NFC Payments

Near field communication allows a person to make purchases without having their credit card with them. NFC has three main uses:

  1. Card emulation: This means the phone can store credit card information and act as a credit card would and pay for purchases.
  2. P2P mode: This is when two devices are able to communicate with each other using NFC. Data exchange can occur between the two devices when they are within close range.
  3. Reader mode: The device can read an RFID (radio frequency identification) tag but does not transfer information to the inactive tag.

I’m going to talk about the card emulation NFC use. If a person has a phone with NFC, they only need a phone that has their credit card information stored to pay for something. NFC payment usually only takes place in stores or in transportation areas, like in a subway. All you need to do to pay with NFC is wave your phone near a reader. Most of these transactions do not require additional authentication. Sometimes a PIN number is required if paying with an ATM card.

There are a lot of challenges to integrating widespread NFC payment methods. For one, people must have a phone with an NFC chip to use this technology. Luckily, the NFC Forum is working to make the spread of NFC technology and adaption of this technology possible. This technology will help phone manufacturers since it gives the consumer a good reason to want to purchase a phone containing an NFC chip.

Some NFC vendors in Europe currently use phone with NFC chips to pay for on and off street parking in certain areas. This technology has allowed people to be able to pay for their parking without having to leave their car, and also saved money on parking infrastructures that would have been necessary without this NFC payment technology. Since so many mobile devices do not yet contain NFC chips, some vendors use a combination of NFC and a barcode displayed on the mobile device to make a mobile payment.