What are NFC mobile payments?

  • NFC is a technology that allows card readers and some devices to communicate over a short distance.
  • NFC payments can be accepted using Android, iPhone, laptops, smart tables and watches, and NFC-enabled credit cards.
  • NFC is very convenient for businesses and poses very little additional risk.
  • This article is for small business owners interested in flexible payment processing options.

What are NFC mobile payments?

NFC mobile payments are a contactless electronic payment option that uses near-field communication technology to communicate between hardware such as phones, tablets or credit cards and NFC-enabled readers. This technology allows businesses to quickly and easily accept payments from customers without employees having to handle money or cards.

NFC mobile payments are an ideal payment processing option for a wide range of businesses, including retailers, restaurants, and professional service providers. Businesses that choose to accept NFC payments should expect to pay a fee that matches normal credit card processing fees (pennies per transaction plus a few percent of the transaction value).

And, while many modern credit card readers are NFC-enabled, some businesses may need to purchase a dedicated reader for $ 50 to $ 150.

What is NFC?

NFC stands for Near Field Communication and refers to the technology that enables communication and data sharing between wireless devices that are in close proximity to each other. NFC has many applications, including access control systems, identity verification, and wireless device pairing.

To remember : A collection letter should include things such as debt owed, the original due date, and warnings of impending legal action if necessary. NFC technology is also used for payment processing. By using NFC-enabled devices to communicate over a short distance, businesses can process payments without staff having to handle cash, checks, or credit cards when customers present payment.

NFC is also easy to use. Accepting NFC mobile payments is a lot like using a traditional credit card with a magnetic stripe. In fact, many card readers are enabled to accept NFC payments – the difference is that with NFC, a transaction is initiated not by reading a magnetic stripe on a card, but by having an NFC reader send. a signal that is picked up by an NFC antenna. on an NFC-enabled device.

How do NFC mobile payments work?

NFC payments work through a reader which, when initiated through a point-of-sale system, sends a signal seeking to communicate with an NFC-enabled payment device. When the antenna of an NFC-enabled device (such as an NFC-enabled phone or credit card) is detected by the reader, the payment device communicates the payment information to the reader and the payment is processed.

Key to take awayTo remember : In terms of accepting payments, NFC is actually relatively easy for a business to use. In most cases, setting up to accept payments via NFC is no different than setting up a more conventional credit card dealing with the same equipment.

So, accepting NFC payments starts with choosing a payment processing company that offers NFC compatible technology. The business then creates a merchant account with their bank or processing company, connects the card reader, and begins accepting payments using the installed NFC reader.

6 steps to process NFC mobile payments

  1. Choose a payment processor
  2. Choose an NFC-compatible reader
  3. Install reader and software
  4. Connect to the Internet
  5. Set up a merchant account
  6. Accept payments

Once you’ve processed payments for your business using an NFC reader, the product will go straight to your merchant account just like normal credit card transactions. Often times, these products are automatically transferred to your business bank account the next day, but you may need to initiate transfers periodically to clear your balance.

Types of businesses that use NFC payments

NFC payments are a great option for many types of businesses. This is almost never the only option offered, but it is a great benefit for many customers, as well as a convenience for company staff, especially for businesses like retailers who process many payments each. day.

  • Brick and mortar retailers. Clothing stores, antique shops, household goods stores and more.
  • Mobile retailers. This includes street vendors, flea market kiosk operators, and other mobile operators.
  • Restaurants and food trucks. NFC is especially useful for those who do a lot of take-out stuff.
  • Health care providers. Doctors and dentists’ offices, therapists, counselors and pharmacists all benefit from increased convenience thanks to NFC technology.
  • Fitness and leisure facilities. This includes gyms, physiotherapists, and other recreational facilities that serve individual consumers.
  • Charitable and non-profit organizations. NFC is great for hosting events or processing payments for mobile fundraisers.
  • Professional service providers. Few lawyers or accountants accept NFC payments, but many professional service centers do.

While NFC payments are great for many types of businesses, they aren’t great for entrepreneurs or businesses that don’t accept credit cards. If you already accept credit cards then offering NFC can be a big plus; but, if you are a consultant or run a cash business then NFC may not be useful.

Types of devices that support NFC mobile payments

Businesses that want to process payments via NFC will need an NFC reader. Once they have an NFC reader connected to their point of sale, businesses can allow customers to pay for transactions using a variety of devices, including:

  • Smartphones. Android and iPhones offer applications to enable mobile payments.
  • Connected watches. Watches with a portable operating system often support NFC.
  • Tablets. Like phones, tablets can also be NFC-enabled, although a bit difficult to manage when initiating payments.
  • Laptop. Using a laptop to process a payment would be awkward, but it is technically possible.
  • EMV chip credit / debit cards. Most of the major credit cards issued today have EMV chips installed and support NFC technology. It is the most common form of contactless payment device.

Are NFC mobile payments safe?

NFC payments are generally considered secure as a method of accepting payment – the technology is just as secure as regular credit card processing. The only difference is that the risk of fraud may be slightly higher with NFC, as businesses often don’t manipulate customers’ NFC-enabled devices to verify their identity.

On the contrary, concerns about NFC security are more common for consumers than for businesses. Some potential problems from a business perspective include:

  • Proximity. Users must be within inches of an NFC reader in order to initiate transactions.
  • Fraud. It is more difficult for businesses to ensure that a customer has the right to issue a payment using their NFC-enabled device, as they rarely handle the device used for payment.
  • Piracy. NFC payment records can be hacked just like anything else.
  • User oriented. Customers should know how to initiate payments in order to properly use their NFC-enabled device.

In addition, a higher risk of hacking. For this reason, NFC technology is generally less secure than other payment methods, including traditional swipe transactions, but only slightly.

The main security risk with NFC mobile payments is that they rely on a wireless signal. In addition, since the payment is contactless, the cards are generally not managed by the staff. Increases the risk of a card being used fraudulently in your business

Pros and cons of accepting NFC mobile payments

The acceptance of NFC mobile payments allows businesses to offer customers a lot of convenience and flexibility. But it also presents unique risks for the business. Here are some other pros and cons of using this technology.


  • Convenient for businesses and customers. Customers can use many different devices for payment, and company staff do not need to handle the device.
  • Suitable for a wide range of businesses. NFC technology can be used in a range of applications by businesses in many different industries.
  • Facilitates transparent payments. Payments are made within 24 hours and are often transferred to the company’s checking account the next day.
  • More secure than other payment methods. Many NFC devices have multi-factor authentication which makes it difficult to intercept payments while they are being processed.

The inconvenients

  • Can be expensive, especially for large companies. Businesses processing credit card or NFC payments pay several cents per transaction, plus a percentage of the total transaction value.
  • May be sensitive to security issues. Like other credit card transactions, payments processed using NFC can be hacked.
  • Higher potential for fraud. Since company employees typically don’t manipulate customer devices when initiating NFC payments, they typically don’t verify that the customer is eligible to spend funds using the NFC device shown. .

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