Contactless card payments are usual payment transactions that require no physical contact between the consumer payment device like physical point-of-sale (PoS) terminal. In a contactless payment transaction, the consumer holds the contactless card or device in close proximity (less than 2-4 inches) to the merchant PoS terminal and the payment account information is communicated wirelessly through NFC & RFID (Radio Frequency Identification) as like Fastags NETC payments.
Contactless card is a state-of-the-art debit card which facilitates you with faster way to pay for smaller purchases, currently limited to maximum of Rs.2000/- at participating merchants in India. Instead of dipping (or swiping) your card at the billing counter, simply wave/ tap your card on the contactless Point of Sale (PoS) terminal and pay without entering a PIN.
These cards can be used at merchants where Near Field Communication (NFC) enabled terminals have been installed. The cards do not require entry of PIN at the terminal.
Contactless Cards are developed to offer vendor agnostic, scalable, inter-operable, secured, user friendly and cost effective ecosystem of low value payments to facilitate building a cashless transaction environment.
The same technology—an EMV enabled card and NFC technology—can also be used to deliver contactless ATM withdrawals. Contactless cards use the same secure technology as it is used in any chip card.
Contactless payment technology is a feature that can be added to any payment card product (e.g., credit, debit, prepaid).
Mobile device enabled with Near Field Communication (NFC) technologies can be used for contactless payment. Currently Samsung Pay, Amazon Pay, Apple Pay etc. are the services
Why Contactless cards ?
Contactless payment cards offers the unique proposition of One Card for all Payments. This card can be used for transit payments (Bus, Metro and Cab etc.), toll, parking, small value offline retail payments as well as normal day to day retail payments. This could be also helpful in Government of India new initiative National Common Mobility Card (NCMC).
- To provide a mechanism for including Low Value Payments (LVPs) within the gambit of electronic payments.
- To deliver a product that addresses the concerns of Indian customers taking into consideration the Indian Banks & Merchants.
- To motivate Indian customers to switch from cash to electronic payments.
Who can use Contactless cards ?
Contactless cards capability brings non-cash payments to smaller, more routine transactions. Neither customers nor merchants want a daily newspaper to be purchased with a card that has to be inserted into a card reader and validated with a signature or PIN. But with ‘tap-and-go’ contactless payments, it becomes a lot more appealing.
It is easier, faster and more convenient for both consumer and merchant, and it reduces cash costs. Card schemes have ensured that service charges to the merchant are proportional to the typical value of the transaction.
- Consumers like the speed and convenience of contactless payments. They no longer need to swipe their cards or carry cash for lower value transactions.
- With contactless payments, financial institutions can increase transaction volumes by capturing transactions typically made using cash. In addition, they can differentiate themselves with innovative new form factors to enhance loyalty and retention.
- Contactless payment cards are backed by the major payment brands — American Express, Discover Network, MasterCard and Visa. NPCI has also intimated to start the contactless card for their RuPay brand.
Acceptance of contactless payments is being adopted by a wide range of retail segments where speed and convenience are critical to the merchant service model. Increased spend per transaction and greater customer convenience for merchants.