, PAN, Trach 1 equivalent data and cryptogram are all in the phone. Or there is no way to pay with your phone and you have to pull out your trusty card anyway.

Unless of course you implement more than just HCE and the Secure element in the cloud.