What is NFC? Everything you need to know about Near Field Communication and Contactless Payments

Posted: July 31, 2019 | Updated: February 8, 2021

What is NFC (Near Field Communication)?

Near Field Communication, commonly referred to as NFC, is a form of wireless communication used to connect smartphones, tablets, and other mobile devices such as smart watches. In the payments industry it allows a user to wave their smartphone over a credit card machine to make a payment rather than swiping or inserting a credit or debit card. Payments made using NFC are commonly referred to as “contactless payments”. The symbol for NFC is shown below.NFC contactless payments symbol

How is NFC used to make a payment?

To use NFC to make a contactless payment you must A) have a smartphone that has NFC capabilities, which most smartphones do, and B) an electronic wallet such as Apple Pay or Google Pay. There are many electronic wallets on the market. 

To use the mobile wallet:

  1. Open your app and select the card or account you want to use.
  2. When it is time to pay, slowly wave your phone across the credit card machine. You should be within an inch.
  3. Your phone will vibrate and confirm the transaction. That’s it!

Some smart watches have NFC capabilities as well. To use your smartwatch instead, swipe your watch within range of the terminal for step #2.

NFC contactless payment smart watch

Which payment apps use NFC?

There are many electronic wallets that have NFC (contactless payment) functionality. The most popular are Apple Pay and Walmart Pay. That being said, new electronic wallets are constantly coming out. Other popular apps include Paypal, Samsung Pay, and Visa PayWave. Most major banks have or are creating their own contactless payment apps, many of which they are integrating into their standard banking apps. and even T-mobile has an NFC enabled mobile wallet now. 

Does it cost more to use NFC to pay?

No, there are no additional charges to the card holder OR the merchant (business). I know what you’re thinking- Then how is it profitable to the mobile app companies to provide contactless payment apps? The NFC enabled electronic wallet companies make money by receiving  a cut of the profits directly from the major card brands. This model prevents either the card holder or the merchant (business) from incurring additional fees.Contactless Payment Processing Terminal

Are NFC Payments Secure?

Yes, NFC payments are just as secure and safe as using a credit card. Depending on the security you use on your phone they can be even safer such as requiring a thumbprint to unlock. So, if you are comfortable with using a credit or debit card for a particular transaction, then you should feel just as secure using NFC.

Where can I use NFC to make payments?

NFC enabled credit card machines, while common, are not “everywhere” yet. Every day more and more businesses upgrade their systems and soon It will be a major form of payment in the United States. Internationally there are many places, such as Australia and Europe, that NFC is much further along in the adoption process and much more common. When traveling in Italy, for instance, NFC payments are so prevalent that you could practically leave the debit and credit card at home (don’t do that, of course. I say that to communicate the true extent to which it is being used over there.)NFC payments (near field communication)

It’s all about NFC payments

In conclusion, NFC is a form of wireless communication that is used to make payments from your smart devices by waving them over the credit card machine instead of swiping a card. Common apps that support NFC payments are Apple Pay and Google Pay. NFC payments are simple and secure to use, and while it’s not quite as popular in the United States as it is in other places, it’s becoming more mainstream every day. So, go ahead and check it out you have nothing to lose except.. well… your regular wallet because you won’t have a need for it anymore.

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