Mumbai: Country's largest private sector lender ICICI Bank launched a smartphone-based application which will allow users to pay for purchases by simply tapping their smartphones on a merchant terminal at a shop.
The service, launched for the employees of the bank, will soon be made available for over 35 million debit and credit card holders of the lender, ICICI Bank's Executive Director Rajiv Sabahrwal told reporters on a concall.
A near field communications (NFC) technology-enabled smartphone can be used to complete the transaction, he said, adding that 90 per cent of its 5 million active mobile banking customers use such phones that run on the Android operating system, on which the technology has been rolled out initially.
As per RBI regulations governing NFC-based payments, people can pay up to a maximum of Rs 2,000 for a single transaction.
"With India becoming the second largest market globally for mobile subscribers as well as smartphones, we expect this to be a big game changer in the Indian payment industry," he said.
Sabahrwal explained that the service makes use of the Host Card Emulation (HCE) technology, which creates 'virtual' cards for 'physical' credit or debit cards issued by the Bank.
The virtual card resides in the bank servers, a bank statement said, adding that even though the virtual card number may be different from the physical card, other features like the expiry date remain the same.
For each payment via the virtual card, a one-time unique token number is created by the bank's server, which is encrypted and sent to the merchant's terminal, without disclosing any information of the card.
The customer will have to download the bank's 'Pockets' application on his mobile phone and then select the 'Touch and Pay' icon from the menu.
Before a transaction, a person will have to select the virtual card through which he wants to pay and once the shopkeeper has put in the amount to be debited in the system, he just has to wave the smartphone near the reader.
Sabahrwal said at present there are 40,000 merchant locations accepting NFC-based payments and expects the number to go up to 1 lakh in up to four months.
Other lenders, including the country's largest lender State Bank of India, have launched NFC-based cards. ICICI Bank today said it is the first to integrate the solution with mobile phones.