NFC payment is a new form of cashless transaction. The use of NFC (Near Field Communication) technology makes the process more secure and convenient than the traditional one.
This is because it eliminates the need to hand over your credit card or debit card details – you simply tap on a special NFC-enabled device and that’s that. This article gives an in-depth analysis of this payment method.
How NFC Payment Works
NFC payment happens between two devices – one device acts as the initiator (for example, NFC tags), while the other is the responder (for example, an NFC reader/ a smartphone). The initiator sends data to the responder by tapping it against the latter’s device.
What Happens During An NFC Payment?
When you tap your NFC compatible smartphone or another device against an NFC reader, the following things occur:
- The initiator (your phone) sends out an ID request to all nearby devices.
- A responder with the same ID (in this case, your mobile wallet) responds by sending its details (contact information).
- The initiator device gets the information sent by the responder. It then gives you access to it (in this case, your wallet).
What Is Required For An NFC Payment?
The following are required for an NFC payment:
- An NFC-enabled device of both parties – that is, the initiator and the responder.
- An NFC reader that allows the initiator to send out an identity request to nearby devices.
- A secure connection between your device and the wallet you have installed on it. This is where appropriate security measures should be taken by all parties involved. Foolproof measures help in avoiding unnecessary hacking attempts or data theft.
What Are The Benefits Of Using NFC Payment?
NFC payments offer several benefits that you won’t get with other payment methods, which explains their rising popularity. Some of these NFC payment advantages include:
- Faster Check Out
Contactless NFC payment is straightforward, and it’ll most definitely reduce the time required for checkouts. An average transaction will take less than 15 seconds, thus allowing you to check out at least 4 customers per minute.
All you have to do is tap your phone on the NFC reader, authorize the transaction, and you can leave in no time. The transaction speed ensures optimum customer satisfaction and is likely to increase your turnover.
- Convenience and Enhanced Customer Experience
The fact that you don’t have to wait in long queues to check out makes it convenient. It also means that you’ll save time, effort, and money.
Additionally, the use of NFC payments enables shop owners to concentrate their efforts in other areas that are more demanding. For example, checkout requires only a few staff. As such, you can distribute other staff members to other critical areas, thus boosting the overall customer experience.
- Guaranteed Security
NFC payment system guarantees optimum security through encryption and tokenization (keeping personal information safe). Most banks limit the transaction to small amounts per day. As such, it is not possible to lose a large amount of money at one go. Even better, you’ll be able to freeze a lost card. Thus, you can avoid unauthorized purchases.
The system also comes with built-in security features that prevent double charging. This means that the same transaction can’t happen twice, even in cases of defective readers.
- Reduced Risk of Theft
Unlike other methods, NFC payments are suitable for small transactions. Customers no longer have to carry cash. All they need is a smartphone or an NFC-compatible device with appropriate applications installed on it.
As such, there is minimal risk of losing your money through theft. Even if you’re attacked and you lose the phone, you’ll simply deactivate it within a few minutes and the attacker will not make any unauthorized purchases. With the tech, you’re safer than when carrying large amounts of money.
Disadvantages of NFC Payments
Potential customers are likely to have several questions about this technology. For example, they may be worried about the security of their data being used for fraudulent purposes or malicious attacks.
However, many banks have put in place adequate measures that will protect you from any form of unauthorized access or misuse of your information. Thus, if you’re concerned about your data, you need not worry.
Who Should Adopt NFC Payments?
If you’re a shop owner, no doubt using NFC payments will change the way your business works. It will make it easier and more efficient. But who should adopt such systems? Here are some formsof businesses that can work best with NFC payments:
- Hotels. Customers can pay their bills and settle other financial issues without stepping out of the room. This is where NFC payments come in handy as you can send a request from your phone and staff can use a smartphone or an NFC compatible terminal to process such requests within seconds.
- Call centers. If you own a call center and if you want to make things easier for your clients, you need to use NFC payments. For example, you can allow them to make payments online or on their phones as discussed earlier. Just make sure your customers know that you accept such payments and encourage them to try it out the next time.
- Call Taxi Service Providers. Let’s face it – we’re living in a more mobile world than we ever were. For this reason, there’s no need to wait at a taxi rank or near a bus stop. Instead, you can let your customers call their driver and pay for the ride in advance using NFC payments. This way they’ll know when the driver arrives and how much it costs them beforehand.You can also choose to add discounts if your customers use this payment method. This way they’ll have an incentive to pay for the rides in advance.
- Hospitals.NFC payments will not only benefit your patients but also your hospital as a whole. For example, you can create a virtual wallet for your patients and allow them to make prepayments using their phones or other devices. This way you won’t have to handle cash and patients will be able to pay for the services they require without having to queue up.
NFC Payment Compatibility
NFC-compatible mobile apps can be downloaded from various app stores. Alternatively, you can download a desktop application that will enable your phone to work similarly.
For example, Android supports Google Wallet while iPhone users have Apple Pay. Other devices that are NFC compatible include Samsung Galaxy S4, Nexus 4, and other high-end devices.
Many banks and financial institutions now support this payment method. Additionally, NFC-compatible terminals are available for shops and other public places that wish to offer the service to their customers. Thus, it is becoming popular as well as useful especially because of its convenience and speed. More and more people will shift from the latter to the former.
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