Every time I go to pay for something, be it groceries, gas, or movie tickets, I am faced with a conundrum. Should I pull out my right pocket phone to scan the QR code or my left pocket wallet to use the card? If I have the discipline to keep those things in their proper pockets, at least this is simple. Unfortunately, I have not arrived there yet, making it more like a plugging in the USB situation. Let's discuss the pros and cons of the available options and see if we can fix this zero world country problem.
I was upset with those bankers for using the term "Tap To Pay" to denote the technical term NFC for a while. For that, some banks even have their own posh names. At least the NFC symbol could have been kept, but instead they chose something in between the WiFi and Spotify symbols, which is so confusing that even once, I overheard someone refer to it as "wifi." This industry did something similar with ATMs, dividing people with their abbreviations, whether it was "Automated Teller Machine" or "Any Time Money." But now that I am seeing the term 'tap' everywhere, I have kind of settled. But now that I think about it, it makes a little more sense. Tap to Pay is more than just the technology behind it; as a usage, it adds a huge convenience factor by allowing you to make payments without a PIN, bringing one important feature of cash.
There is no such thing as scan-to-pay, but like those bankers, I am inventing one. There is no doubt that UPI is a game changer. For many small merchants, implementing a POS machine was a barrier to accepting digital payments, which UPI eliminated. I hope it will be far easier for the country to demonetize next time. This was so successful that it ended up being a huge surprise competitor to VISA and MasterCard, who were enjoying the duopoly in the market.
The better one
Due to the risk of card skimming, UPI is almost always a safer option. More than that, a crowded environment and the contactless nature of NFC can make this process easier while the victim is unaware of the digital pickpocketing he has undergone. At least the first two are uncommon, and the last one can be avoided by carrying an RFID blocking card in your wallet. Consider a typical pickpocket who might be able to spend as much as your daily limit before you block the card.
UPI, on the other hand, is very secure because transactions primarily take place through your device and not those of the merchant, so your device and the servers of the relevant bank are your only sources of security. It offers conveniences like the ability to scan and complete transactions simultaneously; once, I even scanned a QR code from someone else's phone screen; Even if you lose your phone, no one can access it. Even though you could call all the demerits of tap-to-pay a convenience-security tradeoff, is it more convenient than UPI?
It is really difficult to answer. Though carrying the card is a little inconvenient, consider how much more cumbersome the rest of the UPI procedure is. When compared to pulling out your phone, opening it, scanning the QR, typing the amount, and entering the PIN, tapping is very simple. Leave out the convenience as well; UPI has a reliability issue, so carrying a wallet and card is really not optional until that is fixed. Before deciding which is superior, let us take a closer look at some of their hybrids.
On the POS device, the static QRs that were previously only printed are now becoming dynamic ones. From the perspective of the consumer, this is not a desirable option because it eliminates the benefits of general static QR, which allow multiple people to scan at once and also require no merchant intervention if you know the bill amount. But perhaps as a result of the merchant's inability to track the payment with their invoices, the billing system now uses these dynamic QRs. Technically, this ought to be possible with static QRs, but for some reason—possibly due to a lack of cooperation on the part of UPI—these billing systems are unable to avoid using this workaround. Although accepting payments in a more organized manner by businesses may be a good thing, this eliminates key USPs of UPI.
NFC in Phone
Since many smartphones support NFC, you can add your card to the appropriate apps and make payments just like you would with an NFC card. Even without opening any apps, you can do this. You can keep your NFC payment behind your phone lock, whether it is a pattern, a fingerprint, or a facelock, making it more secure than using a regular card. Additionally, you can use tap-to-pay without carrying a wallet or credit card. This hybrid NFC on phones now eliminates all the cons of regular tap-to-pay with just a card. Recently released soundboxes on the market have NFC, and I hope that soon more businesses will accept NFC-based payments.
UPI Lite x
There is not much information available about this soon-to-be released UPI feature. Although we frequently equate UPI with QR, it is more than that. It is a protocol that can be used to carry out tasks using these apps, SMS, and phone calls, and it appears that it is now expanding its reach to NFC. Although scanning is simple, it is not nearly as quick or simple as NFC. Since this uses NFC and the processing mainly happens on the merchant’s machine, this may pave the way for true offline payments. This works on top of UPI Lite, which means you can use it only on the amount in your UPI wallet, and so far there is no way to automate that, making it a little harder than NFC-on-Phone.
Following the development of such successors, distinctions between UPI and tap-to-pay have become increasingly fuzzy. The dilemma now narrows down to just the phone, and priority goes to TapToPay. But this could change based on the market adoption of NFC soundboxes and UPI Lite X. It is really fun to witness these!