ICICI Bank adds contact-less option in Pockets wallet

This move by the country's biggest private sector bank, could catalyse penetration of near-field communication

ICICI Bank adds contact-less option in Pockets wallet
Image: Rupak De Chowdhuri / Reuters

NFC, which stands for a set of wireless communication technologies called near-field communication, has been around for decades, but hasn't really taken off in India.

That might change in the months and quarters to come as the country's biggest private sector bank, ICICI Bank announced on Tuesday it is backing the technology, adding a contact-less payment option, within its mobile wallet app, Pockets.

"We want to open the world to our customers ... the more channels you open, the more interactions there will be," Rajiv Sabharwal, executive director at the bank, told reporters in a phone conference from Mumbai on Tuesday. "The whole effort is to reduce friction" in all banking transactions, he added.

Mobile payments via NFC require smartphones equipped with the relevant radio chip. Such a payment will also need a mobile Internet connection, at least for the fraction-of-a-second over which the payment happens. These transactions will also require that the shops where one might want to make such payments have NFC-equipped point-of-sale terminals. Wave the smartphone near the terminal or gently tap it, and you are done.

The number of such terminals in the country is currently a measly 40,000, but Sabharwal expects it will rise to about a 100,000 in the next three to four months and thereafter will see a "hockey-stick" growth as more businesses take to it - meaning a sharp increase in adoption.

The bank's backing has addressed one important obstacle in the way of NFC's adoption - an anchor player of sufficient heft to evangelise the technology's use. The new option was built into Pockets partly in-house and partly with help from Mahindra Comviva, a mobile value-added services technology provider, Sabharwal said.

And initially, the service will be available on smartphones running the Android operating system, version Kitkat or higher. ICICI Bank employees get to use it first, starting right away and the bank's customers will see the option starting next month.

The bank has some 30 million debit card holders and another 4 million credit card users. It sees about 5 million active mobile banking users each month, Sabharwal said.

The pay-by-NFC option uses a technology called Host Card Emulation to create virtual replicas of a user's existing card. The virtual card is stored in the Bank’s well-secured storage network. The bank's systems  send out one-time unique token numbers for each transaction, which are encrypted and sent to the merchant’s terminal, without disclosing any information of the card.

ICICI Bank is in talks with various merchants as well as new-age services providers such as Uber Technologies Inc to get them to support the NFC option, Sabharwal said.

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