Contactless revolution on the payment market

This event, being organized by the Association of Regional Banks of Russia (ARB), gathered representatives of banks, International payment systems, mobile operators & IT-companies.

The participants of this conference prophesied a revolution not only in the area of payments, but also in consciousness of people, their way of life. In the opinion of Denis Salnikov (Presidential aide of ARB) it should happen in the next 5 years and added that contactless payments will show a rapid growth by 2017.

In a word, everything happened at the conference, can be called « just about the complex». The representatives of «Nova-Card», «Payment technologies», «Smart Continental» «Ingenico» & «Delta-Systems» told the forum participants about “how NFC works”.

A demonstration of the service was held by NovaCard staff. Probably, it may soon become familiar to Russians.

Contactless payments allow transactions, simply holding a banking card with a special chip or a mobile phone with the appropriate functionality to the terminal or card reader, but not only this devices can be used to make a transaction. NFC (Near Field Communication) technology is used.

NFC is a of high-frequency wireless communication of small radius of action, which provides for data exchange between devices located at the distance of about 70 mm

The fact is that only mass production of mobile devices with NFC module will make cashless transactions everyday occurrences to Russians, because nowadays more than 80% of Russians

use mobile phones & other mobile devices actively. Mobile devices are too habitual to people, so they will use it as they use wallets now.

“Mobile operators have a huge client’s database, which exceeds even the base of the largest banks, therefore the possibility of using mobile phones will be the hot topic for all market participants” mentioned Mikhail Tatarenkov, the head of the projects of JSC NovaCard.

Today, a great number of transactions are made with the help of Mobile devices.

One of the main obstacles to NFC usage is a low number of NFC-enabled phones. But M.Tatarenkov mentioned in his report that the situation on the market will change by 2017.

It is expected that the majority of mobile devices will support NFC in the nearest future. It was also mentioned that the market develops rapidly: «if yesterday only expensive models of mobile phones were capable of contactless payments, today you can find budget models supporting NFC», - noted M.Tatarenkov in his speech.

But it should be mentioned, that all over the world & also in Russia banking card are still in usage for contactless payments. PayWave cards belong to VISA payment system, PayPass cards belong to MasterCard payment system. Both of them produce payment cards & credit cards with integrated electronic chip & antenna with the help of which the information is transfers to terminals

It was also mentioned by Anton Shigapov, (MasterCard representative) that speed, security & simplicity are the profitable advantages of contactless payments.

The speed of cashless transactions compared with cash-based increases almost twice. «If the value of goods or services up to 1000 rubles, You don't need to enter a pin-code and sign the receipt, which also saves time. Nowadays MasterCard PayPass is used more than in 26 countries of the world.

Banks are also one of the main defendants in the development of contactless payments, they show interest in new technologies and also see great prospects in NFC usage. The experience of European countries shows that such contactless payments will grow at a high speed, giving people a taste for payment «flick of the wrist».

During the conference professionals talked about the fact that all the market participants should start to work toward the establishment of standards and coordinate their actions.