Payment by Phone Instead of Card: Principles of Operation and Advantages of Contactless Payment

Today in Kazakhstan, to pay for goods and services with a card, you don’t even need to take out your wallet – the transaction can be completed using your phone. This is contactless payment, which is facilitated by apps like Apple Pay, Samsung Pay, Google Pay, or Garmin Pay.

How Does Contactless Payment Work on iPhone, Samsung Devices, or Using Google Pay?

The technology behind contactless payment via phone relies on NFC (Near Field Communication), which has been in use in Kazakhstan since the early 2000s and has been widely applied since 2020. NFC is a technology that allows devices to exchange data without the need for Bluetooth or internet connection. Smartphones contain an NFC module with a microchip operating on the principle of electromagnetic induction. An electromagnetic field and induction current are generated between your smartphone and the terminal, which are used to transfer information. The NFC module’s range is limited to 20 centimeters, so the smartphone must be brought as close to the terminal as possible.

How to Use Contactless Payment via Google Pay or Other Services?

Most modern smartphones come equipped with an NFC module, enabling contactless payment without the need for an internet or Bluetooth connection. But how do you set up this technology? How do you connect Google Pay or other services?

 Step 1: On smartphones running Android and iOS, the easiest way to activate NFC is to go to the settings and select the appropriate menu option. During the setup of a virtual wallet, the system might also prompt you to activate NFC.

 Step 2: Set up the system. This can be done directly through apps like Apple Wallet, Google Wallet, Samsung Pay, or Garmin Connect. A bank card is linked to the app, and the smartphone is designated as the default payment method. You’re now ready to shop.

Apple Pay, Google Pay, and Similar Services: What’s the Difference?

The pioneers of NFC payment were two services – Apple Pay and Android Pay. Systems like Google Pay and Samsung Pay were developed based on the latter.

• Apple Pay is a system developed by the American company Apple, allowing payments via smartphones, smartwatches, and tablets.
• Samsung Pay is a service developed by the South Korean company Samsung for smartphones and smartwatches.
• Garmin Pay is a system created by Garmin, a company specializing in smartwatches for an active lifestyle. The app can be used with the brand's devices.

For several years, contactless payment by smartphone was only available to owners of smart devices from Apple, Samsung, and Garmin. In 2021, the Google Pay service (now known as Google Wallet) arrived in Kazakhstan, allowing contactless payments via NFC with any phone or smartwatch running on the Android operating system. Banks in Kazakhstan enable the use of Google Pay with Visa and MasterCard cards.

Google Pay, along with Garmin Pay, Samsung Pay, and Apple Pay, is compatible with the premium #IronCard from Bank CenterCredit. It provides access to exclusive Visa options such as travel insurance, a personal assistant through a concierge service, access to business lounges in international airports, VIP guest status under the Visa Luxury Hotel Collection program, and more. The card can be linked to up to five accounts in different currencies, and cashback on all purchases reaches up to 4%. As a bonus, the cardholder receives a #rentcar card, which offers up to 7% cashback on car rentals worldwide.

In contactless payments via Google, iPhone, or other services, card data is not used; instead, tokens – unique digital codes – are employed. This ensures the security of personal information

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Google Pay, Apple Pay, Samsung Pay, or an Alternative?

Another rapidly growing innovation in the world of contactless payment is payment via QR code. This code contains banking details and information about the specific item: the buyer points their camera at the QR code and completes the payment. The operation is quick and secure. Nevertheless, QR transactions are less prevalent than those through payment services:

• Payment via Google Pay and other apps functions without internet. This is particularly important in situations where mobile internet is unavailable, and Wi-Fi is inaccessible.
• For transactions through services, there’s no need to launch the camera or open a specific app. Payments this way take minimal time and are more convenient.
• More companies accept payment services compared to QR codes.
• Many banks offer bonuses and cashback for payments through Google Pay and other apps, while such features are not always available for QR payments.
• Services can work with credit cards, which QR transactions cannot (only debit card payments are possible).

However, QR payments allow for purchases in installments – a feature offered by the bcc smart service. This service allows companies to offer installments for up to 2 years, with approval amounts ranging from 20,000 to 3,000,000 tenge. The service connects online – instantly and without visiting a bank. It operates simply: the buyer only needs to scan the QR code. The cashier receives an SMS notification of the sale, and the company’s account is credited within one business day. Incidentally, this method can be used to sell products in installments both online and in physical stores.

All four services (Google Pay, Apple Pay, Samsung Pay, Garmin Pay) support contactless payment via NFC using Bank CenterCredit’s #katakarta credit card. The card offers free issuance and maintenance, with a credit limit of up to 7 million tenge – allowing for any purchases to be made and paid for quickly and conveniently via smartphone. Another advantage of the card is the ability to receive cashback in cash.

Cashback of up to 30% is available on purchases from partners across Kazakhstan, and in three favorite categories that can be updated each month, it reaches up to 10%. Thus, through cashback alone, you can save up to 240,000 tenge annually – save this amount in your account or spend it again.

Moreover, the #katakarta also supports bcc smart installments, enabling you to purchase items worth up to 3,000,000 tenge, paying in equal parts over 3–24 months.

The card can be issued online in just 5 minutes.

The simplicity and convenience of transactions, along with the ability to receive cashback, all contribute to the increasing number of payments through payment services. This trend is also supported by the figures. According to a study by the multidisciplinary company Strategy, in 2022, the share of Smart Pay (the general term for transactions via payment services) was 38%. For comparison: in 2021, it was 28%, in 2020 – 8%, and in 2019 – only 2%. By May 2024, the share of cashless payments (including Smart Pay) had reached a record 89% and continues to grow steadily.

This article has been translated from its original language using neural network-based translation technology.