Contactless Payment Technology for Fast, Safe and Convenient Payment

The spread of COVID-19 is having a significant impact on the card and payment market as consumers look to touchless or contactless payments, which are more hygienic and, therefore, a safer way to handle transactions. In this interview, Mr. Deepak Agarwal, Senior Marketing & Application Manager, SMD, STMicroelectronics shares more details about this technology and its advantages.

Please explain the emergence of contactless payment technology and its benefits?

Contactless payment cards and NFC-enabled mobile devices offer consumers a fast, secure, and convenient way to pay for products and services. Transport operators managing buses and trains were early adopters of contactless payment cards, as they were faster and more convenient than queuing at ticket counters and turnstiles. Contactless payment technology is also more comfortable for users as they don’t have to handle cash and can use the same device (card, mobile handset or wearable) for multiple purposes including payment, transit, and access control.

Because of this convenience, consumers have benefited from the deployment of contactless payment technology in many countries, including China, the UK, Australia, France, the USA and in India. ABI Research forecasts that contactless issuance in the United States and India combined will grow from 200 million in 2019 to 609 million in 2023.

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During COVID-19, how do you see this technology will drive transformation in businesses and people’s lives?

The spread of COVID-19 is having a significant impact on the card and payment market as consumers look to touchless or contactless payments, which are more hygienic and, therefore, a safer way to handle transactions. In fact, in addition to consumers being frustrated with having to remember PINs and passwords, the current pandemic has also brought to light the unhygienic nature of cash and PIN-enabled payments. Contactless payments are faster and more convenient while simultaneously addressing health and safety concerns. According to ABI Research, contactless adoption will increase by 6% and up to 8% globally when compared to pre-COVID-19 expectations, with the issuance levels forecasted to grow by 14% YoY, accounting for more than 65% of all cards issued in 2020.

NFC, the technology that powers almost all in-store contactless payments. What are the advantages of NFC along with challenges to overcome other payments technologies?

Near field communication (NFC) is a low-power, very short-distance data-transmission technology that allows consumers to make payments with contactless cards and NFC-enabled mobile phones. Contactless payment is quite secure, allowing users to stay in control of the card as it never leaves their hand during the transaction and with EMV certification, provides much more payment flexibility compared to other contactless payment technologies such as QR codes and online mobile wallets. In addition, with contactless cards, customers do not have to enter their PIN for transactions below a certain amount (Rs.2000/- in India) thereby speeding up the payment process and offering more convenience.

 Are there significant concerns with this technology, such as security breaches and identity theft?

People who are new to NFC technology are often concerned about the security and safety of their private information, especially when it comes to storing credit card information inside a mobile phone. Fortunately, the NFC technology ecosystem includes technology developers, financial institutions, security labs and regulatory bodies that have been actively working, since the technology was introduced, to prevent security breaches. And they’ve been diligent and successful at protecting personal information from NFC-related attacks.

Please highlight your innovations and products for contactless payment technology.

As consumers increasingly use and become more reliant on contactless payment technology, the question of how to secure and limit fraud has, on occasion, come into play, especially considering the increasing volumes and values of contactless transactions. ST is developing an advanced biometric solution that offers the same level of convenience as contactless cards, without transaction limits. ST’s solution will provide a higher level of security designed to prevent fraud and ensure cardholder authentication without taking a toll on convenience, since biometric data instead of PIN entry is used to allow payment.

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