The National Payments Corporation of India (NPCI) is looking to add near-field communication (NFC) capabilities to its Unified Payments Interface (UPI) and is reportedly in talks with payment aggregators to push the product across point-of-sale (POS) devices.
The access to POS and NFC capability will likely expand UPI’s reach to offline merchants increase the peer-to-merchant transaction and compete with private payment networks, sources told Mint.
Moneycontrol could not independently verify the report.
“NPCI wants to target the 5 million POS machines in India which are doing well and registering high-value transactions. Enabling NFC is the only way to tap into this… it will however face resistance from offline payment aggregators and POS manufacturers,” a senior banker told the paper.
Private players Mastercard and Visa expanded contactless networks using NFC through tap-on-go payments systems, they added. NFC-enabled tap-on-go cards allow customers to tap the card instead of swiping at POS terminals. The technology would also benefit NPCI’s Rupay card and other similar services, besides UPI, the report said.
However, both private players already have strong partnerships with banks and POS providers, while NPCI may face some push-back as existing alliances will be challenged, the banker said, adding: “It is yet to be seen how NPCI incentivises the offline payment ecosystem to adopt this offering.”
NPCI and Visa did not respond to queries, the report said.
The company is further looking to collaborate with smartphone manufacturers to embed the NFC function directly into devices, and plans to then expand this to large format stores. For phone users, NPCI is also looking to collaborate with banks to issue prepaid-cards and vouchers on the UPI network as an alternative to QR-codes.
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