NFC Technology For Instant Payments

Context:

Google Pay has recently launched a new feature in India, ‘Tap to pay for UPI’, in collaboration with Pine Labs. The feature makes use of Near Field Communication (NFC) technology.

Relevance:

GS III- Science and Technology

Dimensions of the Article:

1. What is NFC and how does it work?
2. How will this technology work with the recently launched feature, ‘Tap to pay for UPI’?
3. Applications of NFC technology

What is NFC and how does it work?

• NFC is a short-range wireless connectivity technology that allows NFC-enabled devices to communicate with each other and transfer information quickly and easily with a single touch — whether to pay bills, exchange business cards, download coupons, or share a document.
• NFC transmits data through electromagnetic radio fields, to enable communication between two devices.
• Both devices must contain NFC chips, as transactions take place within a very short distance.
• NFC-enabled devices must be either physically touching or within a few centimetres from each other for data transfer to occur.

How safe is this technology ?

• NFC technology is designed for an operation between devices within a few centimetres from each other.
• This makes it difficult for attackers to record the communication between the devices compared to other wireless technologies which have a working distance of several metres, according to the NFC forum, a non-profit industry association.
• The user of the NFC-enabled device determines by the touch gesture which entity the NFC communication should take place with, making it more difficult for the attacker to get connected.
• The security level of the NFC communication is by default higher compared to other wireless communication protocols.
• The NFC Forum has also added Peer to Peer communication which is a mechanism to cipher all exchanged data to avoid external interpretation of recorded communication. S
• ince the receiving device reads your data the instant you send it, NFCs also reduce the chance of human error, according to investopedia.

How will this technology work with the recently launched feature, ‘Tap to pay for UPI’?

• Google Pay has been the first among UPI apps to bring the Tap to Pay feature working on POS terminals.
• It will allow users with UPI accounts configured on Google Pay to make payments just by tapping their NFC-enabled Android smartphones on any Pine Labs Android POS terminal.
• Once users tap their phones on the POS terminal, it will automatically open the Google pay app with the payment amount pre-filled.
• Users can then verify the amount and merchant name and authenticate the payment, using their UPI PIN. They will be notified once the payment is successful, Google told The Hindu.
• The process is much faster compared to scanning a QR code or entering the UPI-linked mobile number which has been the conventional way till now.

Applications of NFC technology

• NFC tech has a wide range of applications besides driving payment services like Google Wallet and Apple Pay. It is used in contactless banking cards to perform money transactions or to generate contact-less tickets for public transport.
• Contactless cards and readers use NFC in several applications from securing networks and buildings to monitoring inventory and sales, preventing auto theft, keeping tabs on library books, and running unmanned toll booths.
• NFC is behind the cards that we wave over card readers in subway turnstiles and on buses to check tickets. It is present in speakers, household appliances, and other electronic devices that we monitor and control through our smartphones.
• With just a touch, NFC can also set up WiFi and Bluetooth devices in our homes.
• It also has an application in healthcare, to monitor patient stats through NFC-enabled wristbands.
• NFC is used in wireless charging too.

-Source: The Hindu