Home Tech Talks Insights NFC Payments Are Catching Up in India

NFC Payments Are Catching Up in India

5170
0
SHARE
NFC Payments Are Catching Up in India

With the introduction of Samsung Pay in India, it is quite evident that India will be the centre of their focus on NFC payments. The previous year, the demonetization move completely derailed cash payment systems that were running in our country. It forced everyone to take up smarter means of paying – like digital wallets and net-banking. Near-Field communication (NFC) payments are not to be left behind.

Introducing NFC

So what is NFC? NFC is an acronym for Near Field Communication – which is technology allowing mobile phones to detect each other and then enabling them in close proximity to communicate without the need for an internet connection. It’s easy, fast and works automatically.

An NFC chip operates as one part of a wireless link. Once it’s activated by another chip, small amounts of data between the two devices can be transferred when held a few centimeters from each other.

Introducing Samsung Pay

With the increased traction in NFC support in modern day mobile phones, payment systems are also adapting to it. Samsung Pay is one such system. Users’ card details are securely stored on to the handset and can be used to as a one touch payment system to securely transfer funds.

Currently, only high-end Samsung smartphones like Galaxy S6 Edge+, S7, S7 Edge, S8 and S8+ possess this type of payment system. Now, the company has changed the way they include NFC based payment on their device lineups, by enabling inbuilt Samsung Okay on their latest mid-range devices in India like the Galaxy J7 Pro and J7 Max.

NFC on other phones

LG also has a payment system like this, however LG doesn’t require an NFC enabled device to initiate the payments. Apple also is no stranger to the mobile payment market after it introduced Apple Pay in the US and Europe.

However, it is Android Pay which is being anticipated the most after it Google announced their intention to introduce Android Pay by 2017, through Government’s UPI (Unified Payment Interface) which has been lauded for allowing transaction between two entities in the simplest manner without letting out any details.

NFC Payments Are Catching Up in India

Much like Samsung Pay, Android Pay will also work through a virtual repository of your debit and credit cards. However, unlike Samsung, Android Pay will have UPI integration, therefore there are no hassles with getting banks to register on this app. Even though NFC technology in India is not very advanced, it will become bigger with the launch of Google’s own wallet. It might also make way for other services like Apple Pay to India.

Challenges ahead

Major banks like ICICI and HDFC have launched services which enable NFC payment system and also UPI payment system. SBI and Axis banks are also looking to join the fray. According to a research out all the transactions that occur on Point of Sale machines, 60-70 percent are for transactions below Rs 2000. If a pin verification is removed for these transactions a lot of time can be saved. The quick check-out feature is making retailers see a “queue-busting” capability in this product. The challenge for banks, however, is to bring the behavioral shift.

The other challenge of course, would be to ensure everyone has NFC based smartphones – something lacking in the older models. Which is why it might be time for consumers to upgrade.