Tap to Pay

So the new buzzword in payments industry is out and all the big institutions are readying their banquet of services to be launched through their existing payments applications.

In the simplest form Tap to pay is a contactless technology enabling merchants to accept payments securely via Cards, Wallets and now finally UPI. It enables payment acceptance on the terminal without entering a PIN on the keypad through NFC technology

‘NFC’ you ask?

Near Field Communication is a technology allowing the short-range wireless intercommunication of mobile phones and other electronic devices for purposes such as making payments. NFC is a highly secure electronic transmission that allows funds to pass from your card, wallet or bank to a retailer in exchange for a product or service. Most consumers don’t see beyond the simple prompt and approval message, there’s a lot going on behind the scenes enabling you to make that purchase. With NFC, customers no longer need to enter their pin or provide a signature, but these transactions are generally considered more secure because they use the same security infrastructure that EMV (or chip & pin) transactions employs.

Traditionally the use of Tap to Pay on Credit Card and Debit Card is wide spread in India. However, use of Tap to Pay on wallets has already been there in use in the international markets but not yet picked up in India due to regulatory hurdles. Especially use of Face ID as a biometric to authorize payments is not allowed but unless a PIN is entered.

Due to which the likes of Apple Pay and Samsung Pay has still not picked up due to few of the hurdles as Face ID is the showstopper for wallet payments.

Fast forwards, here comes the latest addition Tap to Pay on UPI

Gpay has collaborate with PinLabs for facilitating Tap to Pay on UPI. The user journey will only change where instead of scanning a static QR/BQR, a GPay user can simply tap on NFC enabled POS terminals and enter PIN for authorizing transaction on the GPay app.

For now any form of Tap to Pay is on source to terminal type of payment, the future however lies in peer to peer payments i.e. fund transfer which currently happens through RTGS, NEFT, IMPS, UPI and wallets.

Apple has launched P2P Tap to Pay services on IOS devices in international markets. This will surely take up the market share of static QR and BOR transaction through UPI

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