Since the pandemic, the popularity of NFC payments has risen. When you accept NFC payments, it allows businesses and customers to make agile, easy, and seamless contactless transactions.
NFC payments, which fall under contactless payment solutions, use NFC (Near-Field Communication technology), where NFC-enabled payment cards, devices, and mobile wallets can make quick transactions with a single touch.
In this article, you will see whether NFC payments are secure, how to accept these payments, and the pros and cons of making NFC transactions for your business.
Are NFC mobile payments secure?
NFC payments use wireless or short-range communication technology, which may put customers in doubt about the security of their sensitive information. Nonetheless, such payment types are way safer compared to magnetic stripe cards and comprise the security of EMV-enabled chip cards.
Also, with the help of dynamic encryption, NFC payments are completed when customers get a random one-time code, which comprises a string of numbers and letters that indicate to the merchant payment provider how they can transfer the purchase amount from the customer's account to their account.
Since every time there's a different code while making a purchase, it's almost an impossible task to decode. Thus, it makes it worthless for hackers to use it for future purchases, even if it was somehow decoded.
NFC mobile payments comprise an additional security layer as customers can only access it with a unique password and login, including biometric authentication, such as Face ID, passcode, fingerprint, etc. It implies if a user loses his/her phone, a thief or an unauthorized person cannot access NFC data.
How To Accept NFC Payments
For accepting NFC payment cards and mobile payments, it's important that your business can accept customer payments with the support of contactless transactions, as it doesn't require card swipes or cash to make payments.
For accepting NFC contactless payments, your business should keep the mentioned things in mind:
- Select the right payment processor or merchant payment provider
- Find an appropriate NFC-enabled POS.
- You should install a payment terminal in your business or store premises.
- An internet connection to your POS is a must.
- You can set up a merchant payment account and start accepting the payments.
Users making payments with NFC-enabled mobile devices should bring their phones closer to the POS. The shopping amount will then be debited from their account and directly credited to the merchant's account.
Advantages of NFC technology in payments
Making NFC payments offers plenty of benefits to your business and customers. So here are a few advantages of NFC technology in payments:
User-Friendly Transactions
You can find convenience while making NFC payments. With a simple tap, you can complete the transaction. Users don't have to carry cards, and businesses don't need to worry about counting changes or giving changes to customers. Whether users wish to book a flight or do shopping, NFC makes their payment process effortlessly easier.
NFC payments help you enjoy a digital lifestyle where carrying cash or cards in your wallet isn't a necessity.
Advanced Customer Experience
Making NFC payments helps your business achieve customer trust, loyalty, and immense satisfaction. These payment solutions seamlessly integrate with mobile applications and reward programs with a single tap.
NFC technology, other than speeding up the checkout process, also helps in offering quicker discounts or membership programs as they can speedily sync with NFC payment functionality.
There are mobile wallet solutions that offer customers cashback, discounts, and reward points even if they don't have a recognized mobile app but using this service gives users a plus point while making NFC payments.
Cost-Effective & Efficiency
NFC helps cost-cutting and saving big for your business with lower processing fees. Also, when you adopt NFC payments, it helps your business by freeing up time that you can invest in other essential tasks.
It even helps in managing your cash department as the technology helps your business efficiently track inventories and sales. This, in turn, results in increasing your overall productivity.
Advanced Security
NFC payments encompass robust and effective security measures that prevent your data from fraud. The majority of NFC transactions require your face ID, fingerprint, voice recognition, or passcode, which adds another security layer.
It is possible that hackers can “listen in” on NFC transactions, but close-range or short-range communication makes it almost impossible for hackers or scammers to intercept data.
For an additional layer of security, two devices need to be closed, and NFC payments are encrypted to transfer money. A transaction is completed only when authorized devices decode payment information.
Environmental Benefits
NFC payments are an eco-friendly payment system that has decreased the dependency on paper receipts and fostered digital sustainability.
Wide Acceptance and Dynamic Role
Today, NFC payment techniques are gaining immense popularity worldwide as several POS or payment terminals support NFC. This payment system is compatible with several payment devices, right from mobile wallets to cards.
Also, the integration of NFC technology into access control systems and public transportation has made life easier for people out there.
Disadvantages
NFC payments don't allow money to be stolen, as they require specific permission from users to transfer money or complete transactions.
However, no technology is entirely free from risk. Thus, there are a few security issues or disadvantages with NFC payments, and they are:
Theft Case
If a user's phone is stolen, the thief can use it for making purchases by installing a mobile wallet app but that requires 2 multi factor authentication processes to complete a transaction.
Therefore, it's a must for users to install face IDs, passwords, fingerprint scans, or more so that no unauthorized person can access a device.
Chances of Hacking Still Exist
It's hard to accept, but NFC-enabled devices can still be hacked or stolen. Some NFC transactions are set below a specific threshold, where customers don't need to enter a PIN or perform any biometric authentication. Thus, thieves can steal a card and make illicit purchases.
Also, scammers can intercept customer data and information by accessing their mobile devices or POS terminals. You can reduce this risk by regularly updating hardware and software and maintaining compliance with PCI DSS security standards.
Cost
Your business requires an upfront cost for accepting NFC payments when you require multiple terminals or card readers.
Though a few merchant account providers offer free card readers, you usually need to pay to upgrade the device to accept NFC payments.
Conclusion
If you want your business to reap maximum profit and stand out from your competitors, then NFC payments are the best digital payment method for attracting more customers and, hence, sales!
There's no reason not to love NFC payments. They're fast, versatile, convenient, have advanced security, and the process of accepting and making NFC payments is user-friendly. This digital mode of payment supports multiple devices, and you can easily implement this payment system in your business.
