What is an NFC payment?

Whether someone pays with a smartphone app or a tap-to-pay card, NFC is the technology that helps make their payment possible.

This article will delve into what exactly NFC payments are, how they work, and how to use them.

What is NFC?

First, what does NFC stand for? NFC is the abbreviation for “near-field communication”. It's a term for the technology that allows two devices — like a smartphone and a mobile payments reader — to communicate over a short distance.

While NFC has other applications, it's commonly used to enable contactless payments.

What are NFC mobile payments and what are they used for?

An NFC mobile payment is a contactless transaction that someone can make with their mobile device, like a smartphone or tablet. Instead of handing out cash or swiping a physical payment card, people can use NFC payment apps or mobile wallets to make purchases. In fact, many smartphones have specific NFC payment options or apps built in.

NFC mobile payments can be used with tap-to-pay terminals, which can be found in many retail stores, coffee shops, restaurants, and more.

How does NFC work?

NFC is considered a form of radio-frequency identification (RFID) technology, which uses electromagnetic fields to identify nearby objects and transmit data. NFC, however, generally only works with devices that are within four inches apart, which make it ideal for contactless payments.

For NFC payments to work, someone has to hold their mobile device or tap-to-pay card close to an NFC-enabled reader. The reader then uses NFC technology to search for and identify that payment device. Once it finds the device, the shopper's information can be securely transmitted to the reader, and the purchase is made.

How to pay with NFC

The two ways people can pay with NFC are:

  • Tap-to-pay cards. Many credit and debit cards are NFC-enabled, so they can be used to make purchases with tap to pay. A shopper would just have to tap or hover their card over the payment terminal.
  • Mobile devices. Many smartphones, tablets, and smartwatches can be used to make contactless mobile payments via NFC technology. There may also be a range of mobile wallets and NFC payment apps to choose from.

How to use NFC payments on a phone

Phones generally need to be enabled with NFC technology to make contactless payments. To check if a mobile device has this capability, someone could go to the general settings app and check for the option to turn on NFC and contactless payments under categories like "connected devices" and "connection settings".

Once someone enables NFC payments on their device, they can use their mobile wallet and payment app to make contactless NFC purchases.

Are NFC payments safe?

NFC payments are generally considered secure. All information sent via NFC-enabled devices is encrypted, so it typically can't be read by any third-party interceptors or hackers. This is done through a process called tokenization.

Here's how it generally works: When someone goes to make a payment with their device, their information is represented as a random alphanumeric code and transmitted via NFC. That code is also uniquely generated for each transaction, so it's usually never the same.

Though someone could steal an NFC-enabled phone, they would likely need to know the owner's password and/or biometric data to use it.

Learn about using a digital wallet with PayPal.

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