NPCI Joins Contactless Payments Bandwagon With SBI-Powered RuPay SoftPoS

The National Payments Corporation of India (NPCI) has partnered with SBI Payments to launch a RuPay SoftPoS solution for India merchants. The solution turns NFC (near-field communication)-enabled smartphones into PoS terminals for retailers. With the solution, merchants will be able to accept contactless payments of up to INR 5000 through a simple tap and pay mechanism on their smartphones.

Merchants can convert their existing android smartphone devices into a payment terminal by downloading a supported app. Once the contactless menu is chosen, an appropriate amount can be entered (i.e under INR 5000). The RuPay card can then be tapped on the merchant’s mobile completing the transactions instantaneously. As soon as the transaction is approved, the receipt of a successful transaction is generated in real time. The solution will currently work with RuPay tokenised cards and NCMC (national common mobility cards). 

“SBI Payments is working closely with NPCI to support the government’s Digital India initiative enabling small and medium merchants in semi-urban and rural Centres,” said Giri Kumar Nair, MD and CEO, SBI Payments. “We are also enabling NCMC cards on our terminals to improve consumer experience and the RBI announcement allowing transactions worth up to INR 5,000 through tap and go facility has further enhanced our ability to reach out to a wider number of merchant categories.”

Will NFC Shape The Future Of Digital Payments?

In January, Indian payments unicorn Pine Labs launched AllTap, an app to help small merchants enable contactless card payments over smartphones.

The company has claimed that the ‘tap and pay’ feature within the app is secure and is certified by the PCI Security Standards Council (PCI SSC). The solution currently accepts payments from RuPay, Visa, Mastercard and Amex cards. Similar to the NPCI-SBI solution, the tech works over NFC (near-field communication) and only smartphones with NFC chips can leverage AllTap.

Tap-and-go contactless payments also gained popularity amid the Covid-19 pandemic last year, when strict physical distancing protocols were in place. In May last year, the Reserve Bank of India (RBI) allowed Visa, Mastercard and NCPI to allow tap-and-go functionality on card payments for all purchases at retail outlets. However, financial services providers had placed a two-factor authentication process for transactions above INR 2K. So, customers had to enter their PIN to process the transaction. In January, RBI increased this threshold for contactless payments to INR 5K. 

Experts feel that the NFC technology can be used to rapidly scale up contactless digital payments in areas where internet connectivity may be erratic.