Proximity pay could be the next big thing to hit the Indian payments ecosystem with the National Payments Corporation of India (NPCI) initiating the process on an experimental basis. In this method of settling payments at any merchant establishment, there will be no swiping of the debit or credit card and entering the PIN. In the case of the chip-embedded cards, by just holding the card over the display of the machine is sufficient for the machine to read the details and deduct the bill amount.
The customer can keep walking with the secure thought that the payment has been made without any physical touching of the card with the PoS terminal. The smartphone can also be used for making this touch-free payment.
NPCI has roped in PhonePe, Ultra Cash and ToneTag for this pilot run and UPI will be the payment gateway. The trial runs are being conducted in select setups like office canteens and if it runs smoothly, it will go live universally across the country.
NPCI sees several advantages in introducing the proximity pay mode. One is the customer feeling satisfied that his or her personal details will be secure with the no-physical touch process. The other is it will simplify the payment mode and reduce the time taken at the checkout points in the merchant establishments. The third and perhaps the most critical of them all, the cost of the PoS machines will be cheaper and payments in rural areas can also go digital.
This is important, especially seen from the cash-crunch situation faced in many parts of the country. Another case for the proximity payment to be encouraged in the doing away with the customer having to type out the beneficiary’s name on the mobile app and many times making mistakes in them.
The ultimate settlement of the payment through the banking channels will be undertaken by NPCI as it is being done already.