Tap and go! New debit, credit cards will make metro, bus, train travel easier
In a letter to the chief executives of banks, the finance ministry said that the banks should start providing NFC-enabled credit and debit cards as it is the next generation of innovation in plastic money.
Your next credit or debit card can save you from the hassles of a ticket counter line while travelling via public transport, and can do even more. The Ministry of Finance has asked banks to start issuing near field communication (NFC)-enabled contactless credit and debit cards so that their use can be expanded beyond merchant transactions. This is in line with the government's target of 30-billion digital transactions in the current year.
In a letter to the chief executives of banks, the finance ministry said that the banks should start providing NFC-enabled credit and debit cards as it is the next generation of innovation in plastic money and offers better security and convenience while conducting digital transactions. The letter stated that since most of the point-of-sale (PoS) terminals are capable of interacting with NFC chips, integrating them to credit and debit cards can be helpful in promoting digital transactions, the Economic Times reported.
The note further mentioned that after such cards are issued, the mass transit vehicles can be upgraded to interact with them. In such a case, a passenger using the metro, local trains or buses can just tap their credit or debit cards, and the cost of the ticket will be deducted directly from their bank accounts.
For the sake of smooth transition, the new NFC-enabled contactless cards can be issued while reissuing credit or debit cards, the note by the ministry suggested.
This initiative by finance ministry to introduce NFC-enabled cards comes at a time when payment companies have been experimenting and working to promote tap and go around the world, the report said.
Introducing a new medium of digital transaction when it is gaining popularity in India is also a smart move. According to RBI data, use of debit cards at PoS terminals increased 24 per cent in April, going to 333 million transactions from 264 million a year ago. Meanwhile, cash withdrawals from ATMs also increased by 22 per cent during the same month.
The NFC-enabled contactless credit and debit cards can also be a smart move against card fraud, which are on the rise according to the central bank.