What is NFC ?
NFC stands for Near Field Communication. NFC enables contactless payments. A contactless payment is when a card or a smart phone containing Apple Pay, or a similar software, Google Pay or Samsung Pay, hovers over the NFC enabled terminal. NFC or contactless payments can be displayed as accepted on a terminal, many times by single or multiple green lights. The terminal can take the card information without having to insert the card into the terminal.
How does Apple Pay work?
First, an individual will set up their wallet by taking a photo of the card they want on file. Next, Apple sends that information to your bank. Your bank will then replace your bank information with a series of randomly generated numbers, called a token. The token is sent back to Apple and used when an individual chooses to pay with Apple Pay. This is a secure transaction since the bank details cannot be duplicated, and Apple Pay is protected with Touch ID or facial recognition software.
The transaction does not expose the actual credit card number. Another common question, what if someone steals my phone. The credit card number is not stored in the iPhone or apple device. The token is part of the security for NFC payments. Unless they have your fingerprint or face, it would be hard to run an NFC transaction if your phone was stolen. And, since the credit card number isn’t in your phone in the mobile wallet; theft of credit card numbers inside of wallets is minimal, if not non-existent.
Why is Apple Pay important?
Apple Pay is on the rise, quite literally. The usage of Apple Pay increased from 36% to 43% in just five months. Apple even reported that they processed “more than 1.8 billion Apple Pay transactions in its fiscal 2019 first quarter”. NFC payments are on the rise, so the necessity of NFC enabled terminals should be too. Can NFC payments occur with wearables? Wearables, such as apple watches and galaxy watches, also promote the use of NFC payments. NFC payments on smartwatches or wearables are happening now.
Credit card companies are catching onto the trend, too. Companies like American Express, Capital One, Citi, and Visa all offer contactless payment cards. A study done by A.T. Kearney, a global management consulting firm reported “About 48% percent of Visa transactions take place at contact-less-enabled merchants”. The transition to contactless payment cards has already begun.
Banks also see the value in contactless payment cards. The same study as mentioned before, predicted that by early 2020, all top 10 banks will have launched contactless card programs, including converting their active cards into contactless”. They predict this transition to take place between 2019 and 2020.
With a simple and quick way to replace cash, banks are loving the idea of contactless payment cards. Once the customer catches on and recognizes the benefits of a quick tap on the terminal instead of chip or swipe, the way we pay will be revolutionized.
Security is always a top priority when it comes to new payment technologies. Apple pay seems to be secure with the use of tokenization. Are you aware paying with your apple watch or NFC enabled card is much more convenient and faster than a chip transaction? NFC payments are secure and fast. Here’s a link to a newer smart-terminal, where NFC payments are standard.
Catch up with the times and go mobile with your payments!
Call us @ 877-651-1655 to get NFC payments for your business.