How NFC Payments Work
NFC stands for Near Field Communication, and it’s a wireless technology that is used to communicate between two devices at short range and at a very fast pace. For short range contactless payments, an NFC chip is embedded in the card, and it enables payment to be made just by touching the card to a pay terminal.
In the US, contactless payments are available via MasterCard PayPass and Visa PayWave, and these work using the MasterCard and Visa contactless payment networks.
The good thing about contactless transactions is that they’re super-fast. Since all interactions happen in less than one second, the amount of time between making the payment and getting charged is almost zero.
Another advantage of NFC payments is that you don’t need to carry a wallet or purse to make a payment. Besides, the cards that are issued as part of contactless payments are usually thin and small enough to fit in your wallet, so you don’t have to carry an extra wallet or purse to make payments.
Moreover, with this form of payment, you don’t need to carry cash, as all your transactions are via a stored value stored in your card. Now, if you’re someone who saves a lot of money, then this type of payment would work really well for you.
How to Accept NFC Payments
The near field communication (NFC) protocol was first introduced by Nokia in the year 2000. This technology is used to establish a secure connection between a mobile phone and a carding terminal. This technology allows users to transmit data from their mobile devices to the contactless payment processing reader thus avoiding swiping the card through a card reader.
According to the World Bank, in 2014 the value of payments in Europe using contactless payments reached 7.1 billion representing 8% of all payments. The global average of contactless payments was 1.1% in 2014. This number is expected to grow as more businesses and consumers integrate this technology.
A contactless payment terminal reader can be used on a variety of different cards, this means that the technology is scalable.
Here Are Some of the Things You Need to Know about Contactless Payments
The Contactless Process
Once a card has been swiped, a magnetic field is generated and the data from the card is transmitted to the contactless payment terminal reader.
Contactless payment transactions are faster and more convenient as you do not have to enter credit or debit card details.
The original data, which is stored on the mobile device’s chip, is also used to verify your identity.
Contactless payment transactions ensure that contactless cards and mobile devices are being used by the actual cardholder.
NFC Payment Outlook for Small Retailers
One of the most exciting developments of the past few years has been the rise of the contactless payment.
The innovation has been designed for use with contactless terminals within merchants, as well as payment cards and mobile phones. The device is contactless, meaning it does not require users to enter their PINs digitally, and is fairly safe for use.
It is fast, easy, and it can be more beneficial for the consumers and retailers as a result of the reduction in the cost of the transaction to their businesses.
NFC (Near Field Communication) is another name for this contactless payment technology, and is an acronym. It stands for, Near Field Communication.
What does it do?
NFC lets consumers to make contactlessly when purchasing items and to use their mobile device to automatically complete payment.
At this stage, it is common to use NFC implementations in mobile devices so that you can pay for the services. But this might become more versatile in the future, as it has the possibility to be used with physical items purchased as well.
Smartphones will therefore be enhanced in functionality to be able to make contactless payments as opposed to using your physical credit card as an alternative to a mobile payment.
One of the main reasons businesses are now using this technology is to increase the payment speeds and efficiency, so you no longer need to wait for your buying process to be complete.
The Bottom Line
You’ve probably heard about contactless payments on the news, but you probably aren’t quite sure just what they are. If you’re new to contactless payments, fear not! Here’s everything you need to know about contactless payments and how to use them.
What are contactless payments?
Contactless payments are any form of electronic payment that can be made simply by passing a card or mobile device over a credit card reader or similar device. These are usually considered as payments made through NFC payments, but can also be made using special readers for contactless cards or magnetic stripe technology.
Contactless payments are also used for accepting rental payments from both cars and bicycles. This type of payment is accepted widely, including at gas stations, cafes, and convenience stores.
Contactless payments allow for quicker processing, stop the error of customers fearing the transaction was declined, and allow the retailer to offer a wider range of payment options. Instead of offering the traditional credit card options, contactless payments are commonly used for alternative payment options such as tap and pay. These types of payment include Samsung Pay, Apple Pay, Google Pay, and Amazon Pay.
Why contactless payments?
In comparison to other types of electronic payments, contactless payments are faster, safer, and easier to use.