The CFPB recently published an issue spotlight evaluating the availability of tap-to-pay technology for contactless point-of-sale (POS) purchases on mobile devices. The issue spotlight discusses the role that mobile device operating systems play, through tap-to-pay technology, in an open banking ecosystem.
Near field communication (NFC) chips enable tap-to-pay on mobile devices using radio-frequency identification technology that allows wireless transfers of data between a mobile device and a merchant’s POS terminal. Tap-to-pay is typically accessible on mobile devices through a digital wallet or, in some cases, through a payment app. To pay using a digital wallet, a consumer selects a payment card that he or she has loaded onto their device’s digital wallet, then holds the device a few centimeters from a merchant’s POS terminal to transmit encrypted payment information and make a payment.
