How NFC Payments Work

Technology is changing the world around us at a rapid rate. It has made its mark on nearly every kind of industry, including that of payment processing. Mobile devices are quickly becoming an all-in-one device for our everyday lives. Not only can we use them to manage our bank accounts and perform other basic tasks, they are now an option for making payments. This approach to paying is known as NFC payment and it is quickly gaining in popularity. If you are a merchant and you have not yet considered NFC payment, you have come to the right place. Let’s take a look at what it is and how it works below.

How Does NFC Payment Work?

First, let’s take a look at how this form of payment actually works. NFC, which stands for near field communication, is at a very basic level simply “contactless” communication between two devices. In regards to payment processing, it is the technology that enables your phone to communicate with the payment terminal to initiate a transaction.

NFC Terminals are great for taking payments at the table for Coffee Shops, Restaurants and Cafes.

This form of payment is a further development of an old technology known as radio-frequency identification which uses radio waves to communicate between technologies. It was first used for such tasks as keyless door locks and now can be seen in what is referred to as “contactless” mobile payments. This term simply refers to the fact that with NFC payment, a transaction can take place without even needing the phone or payment terminal to touch. Instead, the two devices just send encrypted data across radio frequencies. It is quick, convenient and more secure than most other forms of payment processing.

What is the Future of NFC Payment?

So what is the future of this form of payment? Is NFC changing the landscape of payment processing as we know it? Near field communication will become more and more prevalent as the years go by. Some speculate that NFC and Mobile Wallets with replace physical cards altogether, especially with things even like State IDs going mobile.

One specific reason why this form of payment will start to take hold is that it is becoming more reliable and more secure than other payment forms. One way in which NFC is more secure is with what is called user initiation. Essentially, the payment process must be physically initiated by the customer. This is generally accomplished by starting up the application on your phone, or using your fingerprint to authenticate which then connects to the store’s reader. In other words, a thief is unable to do anything if your NFC application isn’t open or near a terminal.

Even some mobile watches like the Apple Watch support NFC.

Going beyond security, NFC payments like Apple Pay are gaining in popularity due to the fact that they provide convenience and improved customer experience. Retailers such as Macy’s have realized this and are making this option available to their customers. It is not too crazy to assume that many more will follow suit.

NFC Payment Wrap-up.

These days, we are always looking for the next big thing as this technology-driven world continues to change around us. With its advanced security, convenience and better customer experience, we can expect to kiss our wallets goodbye. As a merchant, you would do well to begin implementing NFC payment into your checkout experience so as to not be left behind in this ever-changing world of technology and payment processing. If you have any questions about near field communication payments, please be sure to ask how Tidal Commerce can help.

We're the gold standard in payment processing

Providing our merchants with the latest tools to get the job done, from cutting edge payment solutions to award-winning technical support available 24/7/365. With Tidal Commerce you have a payments partner that will be there from your first dollar to your millionth.

circle We're available

Reach out today and find out how much you could be saving.