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Why banks and payment companies are betting on NFC

In the wake of the COVID-19 pandemic, card companies and banks are pushing near-field-communication (NFC) based payment options for customers in a bid to avoid debit or credit card swipes at retail outlets. While Google Pay has launched a tokenised card option with Axis Bank, SBI Cards and Kotak Mahindra Bank, HDFC Bank alongside Visa have now enabled merchants to accept contact-less card payments via their smartphone, according to a press release. NFC-based card payments allow customers to "tap and pay" on point-of-sale devices, therefore reducing human contact when buying goods and services. Both Visa and Mastercard said that transactions through contact-less payment methods, globally, have increase manifold in the last six months due to a shift in consumer preferences in the wake of the pandemic. According to a statement by Visa, around 55% of Indian consumers surveyed said they would prefer to use a "tap to phone" payments. Both card companies have been engaged in marketing campaigns for the last two years pushing customers to While NFC technology has been around for nearly two decades and the first smartphone with NFC technology was launched a decade ago, the adoption of this technology in India for payments is only now gaining steam, despite some early attempts. The use of NFC in smartphones for digital payments had not taken off for three reasons. The first is the low penetration of digital payments, the second is the low penetration of NFC smartphones among consumers and the third, is the low penetration of…

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Reports on banking, payments, fintech and crypto-curencies. Additional reporting on media regulations, data protection and other areas.

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