The National Payments Corporation of India may enable digital payments transactions between UPI apps and point-of-sale (PoS) devices via near field communication or NFC technology.
If the plan gets clearance from the regulators, it will expand UPI’s horizon multi-fold in the peer-to-merchant segment. Moreover, the move will directly impact Mastercard and Visa, which have already captured the NFC-enabled tap-and-go payments market in partnership with banks and PoS providers.
According to a Mint report, NPCI is in talks with payment aggregators to enable the technology for PoS devices. After integrating NFC technology with UPI, customers can make payments to a PoS device from their preferred UPI app.
NPCI is also planning to roll out this function into NFC-enabled smartphones, and it is likely to approach manufacturers, added the report. Entrackr has sent queries to NPCI for the confirmation. We’ll update the story as and when it responds.
NPCI is targeting the network of 5 million PoS devices to strengthen its position in P2M space. However, it’s likely to face friction from card networks — Mastercard and Visa. Since these card networks incentivised facilitators such as banks for setting up devices, the plan will also be opposed by them.
According to an RBI data, the average ticket size of a transaction on the UPI network was Rs 2,000. If UPI manages to break into the PoS network, the merchant payments front will see a significant boost in terms of value.
UPI has returned to pre-covid levels and broke all the previous records by processing 1.49 billion transactions worth Rs 2.9 trillion in July. The addition of NFC-enabled payments technology will be a shot in the arm of UPI, which is expanding its use case with recurring payments and onboarding more merchants on the platform via QR Code-based payments system.