What Are NFC Payments?
NFC is simply Near Field Communication, a new technology that allows people to make payments conveniently and quickly across Europe and America. This technology will enable devices close to each other, usually within up to four centimetres apart, to interact and share information. Devices that utilise the NFC technology include card terminals, mobile phones, and contactless cards.
With this new technology, you do not have to insert a card or input a pin; you only need to tap your debit/credit card on the card terminal to complete the transaction. Aside from the convenience it offers, NFC payments are now popular because they are highly secure, encrypted, and contactless. Keep reading to find out how NFC payments work, how to accept NFC payments, and many more.
How NFC Payments Work
The NFC payment process is pretty straightforward. Once the payment device and the reader are activated and close to one another, the NFC chips trade encrypted data to complete the payment. This process is lightning fast and creates a convenient and secure checkout flow. As a result, many people are adopting this technology as their preferred consumer payment method.
Although the process is straightforward, there is a bit of technicality that goes on in the background. For instance, the wireless/contactless connection between both devices makes use of radio waves similar to RFID (Radio Frequency Identification) labels used in warehouses, stores, and other wireless tracking apps. Most NFC chips use a particular RFID frequency, which is 13.56MHz, that can only work when both chips are in very close proximity.
For improved security, e-wallets can only communicate with the NFC reader when users unlock their devices, choose the payment card to use, and confirm payment. Aside from that, NFC readers can only connect to one NFC payment device at the same time. That way, a nearby customer cannot accidentally pay for another person’s purchase. Additionally, customers can store several credit/debit cards on their mobile, reducing the need to carry multiple cards in their purses or wallets. That way, the chanses of losing credit/debit cards become minimal.
How to Accept NFC Payments
To accept NFC payments, there are a few things that you need to put in place. For a start, you need to have an NFC-enabled reader in place. Aside from that, your credit/debit card processing plan also has to accept digital e-wallet payment (most merchant account providers let you do this. Typically, you need to pay processing fees, and it is usually the same as regular card payment processing fees. However, the actual pricing might vary depending on your selected merchant account and plan.
Benefits of NFC Payments
Using NFC payments come with numerous benefits, and even from the previous sections, you would have noticed a few benefits noted. However, here are a few of other benefits you will enjoy with NFC payments.
Faster Checkout Process
With NFC payments, one thing is guaranteed, and that is a faster checkout process. According to a report from Mastercard, contactless payments are 10 times faster than other in-person payment options.
Better and More Convenient User Experience
NFC payments allow users to pick the payment method they are comfortable using. That way, you get to pay with your most convenient and trusted wallet. Another report shows that 40% of consumers prefer digital e-wallet payments, while 37% prefer contactless card payment methods.
When you choose NFC payments and activate the process, your mobile device or card communicates seamlessly with the reader. In a few seconds, the process is completed.
The NFC technology offers better security compared to swiped card payments. Moreover, NFC payments have contributed to the reduction in credit card fraud worldwide.
Another benefit of NFC is that it allows transactions with not only payment systems. You can make a payment with a simple tap on your phone.
What Is NFC Used for?
NFC is used for several things around the world today. In the beginning, the NFC technology was used for file transfer. However, nowadays, there are better, faster, and simpler ways to perform peer-to-peer transfers. As a result, the NFC technology is used for other interesting things, highlighted below.
One of the most notable things NFC is used for is making instant payments. As it stands, many top payment services like Paykassma, Apple Pay, Google Pay and Samsung Pay among others now utilise NFC technology for cashless payments in many countries worldwide. With most of these services, users simply need to add their card numbers to the app to make NFC transactions.
Unlocking Car Doors and Homes
Another exciting example of the NFC technology is that users can unlock their car doors using any NFC-enabled mobile phone. The technology made its debut with the 2021 BMW 5 series. Once this technology is set up and enabled, you simply need to tap your car door handle to unlock without having to use a key. Additionally, the same principle is applied to unlocking the doors at home using an NFC-enabled key or smartphone.
Connecting with Devices and Accessories
We now frequently connect our accessories to our smartphones but sometimes connecting devices can be annoying. With NFC, as long as both devices support NFC, you can establish a connection seamlessly within seconds with a single tap.
Connecting with NFC Tags
NFC tags come in handy for various reasons as they can provide different kinds of information to your smartphone. Usually, the NFC tags contain web address links. However, they can be set to execute other actions with your smartphone, such as turning down the ringer, turning on the Wi-Fi, etc. Interestingly, the tags can be embedded into almost anything.
Is NFC Safe? Pros and Cons
We’ve talked about the different benefits and advantages of using NFC. However, one question comes to mind, is it safe? Like any other thing, NFC comes with certain drawbacks that you might want to keep in mind. For instance, the technology is not excluded from eavesdropping/man-in-the-middle attacks. However, because of the close proximity needed, this treat is not a big deal. At least before anyone could steal your data, they have to be very close to your device. Aside from that, below are some of the cons of the NFC technology.
- It’s not supported by all smartphones.
- Some of its features are still in the beta phase.
NFC payments have become quite popular, and many people are beginning to take advantage of the exciting and stress-free technology. With NFC, in-person purchase has become very easy, and it has helped reduce debit/credit card losses and fraud. We expect to see more businesses and customers around the world adopt this incredible payment system with time. NFC is undoubtedly going to be a big part of day-to-day commercial activities worldwide because it is straightforward to use and hassle-free.