Cash payments are gradually ceasing to be the main way to pay for goods and services. They are being replaced by non-cash transactions.
If earlier, to complete a transaction, it was necessary to swipe the card through the terminal, and then enter a PIN code, now contactless payments are increasingly common. In the case of NFC technology, it is enough for the buyer to bring the phone, watch or fitness bracelet to the terminal to confirm the payment.
What is NFC?
Modern smartphones are highly functional devices. They allow you to make voice calls or send and receive SMS messages, and also allow you to use the browser, camera and various applications.
Thanks to the NFC function, a smartphone can successfully replace a payment card. This technology, which uses a radio signal, enables communication between devices located at a short distance (within 20 centimeters from each other).
The NFC option is present not only in smartphones, but also in many other devices. For example, fitness bracelets and smart watches with NFC allow you to pay in stores without a phone. It is convenient for physically active people. During training or outdoor recreation, you can go shopping. NFC payments are also made using programmable stickers.
How do I enable NFC?
The NFC module is installed in many smartphones. For example, Apple has been using this technology since the release of the iPhone 6. The feature is also available on mobile devices running the Android operating system. The technology is actively used in the current lines of smartphones from Xiaomi and Samsung.
Enabling NFC in most phone models is not particularly difficult. If the equipment supports the technology, it is enough to open the application to activate it. After starting the program is ready to use.
What are NFC payments?
NFC technology allows you to transfer a small amount of data. A smartphone with NFC and a payment terminal do not need to be paired with each other. Contactless payment is made automatically in seconds. You can pay without using a card on a physical medium, because NFC works with banking applications. The payment is made when a smartphone or other equipment with NFC enters the coverage area of the terminal.
- Free access and no additional fees.
- Transaction security. Security through the Secure Element module.
- Ability to use NFC tags.
- Low power.
- Perform payments in real time.
- Perform financial transactions without an internet connection.
- Payment only when bringing the device to the terminal.
- Perform operations without pairing the phone with the terminal.
- There is no need to carry a card or wallet.
The disadvantages of NFC payments are mainly related to the search for merchants that support this technology. Not all stores are equipped with NFC terminals. In addition, the system only works at a distance of up to 20 centimeters. For some users this is a disadvantage, for others it is an advantage.
The decision to activate or deactivate the NFC function is up to the owner of the smartphone. This technology is not a mandatory standard for payments. It can be used simultaneously with cash and card payments.
How does NFC work?
The device with the NFC function uses magnetic induction in its work. Communication can be established between the payment terminal and any equipment that supports the technology. The NFC module will allow you to connect a smartphone, computer, smart watch or other gadget. The contactless payment app can run in the background. NFC technology has a short range and high frequency. Establishing communication between devices is possible thanks to the radio frequencies of the ISM band.
Radio standard parameters for NFC payments:
- 2 GHz band.
- Frequency 13.56 MHz.
- Bandwidth 106, 212, 424, 848 kbps
Payment is made when an NFC-enabled smartphone and a payment terminal use the same bands. In this case, the devices can establish direct contact with each other without the need for wires and other connectors.
To find out if your smartphone has NFC, you need to go to the settings. This feature can also be found in smart watches, fitness bracelets and tablets. If the equipment supports the technology, among the settings there will be an option to turn NFC on and off.
Do contactless payments work without NFC?
Not all smartphones, watches and bracelets support NFC. However, contactless payments are available without this technology. To do this, on Android version 5.0 and above, you need to install the Google Pay application, and then add a card. iPhone requires the Apple Pay app.
After entering the payment details, you should wait for an SMS with a verification code. It must be entered in Apple Pay or Google Pay. The data will have to be confirmed in the banking application. After adding payment details with your phone, you will be able to pay in stores that support payment via Apple Pay and Google Pay. In the application, you can set additional settings and switch between maps.
Do I need internet for NFC payments?
Paying with NFC does not require an internet or local network connection.
No additional data needs to be transferred to complete the transaction. The corresponding payment amount will be debited in exactly the same way as if the customer had paid with a regular contactless card.
How to pay with NFC?
Contactless payments are completely safe and accessible to a wide audience. However, not all devices support NFC technology, so you should first examine the hardware configuration. Before proceeding with the payment, you need to check if the NFC payment option is available on your phone. Then you need to install the bank application and log in. Your account must have at least one debit or credit card.
To make NFC payments, you need:
- Enable NFC.
- Launch and configure the application.
- Punch through the goods at the checkout.
- Unlock phone.
- Bring the phone to the payment terminal.
For the NFC module to work, the devices must be at a distance of 5 to 20 centimeters. The amount will be debited automatically. In the case of large payments, you will have to enter a PIN code on your smartphone. Banks allow you to make contactless transactions within the funds available on your balance. There is no difference between debit and credit card payments. The contactless payment function also does not imply additional fees.
In the bank application, you can set up payment by phone by selecting the card with which it will be made. To use the payment service, you do not need to separately confirm each transaction. Bringing the mobile device closer to the reader of the terminal, the payer gives verbal consent to the execution of the intended transaction. The cardholder can set up NFC payments in their personal account. For example, set limits. Limiting payments will help you avoid unexpected expenses.
Are NFC payments secure?
You don’t need a PIN to pay with NFC. The payer does not need to have a card with him in order to make purchases using a phone, watch or bracelet. However, the automation of payments raises concerns. As a result, there are reasonable doubts about the security of NFC.
Payment using NFC occurs after placing the device at a distance of 5-20 centimeters from the payment terminal. The transaction will be processed instantly. Thus, there is no risk of interception of payments by third parties.
There must be no obstacles for data transfer between the phone and the terminal. To make an NFC payment, the equipment does not need to be handed over to strangers, such as a cashier or a merchant. Unauthorized connection to the phone via NFC is almost impossible, as the technical conditions for this are limited.