Why is it in the news?

• National Payments Corporation of India (NPCI) has commenced the deployment of the ‘UPI Tap and Pay’ facility for payment apps.
• Mobiles and devices with NFC capability can utilize the UPI Tap and Pay service.

About UPI Tap and Pay and NFC

• UPI Tap and Pay facility use near-field communication (NFC) technology for capturing payee’s UPI ID details.
• NFC allows devices with the capability to share information within a short range (4-5 centimetres) using electromagnetic radio fields.
• NFC-compatible device emits radio frequency signals interacting with an NFC tag within a short range.
• Unlike QR codes, NFC eliminates the need for quick response (QR) codes in the payment process.
• NFC tag is passive (can only send information), while the other device (e.g., smartphone) is active, capable of both sending and receiving information.

Benefits of NFC:

• Enables secure and convenient contactless payments.
• Utilizes encryption to ensure the security and privacy of transactions.
• Facilitates faster information sharing with NFC-enabled devices through peer-to-peer sharing.
• Can aid hospitals in better tracking patient information.

About NPCI

• NPCI is an umbrella organization operating retail payments and settlement systems in India.
• An initiative of the RBI (Reserve Bank of India) and the Indian Banks’ Association (IBA) under the Payment and Settlement Systems Act, 2007.
• Incorporated as a “Not for Profit” Company under Section 8 of the Companies Act 2013.

Note: Radio-frequency identification (RFID) and Bluetooth also use radiofrequency, but their reach is much higher (RFID: 100 meters or more, Bluetooth: 10-100 meters).