This should really help Bangaloreans with their morning idli sambhar and cup of filter coffee. Near Field Communications (NFC) Ikaazpayments player iKaaz has teamed up with popular south Indian restaurant chain Adiga’s and popular idli joint Brahmin’s Coffee Bar to introduce contactless payments for its customers.

iKaaz will launch the closed loop payment system with Brahmin’s Coffee Bar and then across all other restaurants of Adiga’s. Customers will be issued NFC cards mapped to their mobile phones to enable micropayments. Customers can load amounts between Rs 100 to Rs 10,000 with the annual transaction limit set at Rs 1,00,000.

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iKaaz had earlier in 2013 come out with NFC stickers which could be attached on phones to make them mobile point of sale terminals (mPoS).

Our take: This actually might be a more meaningful and direct way for increasing NFC adoption and help with micropayments for both customers and businesses. For customers, it means beating a queue to get a token at self-service restaurants. For businesses, it makes a more effective system of payments and reduces cash dependency. As Radhakrishna Adiga of Adiga’s notes that restaurants often find it difficult to give back customers  small change in denominations of Rs 1 and Rs 2 and since these coins are becoming scarce, sourcing them formal channels such as banks is tiresome. He mentions that sometimes they are forced to source these coins from agents who charge 10% commission for them.

Perhaps this could pave the way for a more uniform NFC pre-paid card payment solution which can be given to corporate employees instead of Sodexo coupons and tie in with other NFC payment solutions by banks.

Other NFC payment developments: ICICI Bank said that it will be rolling out NFC enabled credit and debit cards next month in Mumbai, Delhi and Hyderabad, but the only problem with that is that there are very few merchants who have adopt PoS terminals for the same. And the country’s largest lender, State Bank of India, sought regulatory approval in September for NFC-enabled debit cards, which would enable customers to carry out transactions of up to Rs 2,000 without entering the ATM pin number at point-of-sale (PoS) terminals.