Visa Tap to Phone Program
After trials over the last year, the tool is now live in several countries in Europe, the Middle East, Africa, Asia Pacific, and Latin America. Brazil, Italy, United Arab Emirates, and the UK will follow shortly. Visa says that with the world increasingly turning to digital payments amidst Covid-19, Tap to Phone can help millions of small and micro businesses quickly access the digital economy, prevent lost sales, and improve cash flow (“Visa Tap to Phone contactless payments program goes global”, 2020). To help support safe transactions, Visa has introduced a Ready for Tap to Phone program, enabling technology companies to become Visa Ready certified, ensuring security standards.
Sellers download an app, supported by their acquirer, and after registering and selecting their participating bank, can start accepting contactless payments in minutes. The technology builds on top of the security of an EMV chip transaction, in which each transaction contains a dynamic cryptogram that cannot be reused. Therefore, the program offers a unique approach that assures consumers of the safety and security of their payment details.
Contactless Payment
It is powered by Near field communication technology over a specific radio frequency. It facilitates the communication between the smartphone or the credit card with the payment reader when they are close together, around 0.1 meters.
RFID has been used for decades, for example, for scanning items in grocery stores and luggage on baggage claims and tagging cattle. It is now increasingly being used to enable contactless mobile payments and also in video game technology.
How NFC Works
NFC (near field communication) is what enables two devices to communicate wirelessly when they’re close together. NFC, which was introduced in the early 2000s, uses a specific RFID frequency (13.56MHz, to be exact) for close-range communications (“NFC Guide: All You Need to Know About Near Field Communication”, 2020). To date, one of the more common uses for NFC is identification cards to gain access to places such as office buildings and private garages. But increasingly, NFC is being used to power “contactless” payments.
A person who has stood in line at large retailers such as Whole Foods, Walgreens, or Office Depot recently, has probably already seen contactless payment in action. Contactless payment is a transaction that requires no physical contact between devices, which is the smartphone or tablet, and the payment terminal. Hence, people hold up their mobile gadgets to pay for goods or services.
Contactless payments are, in fact, much more secure than magnetic-stripe cards, whose incredibly outdated technology makes them relatively easy to clone. This means that one can become the victim of fraudulent charges and identity theft. Contactless payments are authenticated, meaning they are extremely hard to hack. In contactless payment, the data associated with a person’s credit card on file is encrypted and constantly changing. Thus, even if fraudsters were to hack a system, the data they found there would be useless.
Advantages of the program
The idea of paying through a mobile device can make some people uneasy, especially because they are so accustomed to keeping their wallets close to the vest. But NFC payments are extremely secure compared to magnetic-stripe cards. As opposed to the data on a magnetic-stripe card, the data involved in an NFC transaction is encrypted and dynamic, meaning it’s constantly changing.
People are getting used to doing everything on their phones. It is to the point where some people feel the need to ensure they have their devices everywhere. The fact that increasingly more people now have their phones at the ready makes NFC-enabled contactless payments the most convenient way to pay.
EMV transactions are slow to process. They are much slower than magstripe transactions. What happens during an EMV transaction is that the chip in the card sends a message to the processor to make sure everything is functioning well. However, the lag time is quite noticeable, especially if the seller has a line waiting. NFC transactions, on the other hand, are much faster than EMV transactions since they take seconds to complete a transaction.
Tap to Phone Program Benefits
- The program offers several benefits to sellers such as easier accounting, increased customer access, more ticket sizes, and secure and reliable sales. Most of the customers nowadays carry less cash hence availability of a payment system that does not require cash transactions is more convenient. Since less cash is involved, accounting for sales becomes easier because all the data is generated within a single system as the money is remitted directly into the sellers’ account, hence less risk.
- Solution providers are able to access Visa’s specifications and requirements to create an approved option. Visa guides them through the certification process after which, upon approval, they will partner with Visa clients to go to market and make the program available worldwide.
- Since cash is more vulnerable to theft, loss, and difficult to reference initial payments compared to card payments, fewer consumers are carrying it. Moreover, the transactions lack reward upon payment such as the bonus points accrued upon using the credit card. Therefore, tap to phone solutions offer consumers increased payment abilities in a quick, secure, and convenient way.
- Users acquiring the Visa program can opt to build and certify the tap to phone model individually or partner with existing third-party providers making it easy to empower more sellers. As a result, the company decentralizes the program making its availability easier and faster among businesses.
Visa Tap to Phone Partnerships
Visa is helping business innovations by enabling the sellers to turn their NFC enabled devices into contactless point of sale terminals with no additional hardware. The circumstances for one to work with a tap to phone partner include:
- Small merchants or startups who want to enable payments through mobile devices but cannot develop them on their own.
- Need for a ready-made solution one can add to their consumer-facing experience.
- Need for help from solution providers with ready solutions ready to launch.
One can also become a partner if they:
- Are a financial developer, payment facilitator, or a financial institution.
- Have solutions that can accept and process contactless visa payment in a mobile device.
- Want Visa’s Ready certification.
- Need access to standards and specifications for certification.
References
NFC guide: All you need to know about Near Field Communication. Square. (2020). Web.
Visa Tap to Phone contactless payments programme goes global. Finextra Research. (2020). Web.