NFC (Near Field Communication) is a mobile payment processing technology trending for the past few years. Businesses have already started adapting to a changed scenario due to Covid 19, with many of them opting for NFC to process card payment transactions.

If you want to know what NFC is, how it works and how businesses can accept it, keep scrolling for this and much more.

About NFC

Since NFC is a communication technology for near field devices, it can transmit data between two given devices close enough: laptops, tablets, smartphones, and wearables. You can find NFC and payment technology in Android Pay, Apple Pay, Samsung Pay, Tap to pay credit cards, etc. In other words, NFC forms the basis for contactless payments using mobile wallets.

How Does NFC Payment Work?

NFC payment concept is quite similar to RFID (Radio Frequency Identification). But there is a significant difference between the two. Unlike RFID, NFC payments are possible only within a few inches of distance to transmit the required data. Have you ever seen the NFC payment process using a mobile wallet? The payment does not go through unless the user keeps the smartphone almost directly next to the contactless reader device. Similarly, in the case of a tap-to-pay enabled card, it has to be within few inches of the reader. You can use NFC technology broadly in three different ways.

  • Peer-to-Peer technology makes two devices establish an NFC connection to share data between them.
  • Read and Write technology consists of two devices where one is active, and the other is passive. The passive device cannot read data, whereas the NFC-enabled active device reads from the passive device.
  • Card emulation technology is a contactless NFC payment technology applicable to credit card processing, contactless payment, mobile wallets, and merchants. This innovative technology of card emulation is precisely the focus of this article.

Salient Features of NFC Payment Processing

You may not be sure of making good use of NFC for contactless payments. It usually happens with almost every new technology that people have reservations before adopting a new way of doing things. The following salient features of NFC as applied to the payment processing industry will outline the top facts that everybody considering NFC should know.

NFC makes payment acceptance easier

When we transitioned from Swiping cards to EMV chip cards, both merchants and consumers were skeptical because they felt that the dipping process would take longer than earlier. But we got used to few seconds for payment processing over the years. Presently, NFC payment makes things easier for us because it is much quicker in payment processing time.

NFC payment using mobile wallets or tap-to-pay cards is almost always faster than traditional chip card transactions. Moreover, you won’t require PIN or signatures if it involved lower sales values, further expediting it. Consequently, this leads to happier customers and quickly moving lines at checkout counters.


Several merchants usually shy away from new payment technologies thinking they are expensive. But NFC is highly affordable. Perhaps, some of you may already have the latest POS, which comes with a built-in capability to process NFC payments.

Do you know that more than 88% of POS shipped from North America in 2017 had NFC-enabled terminals? Ii implies that if you got your terminal after that, there is a high probability that you already have NFC with you. Moreover, even if you don’t have it, it won’t cost much to upgrade. NFC card readers usually cost merchants only $50 to S150.

Safe and Secure Payments

Like EMV Chip-based cards, mobile payments and NFC technology have better security features than magstripe credit cards. You might argue that NFC-enabled devices and smartphones are prone to theft. But if your device has a biometric or passcode lock, no unauthorized user can ever access your virtual cards.

Even in the case of data transmission, you get two security layers in every NFC transaction. The first security layer is your device itself. You get a second security layer of solid data encryption. Moreover, you don’t have to reveal card numbers at all during the payment process. NFC uses tokens instead of card numbers. These tokens expire once you use them; hence they are secure.

NFC: A Customer Engagement Tool

NFC transactions enable quick processing, and they are a favorite among merchants and consumers due to their enhanced security and simplicity of use. Consequently, they help in strengthening the relationship between consumers and businesses.

Businesses can engage customers by integrating loyalty programs into their NFC-enabled payment process. For instance, a customer can use coupons by tapping the device while completing a payment transaction. If you use customer loyalty programs, they can also give you valuable insights into customer buying behavior.

Customers expect the latest technology

Smartphone contactless payments are a new regular now. We are living in a dynamic society where almost everyone is using smartphones for nearly anything. These devices are always within their arm’s reach all the time. In such a scenario, consumers expect merchants to keep up with the latest and most remarkable technologies that are safer than before and are convenient. Merchants have to reciprocate by accommodating customer needs.

Most merchants follow the rule of honoring all physical cards, implying that if a merchant accepts one card brand, he must take all the other. It is going to happen with digital wallets soon. It is in your best interest to start accepting NFC payments and mobile wallets.

NFC is the new Normal

The time has come for NFC to take on physical credit cards. Cash is fast becoming obsolete. Similarly, the consumer has discovered that NFC has several benefits over their predecessor payment technologies. Before you realize it, physical credit cards may become obsolete too.


NFC is changing the payment processing trends, especially physical credit card processing. As we advance, we will see a rise in NFC technology usage with a rising trend of mobile wallets and tap-to-pay cards.

You have to adapt as a merchant by ensuring that you have the requisite hardware and technology to accept safer and faster NFC payments.


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