It seems like everyone is talking about the new buzzwords in the payment industry. Contactless payments, NFC, EMV, Apple Pay, and mobile payments. So how do you keep all of these straight? What do they all mean, and how do they relate to each other? Let’s take a look at contactless payments and NFC, or near field communication.

1. What is NFC (Near Field Communication)?

NFC refers to the technology that allows two smart devices to exchange information through radio waves when they are within close proximity or touching (usually less than 4 inches away). In order for NFC to work, it requires two NFC-enabled devices. (Think about it: you can’t communicate by yourself!)

2. What Applications Does NFC Have?

NFC is used for a lot of different things. One of the most common is contactless payments, but it is also used in security/controlling access, identifying products or locations, marketing and advertising, and more. When you see someone wave a bus pass in front of a reader to pay their fare, that’s probably a contactless payment using NFC.

3. What is the NFC User Experience?

The user experience is one of the most attractive things about NFC. It can’t be any simpler. The user simply hovers their device or taps it on or near a reader and it automatically works.

4. Why Accept Contactless Payments?

“With all this convenience comes an increase in sales…20-30% more than purchases made with cash, Chase said.”

Why would customers choose to use contactless payments over a traditional swipe card or cold hard cash? Recent research has pointed to two main reasons: Convenience and speed. Hovering a card, often times without needing to sign or use a PIN, is much faster than fumbling with cash. Why should you care about NFC as a merchant? Studies have shown that not only do transactions happen faster, but sales volumes go up as well.

Chase bank reported a reduction of time at the point of sale: a 30-40% reduction, in fact. Amex had even more robust findings: Contactless transactions were found to be 63% faster than cash, and 53% faster than a magstripe credit card. As mentioned before, with all this convenience comes an increase in sales…20-30% more than purchased made with cash, Chase said. What business owner wouldn’t take a 20-30% increase in sales?


5. How Do I Accept Contactless Payments?

Accepting contactless or NFC payments is as easy as upgrading your POS or credit card terminal. The terminal itself should be called out as “NFC-ready” or “Contactless” when you buy or lease it. Most current terminals do have the technology built in, but it’s a good idea to check with your payment processing company to make sure that you get the right one.

6. Where can I find out more about NFC? What are some resources?

For those really looking to dive into NFC information, here are some additional resources:

Chase’s Contactless Payments Article

Smart Card Alliance’s “The What, Who, and Why of Contactless Payments”

Contactless Payment Glossary

First Data’s Whitepaper on Contactless Payments


If you have more questions about NFC and Contactless Payments, feel free to reach out! We are available at 888-902-6227 or at info@getvms.com



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