Using NFC Technology for Contactless Credit Cards
Using NFC Technology for Contactless Credit Cards

Oct 12, 2021

It’s hard to think of anything consumers are more paranoid of than credit card fraud. Once their card number falls into the wrong hands and their next statement is filled with hefty unknown purchases, disputing and reversing those charges and protecting their all-important personal credit score is often prolonged. Beginning in 2012, most active credit cards were promptly reissued as smart cards, augmenting the original magnetic strip with an embedded microprocessor chip, using the universally-adopted Europay, MasterCard, and Visa (EMV) standards. Insert the card’s encrypted chip into the merchant’s EMV reader, and a transaction is validated within 30 seconds.

Meanwhile, smartphone makers adapted the built-in near-field communication (NFC) technology in their latest models into digital wallets, where stored credit card data can be transmitted through swiping the phone across a reader at the point of sale. The primary security advantage of NFC is that the encrypted communication of every user-initiated transaction is limited to only a few inches between the device and the scanner. It can’t be secretly intercepted by crooks from a distance, such as standard RFID or unsecured Wi-Fi. Yet, this feature has been slow to gain traction in the US market. Perhaps users are unfamiliar with the relative benefits of NFC, or they’re hesitant to store their credit card numbers in a device that itself may be lost or stolen. They may prefer to keep track of their original cards in their actual wallets.

Best of Both Worlds: EMV & NFC

An appealing compromise between the security of EMV and the convenience of NFC is already gaining popularity around the world: contactless credit cards. These tap-and-pay credit cards go a step further than the EMV chip by also including a tiny NFC chip and antenna, enabling a quick swipe to complete a purchase almost instantly, faster than waiting for approval from the merchant’s EMV reader. Contactless card usage has steadily grown among consumers in the UK, Australia, and Canada. With low transaction limits not requiring an additional PIN code, equivalent of $50 or less, contactless payments have proven to be especially advantageous for quickly processing long queues of clients, such as coffee outlets or mass transit, such as London’s transport system. While adoption in the U.S. hasn’t quite been as rapid as yet, more major US issuers, including American Express and Capital One, are rolling out contactless options as an added enticement in the ever-competitive credit card market.

Besides speedier convenience, tap-and-pay capability also reduces physical wear-and-tear on plastic credit cards, especially a prestigious ultra-platinum card. Soon, tap-and-pay cards may finally win over legions of users with a security fear: built-in fingerprint scanners, powered by the NFC waves, ensure no one other than the designated cardholder can authorize a purchase. All this makes us particularly excited about the potential future of contactless payments. Yet it all hinges on the availability of hardware, millions of reliable, cost-effective NFC chips along peripheral scanner hardware for merchants large and small. We look forward to assisting fintech OEMs in filling this burgeoning demand.

Backed by 40 Years of Expertise

We contribute our 40 years of design and manufacturing expertise spanning multiple diverse markets. We look forward to discussing how we can deliver world-class products for OEMs across the globe. We understand our home Indian market, familiar with its vast regulatory and selling environments. We foster growth opportunities within India through our strong technology incubation ecosystem. We also assist global OEMs in entering the Indian market by leveraging the local supply chain and favorable operating environments for cost reductions.

Our flagship Chennai location opened in 2006 and lies within a Special Economic Zone (SEZ) for electronics manufacturing, offering economic incentives for imports and exports. This primary facility is within 90 minutes of the Chennai seaport and 20 minutes to the international airport. Additional road and rail connectivity links to the rest of India and beyond and infrastructure advantages with faster import and export clearances. We also have labor force flexibility, both technical and manual, to scale to demand rapidly.

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