Coming soon:
‘Contactless’ cards to ease payments
MUMBAI: NFC or
'contactless' payment cards, which can complete a payment transaction in
one-tenth of the time traditionally taken to conduct electronic transactions,
will soon be available in India. ICICI Bank has finalised launch of contactless
debit and credit cards next month. NFC (Near Field Communication) cards allow
payments can be made by merely waving the card in front of a scanner instead of
requiring them to be swiped or dipped into a card reader.
Speaking to TOI, Rajiv
Sabh arwal, ED, ICICI Bank said "We expect
this to be one of the biggest game changers in the payment industry. The key
advantage is that, this card can ensure the transaction gets completed in one
tenth the time taken by an existing credit card. Also since the card need not
leave the customer's hand, the level of security is higher."
Present regulations require that all cards need to be authenticated by punching a pin to complete the transation and as of now ICICI Bank's NFC cards will need to be authenticated with PIN. However, RBI has said that it will review this requirement for small transactions.
In an interview with ToI in August, RBI governor Raghuram Rajan had said that the central bank was exploring the possibility of allowing small-value transactions on a simpler basis, provided the provider takes full responsibility of misuse beyond a certain point.
Present regulations require that all cards need to be authenticated by punching a pin to complete the transation and as of now ICICI Bank's NFC cards will need to be authenticated with PIN. However, RBI has said that it will review this requirement for small transactions.
In an interview with ToI in August, RBI governor Raghuram Rajan had said that the central bank was exploring the possibility of allowing small-value transactions on a simpler basis, provided the provider takes full responsibility of misuse beyond a certain point.
ICICI Bank will
introduce this cards in a Mumbai, Bangalore and Hyderabad. It has already tied
up with 200 merchants in these cities and in Gurgaon. The shops include retail
and restaurant chains. The bank will issue both debit and credit cards and will
tie up with both Visa and MasterCard for their products payWave and s Paypass
respectively.
"In Australia,
where NFC was recently introduced, in a matter of months half the market
converted to NFC cards because of the convenience. There is a strong pull for
this kind of a product from the merchant side as they can service many more
customers in the same time. Given our distribution capabilities we expect to
make a big difference," said Sabharwal. In markets where NFC is being used
signature or pin validation is waived for low-value transactions making it the
fastest form of payment. " Today
many believe that cards are to used only for high value payments and they use
cash for low value transactions. With NFC even small value payments can be made
by card and these transactions can be brought into the formal channel,"
said Sabharwal.
The bank has launched
contactless cards in a tie-up with the Delhi Metro and will launch cards for
metros in other cities as well. Those who buy the Metro pre-paid card can use
the instrument as a regular credit card elsewhere. The NFC cards that will be launched
has the capability of being used for payments in all metros if there is an
agreement with the bank. Last month ICICI Bank and Axis Bank had joined hands
with the Ministry of Highways to introduce electronic toll collection in cars.
Although this service is also contactless it is in the form of a device in the
car and its use is limited for toll payment.
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