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Near-field communication (NFC) is shaping the future of mobility and is becoming the system of choice for many mobile payment transactions. Most know this technology through buzzwords such as “tap and pay” and “contactless payments.” Now that the technology is placed in swipe-less cards, and payment-enabled smartphones, NFC is more relevant than ever, especially when it comes to mobile payments. Contactless payments using NFC technology are based on open standards. This means that if your business already has NFC terminals that can read NFC-enabled credit cards, it is also capable of accepting NFC mobile payments. However, there are a number of mobile payment platforms from which customers can choose to make purchases, and the terminal has to be configured for what you want to accept.
One of the biggest concerns around NFC payments today is the perception of security. However, the mobile payment structure is so complex that any hacking or intercepting would be very difficult. This level of security and convenience may continue to make NFC the wave of the future for credit card transactions.
NFC payments are a more secure method because data is carried on a close proximity RF signal, usually only a few centimeters between devices, which allows consumers to perform safe, contactless transactions. The most important step in the mobile payment transaction is the security element, which holds all the authorization power. Whether because of a chip in the phone or functionality that occurs virtually in the cloud, the secure element is tamper-proof and protected by a unique digital signature. Data transferred by most current apps such as Apple Pay, Android Pay, and Tap to Pay carry account numbers linked to an end users financial information and actually do not store or transfer credit card information over the RF signal.
NFC opens up a completely new world of possibilities, especially when it comes to enabling contactless payments that are to replace the old-fashioned swipe-and-sign systems. As with any newer technology, there has been plenty of hype generated around NFC payments, particularly for those using mobile phones instead of traditional-looking credit cards. Growth in payments using NFC technology is likely to continue to rise, especially as electronic and mobile payments overall soar. Investigating NFC payment options now, educating yourself and your staff, and signing up for a system that allows you a position to deliver what customers demand when they demand it will help secure your position in the payment process future.
Co-contributor: Kevin Thomas