The bank started a trial in July of the use of mobile phones to make credit card payments at retail outlets and other points-of-sale. It branded the service as "Citi Tap and Pay".
NFC is a short-range wireless connectivity standard for communication between electronic devices. It is expected to be used widely for so-called "contactless" transactions such as payment and fast data transfers.
"Our experience during the pilot has been remarkable in terms of the customer adoption and usage which were significantly higher than we had expected," said Vijay Ramchandran , chief marketing officer of Citi South Asia, in a telephone interview on Wednesday.
The number of transactions by customers using the phone were about six times what they would make with a card, which suggests that the contactless payments were replacing either competitors' cards or cash transactions, Ramchandran said.
The 26-week trial by Citibank in Bangalore included 3,000 customers, 250 merchant locations and nearly 50,000 purchases, according to a white paper released on Wednesday by Edgar, Dunn & Company, a global financial services and payments consultancy.
Mobile proximity payments represent latent or unlocked demand that will generate transaction growth for electronic payments, it added.
Citibank is now ready to expand the services to other cities in India. It will however have to first get more merchants to deploy NFC-enabled readers, and also get more handset makers to offer devices that support NFC, Ramchandran said.
For the trial, interested customers had to acquire the NFC-enabled Nokia 6212 mobile handset, and use the mobile service from the Indian joint venture of Vodafone Group.
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