NFC, in a payments context, is commonly understood as “Tap and Pay” or simply “Tap,” but NFC actually stands for near field communication and refers to the technology employed to complete these types of transactions. This form of payment is increasing in popularity as more issuing banks provide NFC enabled cards to their customers.
Essentially, NFC allows two devices to engage in proximity-based communications and data transfer and is a technology that is used in many different areas of day to day life including product scanners, key fobs, file sharing, and children’s toys. When it comes to the payment industry, NFC technology is helping to facilitate faster contactless payments because the payments do not usually require the customer to provide a signature or to enter their pin. When a customer has an NFC enabled credit, debit card, or device like a smartphone or smartwatch, they are able to pay for their purchases by simply holding the payment card close to the terminal.
While the payment cards or devices only need to be held within an inch and a half of the terminal for the transaction to occur, many people refer to NFC payments as “Tap and Pay,” “Tap and Go,” or simply “Tap,” because of the tapping motion the user often makes over the terminal’s surface to complete the transaction.
Although customers typically do not have to enter their pin or provide a signature, NFC transactions are generally considered more secure because they use the same security infrastructure that EMV employs. This infrastructure includes several different security measures to protect both the cardholder and your business from fraud. These transactions are also often limited to a $100 purchase limit to protect the cardholder from unauthorized spending if their card is lost or stolen.
As issuing banks continue to issue more NFC enabled cards to their customers, if your business has an NFC enabled terminal then you will be able to meet the payment expectations of these customers while completing transactions faster than you are able to with traditional chip and pin cards.