MASTERCARD Philippines expects banks to begin integrating near-field communication (NFC) capabilities into their apps and cards by next year as contactless transactions continue to rise.
“When I say tokenization, that is putting your card or payment credentials on your phone so that you don’t even have to take out your card. You just take out your phone and you tap on the points of sale,” Mastercard Philippines Country Manager Simon A. Calasanz said in an interview with BusinessWorld.
He added that Rizal Commercial Banking Corp. (RCBC) has already integrated NFC in their credit cards.
“We already have one issuer that’s live in RCBC credit cards. They’re already live, so if you have an RCBC credit card and you have their mobile app, you can already do that… and we have many ongoing partnerships with other banks to do the same by next year,” he said.
Mr. Calasanz said this will be an additional cashless payment option for consumers alongside quick response (QR) codes.
“To us, it’s complementing the customer choice because customers will choose to pay in whichever mode they want to. Sometimes, they’re happy to do a QR transaction, but sometimes, if the transaction is like a turnstile wherein speed is essential, then they’d much rather tap their phone or their device because it’s faster, easier, and more convenient,” he said.
Mr. Calasanz said he expects the adoption of NFC technology to drive the continued increase in contactless transactions.
“If you take a look at the contactless penetration of the Philippines pre-pandemic, it was single digit. Now we’re already at 40%. But many other countries are at 70-80%,” he said.
Mr. Calasanz added that he expects contactless payments to increase in the transport sector.
Mastercard Philippines in February partnered with AF Payments, Inc., the company that created beep cards, to enable tap-and-go payments for Mastercard cards on the Metro Rail Transit (MRT) Line 3 and buses.
A pilot phase will be rolled out in phases across MRT stations, Bonifacio Global City, and EDSA buses, it previously said.
“As people get used to the habit of taking out their cards and tapping, it makes contactless transactions much easier,” Mr. Calasanz added.
Those in provinces could take longer to adopt cashless payments amid the lack of digital infrastructure in some areas, but the company is looking to introduce offline payment solutions and is in talks with regulators, he said.
“It’s still at the early stages, but hopefully by sometime early next year, we’ll have a pilot for this kind of technology,” he said. — Aaron Michael C. Sy