NFC technology for instant payments
- April 4, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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NFC technology for instant payments
Subject: Science & Tech
Section: Computer
Context- Google Pay has recently launched a new feature in India, ‘Tap to pay for UPI’, in collaboration with Pine Labs. The feature makes use of Near Field Communication (NFC) technology.
Concept-
- Google Pay has been the first among UPI apps to bring the Tap to Pay feature working on POS terminals.
- It will allow users with UPI accounts configured on Google Pay to make payments just by tapping their NFC-enabled Android smartphones on any Pine Labs Android POS terminal.
- Till now, Tap to Pay was only available for cards.
- The process is much faster compared to scanning a QR code or entering the UPI-linked mobile number which has been the conventional way till now.
Are other companies using NFC tech for payments using smartphones?
- In February this year, Apple introduced Tap to Pay on the iPhone.
- It will allow merchants across the U.S. to use their iPhones to accept Apple Pay, contactless credit and debit cards, and other digital wallets through a tap to their iPhone without the need for any additional hardware or payment terminal.
What is NFC and how does it work?
- NFC is a short-range wireless connectivity technology that allows NFC-enabled devices to communicate with each other and transfer information quickly and easily with a single touch — whether to pay bills, exchange business cards, download coupons, or share a document.
- NFC transmits data through electromagnetic radio fields, to enable communication between two devices.
- Both devices must contain NFC chips, as transactions take place within a very short distance.
- NFC-enabled devices must be either physically touching or within a few centimetres from each other for data transfer to occur.
What are the other applications of NFC technology?
- NFC tech has a wide range of applications besides driving payment services like Google Wallet and Apple Pay.
- It is used in contactless banking cards to perform money transactions or to generate contact-less tickets for public transport.
- Contactless cards and readers use NFC in several applications from securing networks and buildings to monitoring inventory and sales, preventing auto theft, keeping tabs on library books, and running unmanned toll booths, according to investopedia.
- It also has an application in healthcare, to monitor patient stats through NFC-enabled wristbands.
- NFC is used in wireless charging too.
How safe is this technology?
- NFC technology is designed for an operation between devices within a few centimetres from each other.
- This makes it difficult for attackers to record the communication between the devices compared to other wireless technologies which have a working distance of several metres.
- The security level of the NFC communication is by default higher compared to other wireless communication protocols.
When did NFC tech start?
- In 2004, consumer electronics companies, Nokia, Philips and Sony together formed the NFC Forum, which outlined the architecture for NFC technology to create powerful new consumer-driven products.
- Nokia released the first NFC-enabled phone in 2007.