In line with the government’s target of 30-billion digital transactions in the current year, the Ministry of Finance has asked banks to issue near-field communication (NFC)-enabled tap-and-go debit and credit cards that can be used beyond merchant transactions for services like metro, train, and bus travel.
The idea is to introduce these new cards when customers apply for their debit/credit cards to be re-issued.
NFC-enabled cards are part of a global tap-and-go solutions
The FinMin highlighted that since point-of-sale machines are capable of reading NFC-enabled cards, introducing convenient, tap-and-go payment solutions will improve adoption of digital transactions in the country.
The notification also comes at a time when payments companies around the world are experimenting with, and trying to promote tap-and-go payment solutions across the world.
Notably, Visa showcased the tech in the 2018 Winter Olympics.
NFC-cards might be a good idea amid increasing digital transactions
Additionally, it seems like introducing a new medium of digital transactions is a smart move in the current climate in India, wherein digital modes of payments are being increasingly adopted.
RBI data indicates that debit card transactions at PoS terminals increased by 24% in April 2018 compared to the same period last year, while cash withdrawals from ATMs also increased by 22%.
How payments will work with the NFC-enabled cards
The ministry also directed that when such cards start getting issued, mass transit vehicles used in public transport need to be upgraded to support such tap-and-go payment systems.
When such systems are adopted, passengers traveling on public transport can just tap their NFC-enabled cards on the PoS terminals, and traveling fare will be deducted directly from passengers’ bank accounts.