From Bitcoin to banking apps, there are now more ways than ever to make and take payments. Is your business using NFC payment technology yet? It’s not only convenient and secure, but you probably have everything you need to get started on your phone. But what does NFC mean, and is it right for you? We’ll cover the NFC meaning along with its benefits below.
What does NFC mean?
The term NFC stands for near-field communication, and it is the technology that enables contactless payments. In a nutshell, it allows two smart devices to connect and share data when held close together. A few examples of the NFC meaning in action include mobile wallets like Apple Pay and Google Pay, as well as tap-to-pay cards. While in the past you’d need a specialty card reader to accept NFC payments, with the advent of built-in NFC technology in new mobile devices that’s not always the case anymore.
How do NFC payments work?
You can compare NFC to similar technologies such as radio-frequency identification (RFID) and Bluetooth, both of which also enable devices to communicate wirelessly. However, NFC payment differs because it requires close contact to function. It uses a very specific RFID radio frequency of 13.56Mhz that’s only activated at close range. It’s also more automated than Bluetooth, which requires manual syncing of devices or device discovery before connection takes place.
There are three primary ways to use NFC technology:
Peer-to-peer devices can establish a connection to wirelessly share data
Read/write technology allows an active device to read data from a passive device
Card emulation allows an NFC device to function like a contactless credit card
There are NFC chips in mobile devices. When two NFC phones are held together at close range, the chips are activated to exchange encrypted data. This makes an NFC transaction both fast and secure. You can make the process even more secure with layers of protection. For example, with digital wallets the user must first unlock their device with biometrics, unlock the app, select the method of payment, and click to confirm.
How can businesses take NFC phone payments?
If you’re interested in accepting NFC phone payments from customers, there are a few different options. In most cases, you’ll need to purchase a specific NFC-enabled reader, which operates as a point-of-service checkout terminal. In addition to the NFC reader, you’ll also need to ensure that your payment processor accepts digital or mobile payments. Fortunately, most of today’s processors include mobile payments as standard. Just be sure to compare processing fees carefully, as these can vary widely between providers.
Benefits of accepting NFC payments
There are numerous benefits of NFC phone payments, both for consumers and merchants. This technology has been established for some time in the form of contactless card readers, which means it’s been fine-tuned for maximum efficiency. Whether you are using a contactless reader or a mobile phone app, here are a few of the primary benefits:
Customers enjoy a streamlined, faster checkout process. There’s no need to fiddle around with signatures, typing in specialty codes or waiting for the cashier to issue change.
There are multiple types of NFC payments which gives customers plenty of choice, whether they prefer digital wallets like Apple Pay or tapping a contactless credit card.
Security is a major benefit of NFC payments. Payment details are encrypted, and the technology only works at close range between two devices. While Bluetooth can pick up signals from multiple devices in the area, this makes NFC more highly specialised to reduce fraudulent payment activities.
For all these reasons, it’s worth making NFC phone payments part of your go-to payment options.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.