Unlocking the Benefits of NFC Payments: Faster, More Secure, and Better Customer Experience

The NFC feature has a special place in mobile payments' vast and luscious landscape. NFC has emerged to address the consumer’s need for faster payments and the merchant’s need for quicker and more manageable payment processing.

What are NFC payments?

This payment type uses contactless technology to make payments. Names near-field communication (NFC) enables data exchange between readers and payment devices such as tap-to-pay cards or e-wallets. You can use an e-wallet (e.g. Google Pay, Apple Pay) in an intelligent device (smartphone, smartwatch).

To work, NFC payments require that the paying device and reader are in proximity (approximately 2 inches apart). NFC payments became popular because they were contactless and encrypted, translating into increased security and faster checkout. This payment type requires a specialized reader, which can be found with most merchants due to the increase in contactless payment popularity.

NFC payments: benefits

• Improving customer experience: When faced with NFC technology, customers can use the preferred payment method. According to Visa data, 73% of all card transactions used contactless cards. Also, reports show that 80% of transactions will be via internet-backed devices.
• Speedier checkout: When compared to in-person payment options, contactless payments are reportedly ten times faster, according to Mastercard.
• Better security: As opposed to regular swiped card payments, NFC technology is reportedly more secure. According to the New York Times Wirecutter, NFC tech helped to decrease in-person credit card fraud.

How do NFC payments work?

Like radio-frequency identification (RFID) and Bluetooth technologies, NFC is more limited than the former since it must be used near the reader and gains the upper hand on the latter since NFC doesn’t require manual device discovery and syncing and uses less power.

According to FIS Global, NFC technology can be used in three different ways:

• P2P (peer-to-peer): two devices with NFC technology can be linked for data sharing.
• Read/write: a phone can register data from a passive device that cannot read information.
• Card emulation: the way that NFC tech is used most, you can use an NFC device like a contactless card through card emulation.

Combining NFC with SoftPOS technology

Businesses that wished to improve customer experience and drive engagement started incorporating NFC and SoftPOS technology. Where do they both meet? For example, if we look at Paymob, we can see that its SoftPOS solution goes hand in hand with its Tap-to-Phone technology. A Visa-designed feature, Tap-to-Phone allows merchants to use their phones to accept NFC payments. Tap-to-Phone merchants remove the need for connecting additional devices and external hardware, which translates into a faster payment experience for both the customer and the merchant.

The bottom line

Mobile payments are becoming the new normal because more consumers are getting used to paying by smartphone, and customer expectations are rising. Through NFC technology, customers benefit from a better experience as they have every payment method available at the checkout, the payment process is quicker, and improved security is ensured because NFC payments are encrypted.