Since the first credit card was introduced more than half a century ago, plastic payments have been a contact sport. First there was the flatbed imprinter, a manual device that required some muscle power to produce carbon copy sales receipts. Countertop terminals followed, and customers learned how to swipe their cards so a reader could capture data electronically. Now, with the development of near field communication (NFC) technology, POS transactions are going contactless.
Many consumers are familiar with NFC short-range wireless technology because they’re already using it for a number of applications in their everyday life. For example, it’s the basis of public transportation fare cards and synching smartphones to cars for hands-free calling.
Increasingly, NFC is being used for mobile contactless payments in stores and vending machines as well. Digital wallets like Android PayTM, Apple Pay® and Samsung PayTM are based on the technology, which is also compatible with coupon and special offer redemptions from merchants that are designed to attract shoppers and boost sales.
The digital wallet owner stores credit card account data and a variety of other information in their device, including personal ID, driver’s license, health insurance card and loyalty cards. NFC-enabled mobile devices (including smartphones, tablets and smartwatches) communicate with the receiver in an NFC-equipped terminal to exchange data electronically and complete a transaction. NFC at the POS is so simple the process has been dubbed “tap-and-go”:
- 1. The customer activates their mobile device.
- 2. The customer holds the device within inches of the NFC logo on the terminal to connect.
- 3. The customer follows instructions on the terminal screen to complete the transaction.
The customer may be required to provide a passcode or biometric (fingertip scan) to approve the transaction. Once validated, the transaction is authorized by the processor, charged to the shopper’s designated credit card and a sales receipt is issued, just like any other payment card transaction.
From both a merchant’s and customer’s perspective, NFC transactions are quick and convenient — and they’re more secure than transactions involving magnetic stripe payment cards, which can be cloned and used for unauthorized purchases by thieves. The process is protected by the Secure Element that is embedded in both the terminal and the customer’s mobile device. Its function is to help protect the transaction from software and hardware attacks.
As retailers upgrade their terminals to become EMV® compliant, they would do well to consider a model that also offers NFC capability since digital wallets are expected to become more popular with consumers. When you’re ready to add contactless commerce to your business, a TransFirst® representative can provide you with an NFC/EMV-enabled terminal option to meet your unique business and processing requirements.
Trademarks are the property of the respective owners and are not necessarily affiliated with TransFirst. Apple Pay is a registered trademark of Apple, Inc. Samsung Pay is a trademark of Samsung Electronics Co., Ltd. Android Pay is a trademark of Google Inc. EMV is a registered trademark or trademark of EMVCO LLC in the United States and other countries. www.emvco.com