HomeNewsWhat is NFC? Is it the future of payments

What is NFC? Is it the future of payments

Here we dissect and discuss the nuances of contactless payment and its presence in India.

Ever saw a person at a shop just tap his card on the point of sale terminal and authenticate a transaction in a second without the need of entering the pin and wondered what sorcery is that? Well, that sorcery is what we call contactless payment!

So, what exactly is it?

Like the name suggests contactless payment is a mode of transaction where instead of swiping or ‘dipping’ your card, the information is transferred via NFC (near field communication). This NFC is not only housed inside your cards but also your phones! Enabling them of contactless payment as well. You also need a contactless payment-enabled terminal for this facility and can be identified by this symbol.

NFC payment

How does it work?

Well in case of cards, all you have to do is bring your NFC enabled card near a compatible POS terminal with the amount already entered and voila! The transaction is complete. In the case of smartphones, you must have an NFC enabled device with a payment app supported in your country. Apple Pay is a great example.

It was launched along with the iPhone 6 and was extended to the apple watch making contactless payment a breeze. The curious might wonder about the powering of these tiny chips inside your card as there is no battery. Well, the power used by these NFC chips is so small that it is induced by the magnetic waves emitted by the POS itself! Neat right?

Who all are the players?

As mentioned above, apple pay is big in the USA. All it needs is an apple pay enable device which majority of us have and the wallet app. Google pay is a notable contender too. A common factor in both the mobile solutions is the presence of biometric authentication either via Face Id, Touch Id or basic fingerprint. In terms of cards, Visa with its PayWave and Master Card with its ‘tap and go’ are pretty popular.

How safe are they?

Mobile solutions need biometric authentication but what our cards? Well to tackle this, the cards have a maximum transaction limit via contactlessfor example, the visa PayWave has a limit of ₹2000 in Indiabeyond which you need to enter your security pin. These cards are also equipped with multi-layered encryption for better security but for extra security, you can always purchase an RFID blocking card sleeve or wallet.


What’s the scenario in India?

In India, hundreds of POS terminals are NFC enabled and banks like SBI issue visa PayWave cards for contactless payment. In terms of mobile transactions, currently, apple pay and google pay(contactless) are not available however ICICI Pockets is the first app in India to offer this facility and is still available. Contactless payment is the future for transaction convenience and India is surely not left behind and is progressing healthily.


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