Near field communication is the technology that makes mobile payments possible. When a smartphone is placed near a payment terminal, near field communication allows payment details to be communicated.
Some examples of mobile payments that utilize NFC are digital wallets like Apple Pay, Google Pay, Android Pay, and Samsung Pay.
Near field communication relies on RFID (radio-frequency identification) technology. Radio waves are used to communicate encrypted information between the two devices.
Usually, the two devices, in this case a phone and payment terminal, need to be in close proximity in order for it to work. They cannot exceed two to three inches of distance or else it will not work.
NFC is considered a secure, convenient and fast method of payment.
Before the transaction even occurs, the credit card details have already been encrypted by the device. The transmission of the information is also dynamically encrypted.
Beyond this, it is considered a ‘card present’ transaction since the device takes the place of the physical credit card. These types of transactions will qualify for the lowest rates if using a pricing model that uses tiered pricing.
Also, devices usually require an additional layer of security such as a fingerprint to authorize the transactions.
In this way, even if someone’s device is stolen, a thief will not be able to use the credit cards stored in the device.
Digital wallet payments are convenient and quick for customers. Most people never leave home without their phones and usually have it accessible at all times.
A quick hover is usually much faster compared to chip readers.
Businesses should consider introducing hardware that is able to accept NFC payments as these methods of payment become increasingly popular. They are a secure, quick and easy method of payment.
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