In order to perform a payment, end-user only needs to have mobile application capable of generating TAC (Transaction Authentication Code) which is submitted to merchant’s POS system at checkout. The merchant bundles the received TAC along with payment transaction info and sends it to bank’s acquiring and authorization systems.
The back-end checks the authenticity of TAC and if positive, sends the transaction for authorization. If sufficient funds are available at user’s payment instrument (account or card) the transaction is confirmed and user leaves the store with bought merchandise. The same approach is utilized with cardless ATM withdrawals.