Now, govt looks at contactless payments to push digitisation

The government is in talks with technology providers to encourage the adoption of new cashless technologies such as contactless payments, which use sound waves and near-field communication (NFC).

“We are looking at a lot of new technologies that enable cashless transactions with less investment on infrastructure. We are also looking at enabling digital payments with the use of voicebased and NFC-based technology. The Centre is in talks with technology providers that can enable a mobile phone to become a mobile point-of-sale (mPOS),” said Aruna Sundararajan, secretary in the ministry of electronics and IT. “We are in talks with new companies like mPayGo, ToneTag and other startups.”

NFC is a set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to communicate with each other when they are within 4 cm of each other.

mPayGo, a fintech startup, has launched an mPOS service that lets a merchant accept credit, debit card and net banking payments on their smartphone without the use of any external equipment like a dongle/terminal.

“All that merchants need to have is a smartphone and a Net connection to process card payments,” said Neeraj Tandon, co-founder and CEO of mPayGo.

ToneTag is a contactless payment app, which uses sound waves to enable payments.

“The major concern for the government is that only 20% of the entire cellphone-using population in India has smartphones,” said Kumar Abhishek, founder of ToneTag. “With ToneTag, in case of smartphones, the transfer is done by a single touch using sound waves. In feature phones, users need to dial a toll-free number, and the payment instruction is carried out through interactive voice response.”