The digital payments ecosystem has been shaping up remarkably, given the incredible digitization initiatives being conceptualized and executed with a bid to further ease transaction processing for end customers. Digital payments have now become the backbone to almost every country’s digital economy, as increasing volume of payment transactions are being done through digital platforms. The pandemic that hit the globe last year significantly accelerated adoption of digital payments, especially the ones that operated on low-touch and no-touch models a.k.a. contactless payments.
As per the Mastercard global consumer study conducted in April 2020, almost eight out of 10 folks say that they use contactless payments. In India, the share of contactless payments increased to 12% in October 2020, from 2% in early 2019. One out of five PoS supports contactless payment in India now. Contactless payments are leveraged for day-to-day activities such as bill payment- mobile phone, utilities, rent, to payment of taxi drivers, vendors, retail outlets, quick service restaurants, pharmacies etc. Payments can be made through mobile payments (Digital Wallets) or contactless cards by scanning a QR code or tapping a contactless debit card.
Availability of technologies such as NFC, Bluetooth, QR codes, UPI, EMV technology, Secure Elements, coupled with a propensity to minimize touch with surfaces, has enabled implementation and adoption of contactless payments across the globe. The policy and regulatory interventions are also contributing to advancement of this ecosystem. RBI waived off the need for two-factor authentication for transactions less than Rs 2,000 through cards which was the raised to Rs 5,000 in December 2020. Additionally, NPCI and MoHUA have issued guidelines and specifications for contactless payments.
While contactless payments and technologies have the potential to offer vast opportunities, adequate steps need to be taken to address the apprehensions as well as misconceptions that may emanate from the standpoint of Security, Privacy and Trust. Lower levels of user awareness may result in scenarios of frauds and users falling prey to such frauds associated with contactless version of the payments and transactions. Continued investment in Security research and upgradation of technology would be critical in beefing up the ecosystem to endure the ever-evolving attack ecosystem. Tools such as modern cryptography have been playing a critical role in shaping the Security posture of contactless payments.
DSCI FINSEC Conclave 2021 will have a special focus on Contactless Payments and the multitude of opportunities and use cases it is going to offer in times to come and how the whole experience of users can be made secure, convenient, and seamless. FINSEC would call upon leading experts and thought leaders from across the board to share their insights on this area and shed light on the future roadmap.