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    5 contactless and digital payment options for users post lockdown

    5 contactless and digital payment options for users post lockdown

    5 contactless and digital payment options for users post lockdown
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    By Vishal Maru   IST (Updated)


    It has been over a month that our country is observing nationwide lockdown in order to curb the spread of novel coronavirus.

    It has been over a month that our country is observing nationwide lockdown in order to curb the spread of novel coronavirus. While we all are eager to return to the new normal, we would still be following social distancing norms for several months to come.
    Though we are accustomed to using mobile payments, debit and credit cards as an alternative to cash, contactless payments are gaining popularity among consumers across the globe as it can significantly help to ensure social distancing.
    We may see the emergence of new payment methods taking over traditional methods as we progress towards business as usual situation:
    Contactless Cards and Proximity Payments
    The ecosystem has made timely adaptations in plastic cards over the years and hence, it is one of the most important payment instruments even today. Issuance of contactless cards may see an uptick post lockdown while existing contactless card holders may opt for tap and pay like transactions wherever applicable.
    On the acquiring side, POS terminals are already equipped with acceptance infrastructure so as to meet customers’ demands. Few countries in the west have recently increased transaction limits for contactless cards but in India, the Reserve Bank of India has permitted the transaction limit of Rs 2,000 without PIN which is adequate for purchasing essentials like groceries at the moment.
    Proximity payments will also see the proliferation of mobile applications with Tap on Phone which would lead to the implementation of PIN on glass technology.
    Digital POS
    New merchants are being on-boarded by banks through the Digi POS system so that customers can make online transactions. Remote acceptance of payments is now possible through digital POS. Technology in payments has enabled mobile phones to function as a POS device and an alternative to traditional POS. The most common payment method would be SMS or e-mail based invoiced payments.
    QR Payments And UPI
    This asset-light acquiring platform has become a fairly popular payment instrument post demonetization. Mobile wallets, banks, UPI third party players and aggregators have deployed quick response code at merchant locations on a large scale and thanks to the flexibility and convenience it provides, thousands of small vendors have entered the digital payments ecosystem.
    Customers can use their bank apps to scan Bharat QR or any UPI enabled apps to make small ticket size transactions for their daily essentials. Consumers can also transfer money to the merchant by using mobile number or UPI ID through UPI enabled apps.
    The government has mandated use of FASTags across national highways. It will be interesting to see its roll out at the state level as well. FASTags can be availed through banks or through several authorized payment applications.
    Going forward, it can also facilitate fuel payments as well as parking fees among other use cases. Currently, most of the local toll plazas have also deployed POS terminals or QR codes to facilitate digital payments.
    National Common Mobility Card (NCMC)
    NCMC are hybrid cards that can be used for payments across various touch points including metro, bus, suburban railways, toll, parking, smart city and retail. Its quick roll out will boost digitalisation while ensuring social distance. Kochi Metro was one of the early adopters for NCMC cards and its success has inspired other states to deploy infrastructure for this interoperable product.
    With over 850 million debit and credit cards in circulation, it is convenient for consumers to opt for digital transactions instead of cash but the main challenge lies on the acquiring side as there are only about 5 million traditional POS terminals in the country.
    However, these asset-light products are gradually creating additional merchant touch points that are helping the digital economy agenda. Going forward, innovation and technology in payments will continue to leverage a combination of wearables, smartphones and internet among others to set up an array of Internet of Thing (IoT) based products that may add a different flavour to this game.
    Vishal Maru is SVP - Merchant Payment Services, Loyalty and Digital Payments, Worldline India. Views are personal.
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