Retail in Asia

In Trends

Contactless payment gets retail boost

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Contactless payments in India have got a big boost with payment aggregators joining the game. The latest is Innoviti, whose clients include the Reliance retail chain and Inox movie theatres, among others.

Payment aggregators are an additional intermediary in the retail space. They enable merchants to tie up with several banks for credit card acceptance. Payment aggregator Pine Labs was the earliest to jump onto the contactless bandwagon by introducing acceptance for Near Field Communication (NFC) payments at Starbucks, Future Group and Pantaloon Retail. NFC is the radio technology used by card companies for contactless payments.

According to Rajeev Agarwal, CEO, Innoviti, the maximum impact of contactless is in food and entertainment business. “In a multiplex, you have only 15 minutes in the interval during which you have to serve a whole lot of people,” said Agarwal. The unique selling point of NFC payments is that it does not require two-factor authentication for payments below Rs 2,000. “As against the 18 seconds taken for a chip-and-pin transaction, an NFC payment is completed in less than five seconds,” said Agarwal. He said that the objective of NFC cards was to be an alternative to cash by targeting sub-Rs 2,000 transactions.

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Hindustan Petroleum has started rollout of contactless acceptance at its petrol pumps.
While NFC is a new technology, there is no separate payment system and the same point of sales terminal is used for chip-and-pin cards and contactless cards. Besides cards, the terminals can accept payments from NFC-enabled phones. Apple Pay, Samsung Pay and Android Pay are expected to come to India in the coming months and these terminals will be ready to accept payment from these phones.

It is not just phones — any NFC device including wearables will be recognized. Earlier this year, Visa debuted its NFC payment ring at the Rio Olympics providing them to athletes for transactions at the venue.