NFC or near field communication is not a new technology in the banking sector. We all are aware of and using it for a long time now.
That is with the help of debit and credit cards that are enabled with contactless payments.
The cards that are powered by VISA are normally referred to as Tap and Pay. And the cards that are powered by MasterCard are referred to as contactless payment cards.
But both the cards are powered by the same technology.
How does the Contactless Payment Technology Work?
Now we know that contactless payments need cards. So to make the payments you will need a POS machine that is NFC enabled.
The merchant to whom you are making the payment will select the contactless payment option in the machine. And enter the amount that you need to pay to him or her.
This is where the NFC kicks in. All you need to do is tap your card on the POS machine and the payment will be done. The amount that was entered by the merchant in the POS machine will be deducted from your bank account.
What is NFC doing in the Mobile Banking App?
We have now learned about the NFC and the process of how contactless payments work. That’s fine. But the real matter of this article is about how the banks are using NFC in the mobile banking app.
Basically, the banks are integrating contactless payments in the mobile banking app. So you will no longer need a physical card to tap on the POS machine.
All you need to have is your smartphone which is using the mobile banking app of your bank. Please keep in mind that I am talking about the official mobile banking app that is published by your bank. I am not referring to any of the third-party apps that are developed by any Fintech companies in India.
What was the Need to Integrate Contactless Payments in Mobile Banking App?
It is quite common that you might have got this question in your mind now.
When we had a card that was NFC enabled which can be used for contactless payments. Then what is the need for this integration?
Let me answer this for you, there are chances that we lose our ATM Card or debit card somewhere. In that case, the money in our bank account is in danger.
In case you ever lose your card somewhere then make sure you instantly block it. So for this reason people are not always carrying the card with them. Because of this reason, the State Bank of India’s YONO Cash feature was developed. You can read about YONO Cash on Bank With Us.
How are Banks Managing to Integrate NFC in Mobile Banking apps?
We also need to understand one more thing and that is this feature can be used in the smartphones which have NFC components in them.
And these days the NFC component or the feature in the smartphone is very common.
The idea here is the bank is using the smartphone’s NFC to transmit the data which was earlier transmitted by the NFC in the physical card.
And not all banks have currently rolled out this feature. For now, the customers of IDFC FIRST Bank can use this feature to make the payments.
Recently the bank has revamped the mobile banking app and this feature has not yet been integrated into the new app. But the customers who are using the old app can make use of this feature.
You can see in the screenshot above that the contactless payment is being used. The phone is ready to act as the card. now the user has to touch the phone to the POS machine. This is how the banks are implementing the NFC technology in the mobile banking apps.
Read also: How to Upgrade the HDFC Mobile Banking App?