Reported by: banking|Updated: April 18, 2016
Think of the great conveniences coming your way. You can buy a train ticket, pay a hotel bill, book a seat at a cinema or gain a passage through a toll booth not by swiping your credit or debit card, but by just waving it against a reader. For that matter, technology is also now available for a mobile phone to be held against a contactless payment terminal and wait for a confirmation of payment. The system is very much in vogue in the US and Europe with American Express, Discover, MasterCard and Visa all having launched contactless payment initiatives and leading banks issuing contactless credit and debit cards. Retailers have already integrated contactless readers into their PoS machines to enable contactless payments. Visa and MasterCard are also introducing internet-based systems that eliminate the need for cards altogether. The technology enables integration of the contactless payment technology into the mobile apps which a customer can use to make purchases. The only thing he needs to do is to tap the phone at the card reader at the store. This has essentially been made possible by a new feature in the Android operating system where earlier the card information had to be stored in a secured part of the phone. It can now be stored remotely. A separate banking app on the phone retrieves what is needed to complete the transaction. Any phone with NFC capability can adapt the technology.
Experts say contactless payment system is more secure than plastic cards. The card number is stored in encrypted form and can be easily disabled remotely if a phone is lost or stolen. Mobile systems also permit easier use of one-time card numbers.
The UK is one market that is fast taking up the contactless payment system. The contactless cards have a unique ‘wave’ symbol meaning the customer simply waves the card against a reader and the payment is effected. Also one can link a mobile number to his bank account and can make payments to anyone just by sending a text message. So, you can use the taxi and pay the fare through the mobile. This is besides the phone being used as a contactless card to ‘wave’ a payment at a reader.
There is also a system that facilitates a mobile, a tablet or a computer access a digital or e-wallet, which stores details of multiple credit and debit cards and one can select the card that has to be used for a particular transaction instead of entering card numbers, expiry dates and billing addresses. The card details are not shared with the website where the transaction is being made.
The contactless payment system is all poised to make a big impact. Apart from paying your train or movie tickets or a hotel bill or a taxiwala, you can even make the payment of your housing society bills or your rent. There are several service providers in the US and Europe who in fact are just waiting for the Indian market to open up