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ICICI Bank to introduce digital wallet this year for NFC-enabled mobile phones

India’s largest private sector bank ICICI Bank will be launching its digital wallet this year, the bank’s executive director Rajiv Sabharwal said in a press meet earlier this week. The digital wallet will be working on near-field communications (NFC)  technology and enable payments over mobile devices which have the same.

ICICI Bank

Note that earlier this month, ICICI Bank launched its NFC-enabled cards in three cities and so far the bank has introduced over 1200 Electronic Data Capture (EDC) machines capable of accepting contactless payments. Sabharwal commented that the next phase will be to get NFC on mobile for payments and that cards as a payments system will still exist.

He also added that the new NFC readers will be able to process payments from both mobile and from NFC cards from other banks. ” That’s how the ecosystem will have to work. Even if any of my competitor launches an NFC card, they will have to ensure their POS machines will accept all other cards. Similarly I will have to also,” Sabharwal said.

Currently, customers have to enter a PIN when they use ICICI Bank’s NFC cards in accordance to the Reserve Bank of India’s guidelines for card payments, but a digital wallet could remove the requirement for entering a pin and hence process payments faster. The RBI on its part said that it will be introducing guidelines for single factor authentications for small ticket payments.

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Other banks’ NFC payments plans

Rival HDFC Bank too said that it will launch a digital wallet as it sees a shift in e-commerce from desktops to mobiles. It is also interesting to note that HDFC Bank recently beat ICICI Bank to the top position in mobile banking transactions. At the end of October, HDFC Bank logged in mobile banking transactions worth Rs 3,450 crore, while ICICI Bank logged in Rs 1,416 crore.

State Bank of India, the country’s largest bank, had also sought permission from RBI to introduce NFC enabled cards which will allow customers to carry out transactions of up to Rs 2000 without entering the ATM pin number at point-of-sale (PoS) terminals.

Earlier in December, DCB Bank partnered with iKaaz to offer ‘tap and pay’ NFC payment solutions in India. iKaaz will launch mobile payment solutions including its flagship Near Field Communications (NFC) based Tap & Pay product targeting the merchant ecosystem and other related offerings directly targeting the consumers. Besides enabling buyers iKaaz is also getting merchants NFC ready by installing readers that will help them receive money into their bank account.

Banking on wearables?

Speaking on the bank’s digital strategy for this year, Sabharwal said that the lender will be looking to develop banking products on wearables. We don’t know how this would work and whether it will be limited only to non-financial transactions, but it would be interesting to see how it pans out.

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