Why Businesses Use NFC PaymentsĬontactless and encrypted, using NFC payments can expedite the checkout process. Upon completion, the payment is processed like a card transaction. A chip, also known as the secure element, authorizes and validates the transaction, assigning it a unique digital signature. The transaction starts when the customer unlocks a digital wallet app, selects a card to pay with, and holds the phone close to the payment reader. The data exchange involves communicating encrypted information with each other to process the payment. How do NFC payments work? As soon as the NFC-enabled reader and the NFC-enabled payment device, oftentimes a smartphone, are in close proximity, the technology goes to work.īoth the payment reader and payment device must contain chips to facilitate the data exchange. A person can simply hold their smartphone over the reader and pay instantly. Contactless payments don’t require physical contact between the reader and payment device. In recent years, NFC gained popularity for its use in contactless payments. NFC was introduced in the early 2000s, using the specific RFID frequency 13.56MHz for close-range communications.
NFC is derived from RFID (radio-frequency identification), a wireless communication system that uses radio waves at different frequencies to transfer data. NFC is a technology that enables two devices to communicate with each other when they are in close proximity. Payment devices can include e-wallets like Apple Pay and Google Pay. An NFC payment is a contactless payment that uses near-field communication technology to transfer data between payment devices and readers.
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