The Central Bank of Iran (CBI) is developing new mobile payment systems so people can use their smartphones or watches for making purchases. Tap-and-go cards, also known as wave-to-pay, tap-to-pay or contactless cards, contain a computer chip and antenna instead of the magnetic stripe on the back of traditional cards. The technology sends data wirelessly to a nearby terminal, completing purchases with a process called near-field communication, or NFC.
In order to use tap-and-go cards, customers need to install an application on their phone and insert their card information, director of CBI's IT Department, Nasser Hakimi said. The banks will virtualize the card with security measures inside the app. The user will only then need to activate the application and bring the phone close to POS terminals. The same is also planned for ATMs.
Hakimi noted that this process is far more secure than bank cards, since digital payments like tap-and-go has three security layers. First, users need to unlock their phones, then enter the application's security code and finally the card's password. This is to ensure that even if someone's phone is lost, it wouldn’t cause much worry since the data is safe and the application could be recovered on a new phone. Tap-and-go was officially launched on 03 May in Tehran's International Book Fair.
The CBI official said the purchase limit for these cards is IRR 2 million for now, but it will be raised to IRR 500 million within six months like other regular bank cards. Hakimi noted that fintech issues caused by limited access to payment processes will be resolved through the new tokenization system.
Source: https://www.telecompaper.com/news/iran-launches-nfc-payments--1195321