ICICI Bank is all set to introduce a brand new way to make payments: Contact less debit and credit cards. Using Near Field Communication (NFC) mechanism, contact less cards can save upto 90% of the overall time required to make a payment, if we compare to traditional way.
As per initial reports, this new payment protocol will be launched next month.
Rajiv Sabharwal, ED, ICICI Bank said “We expect this to be one of the biggest game changers in the payment industry.”
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How Will It Work?
ICICI Bank will issue new debit and credit cards enabled with NFC chip in them. While making a payment, customers will only have to wave their special cards infront of a scanner. Traditionally, debit/credit cards needs to be swiped or dipped into a card reader to receive the payment. As per global estimates, NFC enabled cards only take one-tenth of the time required by conventional swiping method.
ICICI Bank will use existing NFC platforms developed by Visa Card and Master Card to carry forward the payments by contact less cards. payWave is a product launched by Visa and payPass by Master Card to process NFC payments at merchant outlets.
The Pin Problem
The NFC payment mechanism doesn’t require any pin code for confirmation. Just by waving the card, payment is processed.
However, RBI guidelines clearly states that every card enabled payment at merchant outlets needs to be authenticated by entering a pin code. If the same rule is applied on NFC enabled payments, then the whole point of saving time is destroyed.
In order to get over this problem, ICICI Bank is already in talks with RBI to waive off this pin request rule for small transactions; which will help the merchants to process payments faster.
Last month, SBI had announced that they will be launching their own NFC enabled cards for transactions less than Rs 2000. It is being speculated that a similar kind of rule can be introduced for ICICI Bank’s NFC payments as well.
The Implementation
As of now, ICICI Bank has tied up 200 merchants from Bangalore, Gurgaon, Mumbai and Hyderabad for accepting this new mode of superfast payment. Both payWave and payPass would be implemented in these merchant outlets for accepting payments using NFC mechanism.
Besides this, ICICI Bank has also tied up with Delhi Metro for issuing NFC enabled Metro cards which can also be used as credit and debit cards outside Metro.
Can NFC Become Mainstream Payment Method?
The use of NFC enabled payment mechanism is getting popularity all over the world.
Apple iPhone 6 and 6 plus provides NFC payment mechanism using their Apple Pay platform, which was one of the major selling points of the new handset. Apple has tied up with major retailers all over USA and teamed up with more than 25 USA based Banks to support this blazing fast payment mode.
NFC Payment system was recently introduced in Australia, and nearly half of the market has now adapted this method, surprising even the most hardcore financial experts. As per reports coming in, contact less payment transactions has tripled in Europe, due to the ease and time-saving factors.
Certainly the rage is on for this new payment mechanism. But will Indians adapt to it?