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Contactless Payments

Even before the COVID-19 pandemic inflicted a massive health and econsomic catastrophe, contactless payments were already a widely used payment method. However, once the businesses reopened, they had to keep in mind the germ-conscious customers and adapt to the new normal of social distancing.

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Contactless Payments

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  1. CONTACTLESS PAYMENTS Presenter: Hanzala Shaikh Date: February 28, 2022

  2. Agenda • Introduction • What is Contactless payment and overview? • Global Scenario after COVID 19 • Benefits of contactless payments • Facts and current market opportunities • Risk Involved • How does the technology work? • Applications • Drawbacks • What DIGIPAY offers • Conclusion • Q&A

  3. Cashless ● Cheque/DD ● Net banking ● Card Swipe ● Gift Cards ● Mobile Wallets ● NFC Payments ● HCE ● QR Payments ● Biometrics

  4. What are contactless payments? • Require no physical contact between the consumer payment device and the physical point-of-sale (POS) terminal. • User pay through card or device • Close proximity (less than 2-4 inches) • The payment account information is communicated wirelessly (via radio frequency (RF)

  5. Generally used logo/symbols for Contactless payments

  6. Contactless Payments - NFC vs QR

  7. Moving Cashless The World Health Organization recommends ditching cash in favor of contactless payments to prevent the spread of COVID-19. “We know that money often passes from hand to hand and can collect all kinds of bacteria and viruses. We advise people to wash their hands after handling banknotes and try not to touch their face. Wherever possible, it is advisable to use contactless payments to reduce the risk of the infection spreading.” - WHO

  8. Gained Traction after COVID 19 A Transport for London bus stop advertisement recommending contactless payment as safe during the COVID-19 pandemic.

  9. • Improved Transaction Speeds • Consistent Consumer Experience • Additional Payment Devices • Strong Security • Reduced Cash Handling • Increased transactions volume • Convenience for Merchants • Contactless payments use the international standard ISO/IEC14443 for contactless communications that is being adopted worldwide for financial payments and leverage the existing payments infrastructure. • “Cool” Factor - https://www.youtube.com/watch?v=yA1Gr oP6xBI Benefits Contactless payments are secure payment transactions that don’t require physical contact between the payment device, such as a dual-interface EMV chip card, NFC-enabled mobile phone or wearable, and the acceptance device.

  10. About 38% of consumers now see contactless as a basic need or feature of payments, up from 30% a year ago. Source: The Futurist Group

  11. What Study relates? The facts • Globally, there was a 40% growth in contactless transactions • 74% of retailers state they will continue to use contactless post-pandemic • 94% of retailers expect touchless payments to increase over the next 18 months • 82% of consumers view contactless as the cleaner way to pay • Contactless cards are up to 10 times faster than other payment methods • 80% of contactless transactions are under $25 • 43.9% of consumers use Apple Pay as opposed to other mobile payments options Source: Radiant

  12. Contactless Payments - Cardholder Verification Limit (CVM)) Authorities, banks & card networks in many countries have set higher transaction limits for contactless payments.

  13. • RFID tags can be attached to cash, clothing, and possessions, or implanted in people, the possibility of obtaining personally-linked information. • Remotely steal money from bank cards equipped with RFID chips using self-made contactless readers, capable of scanning such bank cards. Risk Involved • Criminals can extract card numbers and expiration dates from these cards. From here, they will be able to carry out transactions and fabricate a clone with a magnetic stripe without the consent of the bank account’s owner. • Crime Expectation research : Cybercriminals will steal an estimated 33 billion records in 2023.

  14. FACTS `

  15. HOW DOES THE TECHNOLOGY WORKS?

  16. 1 Contactless cards What’s the technology behind contactless 2 E-wallets 3 payments? HCE enable Devices (Mobile, Tablets, POS etc.)

  17. Enabled by NFC chips that are found in most modern smartphones and tablets, as well as in many smartwatches and smart bracelets. The Overview Chips can transfer encrypted data from a customer’s bank card to another chip, for example, in a POS terminal at a store. The contactless connection between the devices is conducted via radio signal (Radio Frequency Identification technology). NFC-chip uses a special radio frequency (13.56 MHz), which works only if the devices are close to each other. The data exchange takes 1-2 seconds, followed by a successful payment.

  18. STEP 1 STEP 2 STEP 3

  19. 1 Banking cards supporting contactless technologies (for example, MasterCard PayPass/ Visa PayWave). 2 MODES OF PAYMENT Mobile devices - HCE enabled(Apple Pay, Android Pay, Samsung Pay). 3 Wearable devices - Apple, Samsung, Mondaine and Swatch watches with an embedded NFC chip.

  20. Application of Contactless Payments NFC allows user to make payments at various places, out of which few of them are: • Fuel pumps • Parking garages • Movie tickets • Tollbooth • Merchant payments • Rewards • Banks cards • Transit tickets Source: MobilePaymentsToday

  21. Amazon Go Brings 50% more profit than traditional stores

  22. Palm Payments Patented initiative by Amazon

  23. Example of Current Providers Walletmor - https://walletmor.com/

  24. Voice payments Banking innovation

  25. Drawbacks of NFC payments • Too Expensive • Security and compliance limits • Availability of providers

  26. WHAT DIGIPAY OFFERS? NFC APPROACH: ● Merchant can initiate the NFC payment through their app, while consumer can initiate the payment by scanning the merchant QR code, or punching the merchant ID. ● Customers will be assigned a NFC card which they can top-up using their wallet balance. ● They can then use their NFC enabled cards to pay to the registered merchants by tapping their cards to the merchant's NFC enabled mobile phones. ● Admin will manage and assign the NFC cards from the admin panel

  27. ● In coming days, we might see acceleration in the adoption of contactless payments. ● This might also result in rapid innovations in the contactless technology that might encourage FinTech startups and enterprises to heavily disrupt the financial sector.

  28. Concluding lines “As more competition grips the market, we as a technology provider committed to innovate our tech with the upcoming payment trends”

  29. Any Questions? hanzala.s@digipay.guru www.digipay.guru +91 9662992262

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