Over the past ten years, there has been a significant shift in the way that consumers shop, and retailers need to adapt to meet these changing needs. One such need is the desire for quick, safe, and easy payment options.
Fortunately, improvements in the checkout experience are made possible by advancements in payment technology, such as near-field communication (NFC) payments. We’ll go into great detail about NFC mobile payments in this post, including what they are, how they operate, and how to use them in your company.
NFC Mobile Payments: What Are They?
NFC payments take place when a customer’s encrypted payment information is sent to the retailer via a mobile wallet or a credit or debit card that has been enabled and communicates with a payment terminal.
Because mobile wallets are more widely used than ever, NFC mobile payments are also more typical. Retailers whose point-of-sale devices support tap-to-pay with cards and mobile payments can allow customers who desire an extra degree of convenience and security to use their mobile devices with Apple Pay and Google Pay.
As older cards expire, more and more tap-to-pay cards are being issued; banks automatically enable this feature on replacement cards. Cards that have this feature have an icon that looks like a WiFi icon that is pointing sideways.
How Do Mobile NFC Payments Operate?
To transfer payment information, near-field communication technology brings two NFC-enabled devices together nearby, typically within a few inches at most. Two-way encryption, which makes NFC mobile payments more secure than swiping or inserting a credit or debit card, is a significant differentiator.
When the card information is transmitted to the payment terminal, it is encrypted and needs permission from the mobile device via a passcode, fingerprint, or face ID. After validation, the transaction data is sent to the NFC terminal along with a one-time use code that is generated at random and sent to the merchant in place of the customer’s debit card.
Card information is not sent in a way that hackers can exploit, and the one-time code that transmits encrypted payment information is useless to hackers because it can never be used again. NFC payments are difficult to hack because they require very close proximity to the terminal and biometric or multi-factor authentication to complete the transaction.
Handling Mobile Payment Safety Concerns
Some customers are still reluctant to use mobile wallet payments or their cards’ tap-to-pay feature, even despite NFC’s aforementioned security features. Nonetheless, there is a growing sense of confidence in NFC payments, particularly among younger generations: 65% of individuals in the 18–24 age group and 55% of those in the 25–44 age group say they are very or somewhat likely to use tap-to-pay.
Investigating consumer reluctance to accept NFC payments further offers a chance to allay worries and provide customers with information. Customers frequently cite concerns about payment security and payment processing as reasons for their delayed adoption. Thankfully, traditional card payments are accepted by NFC-enabled payment devices, so users can select the option that best suits their needs.
Additional Arguments in Favor of Contactless Payments
Keeping customers socially apart and following hygienic procedures while they shop are only two aspects of ensuring a safe shopping environment. The payment terminals at the point of sale receive a lot of traffic in any retail setting. Although retailers would prefer to sanitize between customers, this is frequently not practical in reality. NFC payments offer a safer option with less contact, but they do require some physical interaction with the terminals.
Customers find contactless payments to be very convenient as well, and having this option allows them to pay when and how they choose. Tap-to-pay is another feature that is integrated into a lot of the newest credit and debit cards. Because contactless credit and debit card payments are made using the same technology as mobile payments, this is advantageous to merchants.
In the past few years, contactless payments have seen a sharp increase in popularity. 3% of cards in use in the US in 2018 were equipped for contactless payment, indicating that the country was relatively slow to adopt NFC payments. Even before the pandemic, contactless payment usage increased by 150% since March 2019, which resulted in a significant shift in consumer purchasing habits and an additional rise in contactless payments.
Customer service and how businesses accept payments are closely related. Respecting every form of payment encourages customer loyalty and provides a seamless, convenient shopping experience from beginning to end. Maintaining a current point-of-sale system also gives clients the impression that the company values security and speed.
How Can NFC Mobile Payments Be Implemented by Merchants?
The right tools are needed by merchants to accept NFC mobile payments. Chip readers, card swipers, monitors, and credit card machines with integrated NFC technology are examples of NFC mobile and other contactless payment terminals. Selecting the right contactless payment terminal for your company is the first step towards implementing them.
There are many cutting-edge point-of-sale (POS) technologies available; the right POS system and payment terminal will depend on your company’s size, target market, and other particular requirements. A restaurant, for instance, will require a different point-of-sale system than a tiny clothes store. It’s crucial to go over these requirements with your payment processing provider to choose the right setup and equipment.
With NFC Mobile Payments, It’s Time to Go Contactless
With customers realizing how quick, easy, and secure NFC payments are, contactless payment usage is expected to grow. There are still many risks associated with interacting in large public spaces, so it is imperative to take multiple precautions to ensure the safety of patrons. The pandemic is far from over. Along with the security advantages, retailers can highlight the hygienic advantages of not having to physically interact with a payment terminal when marketing this feature in-store.
To ensure the safety of both their workers and clients, businesses have had to modify the way they operate. Businesses need to keep up with technological advancements to remain relevant and up to date. A payment processing system that is outdated poses a security risk as well as a nuisance to customers. One policy that has numerous advantages for any organization and its members is the availability of contactless payment options.