Near Field Communication (NFC for short) is a set of radio standards that allows quick communications between two devices just by holding them close to each other. The technology is being used in many different ways, but one of the most popular applications is contactless payment. This generally requires:
- An NFC enabled payment card. Many credit card companies and banks are now issuing cards with NFC capabilities. These are the same size as traditional credit/debit cards and still feature the standard Chip & PIN/swipe payment facilities. NFC cards can also be custom made for specific companies and organizations.
- An NFC reader/receiver. This can be issued by a bank or other payments processing company if required.
Making a payment via NFC is simply a case of waving the card across the receiver. The transaction is efficient and easy, with no fiddling for cash or change. In the case of NFC credit/debit cards, the transaction will appear on the customer’s bill/statement as would any other transaction, so there may not be any need to issue a receipt.
Custom NFC cards may use a pre-pay/top-up facility where the card is loaded with a certain amount of money. The card is purchased with cash or credit card and “loaded” with a certain amount. When this initial credit runs out, the card can be topped up, again by using cash or a credit card. You might see such cards being used on public transport networks.
For security reasons, the maximum payment allowed via NFC is €15. This makes it ideal for small, everyday purchases such as cups of coffee, groceries and other similar items. Although still in its early stages, many Irish companies are now starting to roll out contactless payments across their stores. Centra began accepting NFC cards from late 2011, while Spar and Mace followed suit. AIB Merchant Services installed its first contactless payment system in the Bord Gais Energy Theatre in April 2012.
NFC and Mobile Wallets
NFC is also becoming an increasingly common feature in smartphones, enabling them to be used in place of the NFC card itself. Using a phone as a “Mobile Wallet” is usually a case of installing an app on the phone which links that phone to the customer’s credit card. When the phone is brought close to the NFC reader, this app then communicates the necessary details via the phone’s NFC chip.
NFC smartphone apps may be issued by the customer’s credit card company or bank. Other companies may also provide alternative apps. The Google Wallet app allows multiple card details to be stored on a phone so the customer can choose which to use. It is important to ensure that any apps used to store credit card details come from a reliable, reputable and trusted source.
The advantages of adopting NFC are plain to see. Quick, efficient and secure, it allows for rapid, stress-free transactions. It reduces the need to carry cash which in turn increases personal security for both customer and retailer. It is particularly ideal for retailers dealing with low value, fast moving goods and is also well suited for use in a hospitality environment where it might not be desirable to operate a till or handle money.