‘Tap &#038; Go’ Contactless Cards Is The Next Big Thing For India’s Cashless Economy
As ‘tap and go’ payments are set to become the new normal, payments technology companies like Visa and Mastercard have introduced contactless cards to ensure easy on-the-go payments in India. Dubbed as one of the most secure ways to make payments, contactless cards, also known as Near Field Communication-enabled cards, are ushering a new paradigm of innovation in the payments space. Interestingly, a recent news report indicated that in a bid to push digital transactions and expand the use of cards beyond payments, the Indian Ministry of Finance issued a letter to bank chiefs in India to start issuing these NFC-enabled or contactless cards. In a similar move, global payments leader Visa announced that over 20 million Visa contactless cards have now been issued in India, since the launch of its first contactless card in 2015.  This is part of the attempt to push contactless payments in India, and the company revealed that the acceptance infrastructure for such cards has crossed one million terminals across India. The move is also aligned with the Indian Government’s objective of achieving 30 billion digital transactions. The FinMin also asserted that India has the right infrastructure for contactless payments with most point-of-sale terminals accepting contactless cards. “In a little over three years, along with the clients, we have been able to promote the benefits of contactless cards to over 20 million consumers across India. Besides the significant push in building awareness, we have helped expand India’s contactless acceptance infrastructure to over one million points. Across the world, contactless cards have proven to be a significant catalyst in improving consumer stickiness for digital payments and we expect India to be amongst its biggest adopters in months to come,” TR Ramachandran, Group Country Manager for Visa in India and South Asia said. According to the latest data, over 3.3 million merchants in India now accept cashless payments through multiple payment options. Contactless card payments help realise the Government’s vision of Digital India and achieve digital transactions target. The government’s push towards digital payments was further strengthened with a directive in July 2018 to consider adding NFC (contactless) capabilities, in addition to the EMV chip feature, for all cards being upgraded as part of the RBI mandate to replace all existing magstripe cards by December 2018. How Do Contactless Cards Work? Contactless cards are based on RFID technology The payee has to hold the card near a payment terminal to make a transaction Since these cards can be used at most PoS terminals, there is no requirement for additional infrastructure by clients or financial institutions Visa contactless cards have an embedded antenna and microchip, that allows the card reader to read it at checkout Users will have to tap or wave the card over a secure reader. For Visa cards, the transaction is processed through Visa’s global, secure network, VisaNet, which processes all Visa transactions Advantages of Contactless Cards Contactless cards can considerably make the payment experience smooth, shortening checkout time from close to a minute to just a few seconds. Consumers get the convenience of simply tapping and paying for transactions. “With 20 million contactless cards powered by Visa today in India, we have reached critical mass, adding to the building blocks of the cashless payments infrastructure of the country. Thanks to the government’s push towards enabling contactless payments, we expect this number to significantly increase in the months to come,” adds Ramachandran. Across the globe, over 1.5 billion contactless payment cards are expected to be issued by the end of 2018 and contactless payments will account for 50% of all payment cards shipped. Presently, there are more than 1 billion debit and credit payment cards in circulation in the country today, and with the contactless cards, Visa is gradually shifting the market towards contactless payment cards.
As ‘tap and go’ payments are set to become the new normal, payments technology companies like Visa and Mastercard have introduced contactless cards to ensure easy on-the-go payments in India. Dubbed as one of the most secure ways to make payments, contactless cards, also known as Near Field Communication-enabled cards, are ushering a new paradigm […]
To push digital transactions and expand the use of contactless cards, FinMin urges bank chiefs to issue contactless cards for digital payments
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Richa Bhatia is a seasoned journalist with six-years experience in reportage and news coverage and has had stints at Times of India and The Indian Express. She is an avid reader, mum to a feisty two-year-old and loves writing about the next-gen technology that is shaping our world.