The future is contactless!
From cash and card swipe to tap-and-pay, payments have come a long way. People have switched various instruments of payment or exchange through centuries – from grains, coins, metals, currency to now digital payments. There has been one factor that has influenced this transition through the years – Convenience.
The future is contactless!
From cash and card swipe to tap-and-pay, payments have come a long way. People have switched various instruments of payment or exchange through centuries – from grains, coins, metals, currency to now digital payments. There has been one factor that has influenced this transition through the years – Convenience.
Even though most people are unaware of the nomenclature ‘contactless payments’, it has been very much present around us. It is as simple as hailing a cab using a cab-aggregator. You take the ride and the payment is taken care of digitally. Now, we are just deepening the penetration of these solutions.
Banking & Payments are considered to be the livewire of any economy.
Financial institutions have constantly been challenged to adapt to the changing business environment and the pandemic has further accelerated it.
Due to the ambiguity around the virus and restrictions in movements in its initial days of spread, customers were highly apprehensive of withdrawing cash from ATMs. To tackle this, various banks introduced several digital initiatives and improved the existing processes. Initiatives such as virtual banking (KYC, investments, loans etc.) and contactless cash withdrawals from ATMs are expected to become the new normal in near future. At AGS Transact Technologies, we introduced QR Cash, an end-to-end contactless cash withdrawal solution on ATMs wherein the bank’s customer can access cash by simply scanning a QR code using his/her smartphone. Click here to watch the demo.
Retail stores including Kirana stores and other mom-and-pop shops are also swiftly embracing digital payments to provide added convenience and safe transactions amidst the pandemic. Transactions on multi-mode ONGO POS terminals which support payment modes like tap-and-pay and QR based transactions have gained popularity. Recently, ONGO along with Global-India Insurance Brokers introduced digital and completely paperless motor insurance to 2-wheelers and 4-wheelers at accessible touchpoints like fuel retail stations.
Near Field Communication (NFC) the premise for contactless payments will see a surge as tap-and-pay gains popularity. Recently, Mastercard and the Payment Council of India urged RBI to relax the norms on NFC to increase the usage of the same. With this move, contactless payments using NFC i.e. contactless cards will gain momentum as it would reduce physical contact completely.
Another popular mode that has aided social distancing and contactless payments is the QR code. These tiny squares have enabled various businesses to switch to digital models with utmost ease. In fact, a recent RBI committee is reportedly in talks to completely phase out closed-loop QR codes and welcome interoperable codes to bring in more people under the contactless payment ecosystem.
Many restaurants have now begun to use QR codes to scan menus, place orders and even pay the bills. Another sector that has embraced QR-based contactless payment is transit. In India, Metro stations like Kochi Metro were already accepting QR based tickets and now even local trains & buses in cities like Mumbai have begun accepting these contactless entry & payment options.
Another sector that benefits from contactless payments is fuelling. Fastlane by AGS, India’s first fuelling application, enables its customers to pre-set the amount of fuel by using his/her smartphone and the corresponding amount is deducted from the mobile wallet once fuelling is completed. Such a solution minimises human interaction as the entire process is completed using a smartphone.
Having said that, with the surge in digital transactions, there is a need to regulate and mitigate the risks that come along with these platforms. Concepts like tokenisation can help us make these transactions more secure for all the stakeholders in the value-chain. Tokenised cards may bring the next wave of contactless payments. Here, the details of the user remain with the acquirer bank only, making the transaction card & bank details completely confidential and secure.
As social distancing becomes the ‘new normal’ various ‘experiences’ are bound to become contactless in a truly end-to-end way. We may soon see mobile-based queue management, contactless checkouts services and even electronic shelf labels etc. at retail stores.
To summarise, end-to-end contactless experiences in payments, dining, fuelling, and mobility will continue to rise and the traditional ways of transactions will see a paradigm shift.