Paytm ‘Tap and Pay’ will let users tap their phones at stores to pay via cards

Indian financial services and e-commerce company, Paytm launched a new Tap and Pay service through its smartphone app earlier today, on January 5. The new payment feature has been made live on the Paytm app on both Android and iOS today, according to a statement from the company.

The service comes as the platform moves to tokenise the saved credit and debit card data on its platform. SBI Card, the credit card subsidiary of the State Bank of India, recently announced a partnership to offer card tokenisation on the Paytm app. The tokenisation, SBI Card said, will be applicable to all near field communication (NFC)-enabled Android smartphones.

Now, Paytm has said that all cards on its platform will be tokenised, allowing the same to be used to tap and pay through saved cards at Paytm’s point-of-sale (PoS) merchant machines. The feature has been made available in the app already, and can be used on both Android and iOS smartphones.

Tokenisation is a process where the particulars of a credit or debit card are hashed, or converted into anonymised tokens, and stored locally with a user’s device. Once tokenised, the details of the cards in question can no longer be accessed in plain, legible form by any third party apart from the owner of the card and the merchant on which payments are being made.

Tokenisation was made mandatory by the Reserve Bank of India (RBI) in mid-2021, which stated that all non-banking payment merchants and intermediaries were required to tokenise card data or delete all saved cards on file. The move saw plenty of pushback from the market, with stakeholders stating that there was conflict of technology to devise an alternate mechanism -- even with the initially extended deadline of December 31, 2021.

The deadline has since been extended to June 30, 2021, with the RBI stating that payment merchants would also be allowed to come up with their own mechanisms to keep user data safe in the meantime.

Paytm’s new tap to pay service requires an NFC-enabled smartphone to operate, as well as NFC-enabled PoS machines. The company states that users will be able to tap and make payments at eligible merchants even when their smartphones are locked, or do not have an active data connection.

Users of Paytm’s services will be able to tokenise their cards by accessing the new ‘Tap and Pay’ feature in the company’s main app on Android and iOS devices, and following the on-screen instructions for the same.