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Have you ever wondered what really happens when you use the “Tap & Pay” feature on your card? The answer lies in a technology called NFC — Near Field Communication.
Near Field Communication (NFC) is a short-range, contactless communication technology that allows two devices to exchange data securely over a radio frequency of 13.56 MHz. With just a simple tap or wave, NFC can transfer data between devices—no cables, no pairing, just seamless interaction.
NFC technology has become a cornerstone of contactless payments and smart connectivity. Whether it’s tapping your card at a terminal or sharing files between phones, NFC ensures the process is fast, easy, and secure.
Much like Bluetooth or Wi-Fi, NFC uses radio waves to send data. However, its short-range nature makes it particularly secure and ideal for sensitive transactions like payments.
When using a mobile-based payment app, all you need to do is tap your phone on an NFC-enabled POS terminal. The device establishes a secure connection, often authenticated through a fingerprint, passcode, or facial recognition.
Next, a Secure Element (SE) chip processes the transaction by encrypting the data and sending it back for final approval. Most NFC-enabled cards in India currently operate under RBI-mandated transaction limits, which further enhances security for users.
With smartphones from brands like Samsung (Galaxy Series), Google (Nexus), and Apple (iPhone) now supporting NFC, India is moving rapidly towards a more connected and cashless economy.
From tap-to-pay apps to digital wallets and wearables, contactless payment options are reshaping how consumers engage with money.
A common concern is whether NFC payments are truly secure. The short answer is—yes, they are.
Thanks to features like tokenization, NFC payments do not store or transmit actual card details. Instead, sensitive data is replaced with a unique, encrypted token. Even if a business’s terminal is compromised, your data remains safe.
Further, two-factor authentication (2FA)—like Face ID, Touch ID, or passcodes—adds another layer of security, ensuring that the person making the payment is authorized to do so.
On the merchant side, modern NFC readers and SoftPOS terminals also use encryption and tokenization to protect transaction data.
India’s shift towards digital payments was accelerated by two major events:
2016 Demonetization: Triggered a nationwide push toward cashless alternatives.
COVID-19 Pandemic: Increased demand for touch-free, hygienic payment methods.
In May 2021, the National Payments Corporation of India (NPCI) partnered with PayCore to launch RuPay SoftPOS—a game-changer in making NFC-based contactless payments more accessible.
This collaboration enables millions of merchants to convert their NFC smartphones into POS terminals. No extra hardware required—just a phone and the SoftPOS app.
According to PayCore’s CEO, this significantly reduces acquisition costs for banks and payment service providers trying to reach over 63 million MSMEs in India.
NPCI’s Nalin Bansal also emphasized that RuPay SoftPOS supports the financial backbone of India—its small merchants—and is part of NPCI’s broader vision, including UPI, FASTag, and transit innovations.
One ongoing challenge is the transaction limit of ₹5000 for NFC payments as mandated by RBI. While this cap ensures security, it may restrict broader adoption for high-value transactions.
However, as technology matures and regulations evolve, NFC is poised to play a pivotal role in the digital payments ecosystem, powering faster, safer, and more intuitive consumer experiences.
As India continues to embrace NFC-powered contactless payments, businesses and banks need intelligent, scalable infrastructure to stay ahead of the curve.
That’s where CARD91 comes in.
At CARD91, we help you build secure, compliant, and future-ready payment solutions—from enabling NFC transactions to managing card issuance and acquiring, all in one platform. Whether you’re an established issuer or a digital-first business, CARD91’s robust APIs and modular infrastructure can transform your payment journey.
Let’s power the next wave of NFC innovation—together.
To know more about our offerings connect with our experts
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