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Contactless Cards: Tap To Shop

The past couple of years have seen payments industry make tremendous strides in India. From the introduction of debit and credit cards to awareness regarding online banking, and now to the adoption of mobile wallets and contactless cards: the industry, it seems, is coming of age. -By Naveen Kukreja

Several banks have issued contactless cards, with ICICI Bank leading the way by launching them the first time in January 2015. Their popularity has been on an upswing and this is evident from the fact that SBI plans to increase the number of Point of Sale (POS) machines to 1 lakh and convert the existing machines into Near-Field Communication (NFC) enabled. With banks gearing up for contactless cards, it’s time we also take a detailed look at this newest technology.

Some contactless cards currently available in India are:

  1. ICICI Bank Coral Contactless card
  2. SBI Signature Contactless cards
  3. Axis Bank’s range of contactless credit card and Multicurrency Forex Card

How do contactless cards work?

Contactless cards use near-field communication (NFC) technology. It is a shortrange wireless communication technology that enables exchange of data between devices over about a 10-centimetre distance. To make the payment, you only have to tap the card at a POS machine. These cards can also be used in the traditional way, by swiping or dipping.

To make the payment, you only have to tap the card at a POS machine. These cards can also be used in the traditional way, by swiping or dipping


  • Convenient and faster payment: Technology always aids in reducing time and same is true for contactless cards too. These cards increase the ease and convenience of transactions, and reduce the time taken to complete a transaction by almost half of what payment by cash or traditional cards may take. Thus, they are ideal for use in busy retail environments, such as supermarkets, convenience stores, petrol stations and quick-service restaurants.
  • Reduced risk of card misplacement: With traditional cards, you have to hand them over to the POS merchant for carrying out the transaction. However, contactless cards don’t need to be handed over to the merchant and so they are always within your sight. Further, as you would have them with you at all times, there is no danger of them being illegally copied at a POS.
  • PIN verification to avoid misuse: If contactless cards are used for multiple transactions in succession, they will prompt you to enter the PIN to ensure that your card is not in wrong hands.
  • Secure account information: Contactless cards do not share account information, such as name, card number or security code, with retailers, thereby keeping such crucial details safe.


  • Cap on payment amount at Rs 2,000: At present, customers can only pay up to Rs 2,000 per tap and that too at select POS machines. For transactions amounting exceeding this amount, you would have to enter your Personal Identification Number (PIN).
  • Limited accessibility: Not all POS are equipped to transact using contactless cards. For these cards, banks and other financial institutions will have to erect more NFC-enabled POS machines. As a result, your contactless card may not yet be accepted at all the locations.
  • Accidental payment: Given that these are contactless cards, sometimes payments can be made accidentally if the card is too close to the POS machine.
  • Card hacking: Contactless cards are exposed to the risk of spyware or malware attacks and other viruses just like any computer device. Also, there have been instances where fraudsters have been able to skim the card data using mobile applications. However, these threats are present even in your regular chip-based cards.
    Besides providing convenience, contactless cards by being an integral a part of a cashless economy offer indirect benefits that run much deeper, such as curbing of black money. The introduction of contactless cards is another step towards a cashless economy and one we should embrace soon.

Written By: Naveen Kukreja

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