Instant payment facility: The NFC technology
- Posted By
10Pointer
- Categories
Economy
- Published
4th Apr, 2022
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Context
The Google pay has recently launched a new feature in India ‘Tap to Pay ‘for UPI which will use the NFC technology for instant payments.
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Background
- Near field communication (NFC) technology had initially started in consumer electronics companies like Nokia, Philips and Sony in 2004.
- They together formed the NFC forum, which outlined the architecture for NFC technology to create powerful new consumer-driven products.
- Nokia has released the first NFC enabled phone in
- Recently in India Google pay has launched new mode for instant payments using this technology in collaboration with Pine labs for the Android enabled smartphones and UPI accounts linked to Google pay by Point-of-Sale (POS) terminal across the country.
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Tap to pay technology
- Google pay is among the UPI apps to bring the ‘Tap to pay’ feature working on POS terminals.
- It will allow users with UPI accounts linked to Google pay to make payments just by tapping their NFC enabled Android POS smartphones on any pine labs android POS terminal.
- Point-of-sale: The POS transaction takes place when a payment is made by a customer at a cash counter or online store in exchange for products or services provided to them.
- o In general terms, a point of sale transaction occurs whenever an activity involving the conversion of assets, liabilities or equity occurs.
- Once the phone is tapped on the POS terminal, it will automatically open the Google pay app with the payment prefilled.
- This process is much faster as compared to scanning the QR-code or entering the conventional mobile phone number.
- Earlier this mode was available only for cards.
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NFC technology in India
- What is NFC?
- NFC is a short-range wireless connectivity technology that allows NFC-enabled devices to communicate with each other.
- It helps to transfer the information quickly and easily with a single touch for paying bills, exchange business cards, download coupons or share a document.
- How it works?
- NFC transmits data through electromagnetic radio fields, to enable communication between two devices.
- Both devices must contain NFC chips, as transaction take place within a very short distance.
- NFC-enabled devices must be either physically touching or within a few centimetres from each other for data transfer to occur.
- Is it safe?
- NFC payments are incredibly secure. They are more reliable than regular magnetic-stripe The data involved in mobile payments is encrypted and dynamic.
- Apple Pay and Android Pay services offer airtight security for all mobile transactions. To ensure secure digital data transfers, Apple Pay, and Android Pay use tokenization technology.
- It needs to verify it with 2-factor authentication (2FA) With Apple Pay, you can authenticate it with Touch ID or Face ID technologies.
- The NFC forum has also added peer to peer communication which is a mechanism to facilitate all exchange data to avoid external interpretation of recorded communication.
- NFC reduces the chances of human error.
- NFC and applications-
- To drive payment services- it will help payments services like Google pay, apple pay etc for wide range and faster mode of payment.
- Fighting COVID -To generate contactless tickets for public transport, contactless payments and building inventory and sales and monitoring auto-theft.
- It is present in speakers, household appliances and other electronic devices that we monitor and control through our smartphones.
- In healthcare, to monitor patient stats through NFC enabled wristbands.
- As a portable device- Chargeable and wireless.
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Comparison with other wireless technologies
- There are several wireless technologies available in the market like IrDa technology. It is a short range connection based on the exchange of data over infrared light where the two communication devices must be positioned within a line of sight.
- This technology is used mainly in remote control devices, Bluetooth and WiFi connections.
- These modes need their own power supply to operate and cannot Powered by radiofrequency.
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Impacts on India
- NFC technology is one of the most secure payment options nowadays:
- Experts consider it to be even safer than traditional swiped transactions. Although services like Apple Pay or Android Pay do everything to protect your operations, you can secure them even more.
- The technology works automatically to make contactless services like Apple Pay, or Android Pay possible.
- Fast modes of payment and towards Digital India:
- Digital India is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy.
- E-governance initiatives in India took a broader dimension in the mid-1990s for wider sectoral applications with emphasis on citizen-centric services.
- This technology will make this initiative stronger and digital payment more reliable for the users.
- Reduction of fraudulent and crime:
- NFC technologies will reduce fraudulent related to digital payment transactions and make the data more stringent to corrupt.
- Crime related to real time location can be reduced, as the information in the NFC is dynamic.
