Thursday, May 19, 2022
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Near Field Communication: the future of digital payment

Synopsis: The pandemic has increased the use of Digital payments in the form of NFC, and Bluetooth payments. What will the future of digital payment look like?

Before the pandemic, very few business owners were thinking about setting up a contactless and digital payments mechanism for their customers. After the pandemic, when everything went virtual no one had a choice but to adapt to it. With this, Near Field Communication became popular. Here, you will get everything you need to know about this technology.

Meaning & Importance

Near Field Communication is a method of wireless data transfer between two devices. Devices like smartphones, laptops, tablets, etc can share data when they are in close proximity to each other. The distance is typically 2 inches apart. This is the same as Bluetooth but Near Field Communication technology uses less power and works only when the devices are close. Also, it does not need device discovery or manual sync like Bluetooth does. Near Field Communication technology facilitates contactless peer to peer payments via mobile wallets like Apple Pay, Android Pay, Samsung Pay as well as contactless cards.

To accept such payment types, you need a specialised card reader. The use of this technology has increased during the covid time because it plays a major role in Digital Payments. Your business can rely on it as it is contactless, encrypted, highly secure and can help speed up the customers’ checkout process.

The list does not stop here. These days, you can use it in three more different ways.

  • You can use your fitness trackers and watches to make Near Field Communication  payments.
  • If you are on a vacation, you can pay for meals or souvenirs with your wristbands.
  • Last but not least, if the contactless symbol is present on your physical cards, you no longer have to swipe it in order to complete your purchase.

Why should you adopt this technology?

1. NFC payment is easy and convenient

If you are someone who pays using cards or accepts payments using them, you will know something called the dipping process. It takes a little longer to process the payment. With this technology, you can say goodbye to the awkward time between you and the consumers while their payment is being processed. For transactions of small value, contactless payments can skip the swipe, sign, and PIN.. Contactless payments take lesser time than chip card transactions. The time per transaction is less, so it makes the whole process convenient and easy. Convenience in the process leads to happy customers. Thus it is very important in digital payments.

2. Stable, safe & secure

Mobile wallets are generally more secure than magnetic strip cards. While the phone might get stolen, the device is of no use to the thieves, if passcode or biometric protection has been activated.

When using a mobile wallet, the consumer’s data is entered only once, when card information is entered into the mobile wallet. This information then becomes encrypted. Now, every time the consumer taps the payment option on their mobile wallet at an Near Field Communication enabled terminal, the data is transferred to the payment device. It is immediately encrypted by the merchant’s payment processor. However, the system is secured as it is protected using encryption and the full card number is never revealed.

Data involved in the transaction is protected using two levels. These two levels make digital payments easier and secure.

  • The protection by the device
  • Encryption

3. Adopt the new normal

 After the pandemic, the new normal is using fast, secure and contactless payment methods. Also, the boom in the smartphone industry means that more people will use it for different purposes. One can use it for buying household products, or for ordering food and most importantly to make payments. For the end consumer, the faster and easier the process is, the more convenient it is. Commerce might not look the same 5 years from now. The covid-19 pandemic has only taken the time fast forward to a decade. This decade is about easing the mobile phone wallet induced payments.

It also benefits the merchants. Based on mobile wallet payments, they can drive customer loyalty programs, say by giving a coupon. This can be redeemed easily using the wallet. Also, the business gets useful analytics on their customers.

Meaning & Importance

Near Field Communication is a method of wireless data transfer between two devices. Devices like smartphones, laptops, tablets, etc can share data when they are in close proximity to each other. The distance is typically 2 inches apart. This is the same as bluetooth but Near Field Communication technology uses less power and works only when the devices are close. Also, it does not need device discovery or manual sync like Bluetooth does. Near Field Communication technology facilitates contactless peer to peer payments via mobile wallets like Apple Pay, Android Pay, Samsung Pay as well as contactless cards.

To accept such payment types, you need a specialised card reader. The use of this technology has increased during the covid time because it plays a major role in Digital Payments. Your business can rely on it as it is contactless, encrypted, highly secure and can help speed up the customers’ checkout process.

The list does not stop here. These days, you can use it in three more different ways.

  • You can use your fitness trackers and watches to make Near Field Communication  payments.
  • If you are on a vacation, you can pay for meals or souvenirs with your wristbands.
  • Last but not least, if the contactless symbol is present on your physical cards, you no longer have to swipe it in order to complete your purchase.

Why should you adopt this technology?

1. NFC payment is easy and convenient

If you are someone who pays using cards or accepts payments using them, you will know something called the dipping process. It takes a little longer to process the payment. With this technology, you can say goodbye to the awkward time between you and the consumers while their payment is being processed. For transactions of small value, contactless payments can skip the swipe, sign, and PIN.. Contactless payments take lesser time than chip card transactions. The time per transaction is less, so it makes the whole process convenient and easy. Convenience in the process leads to happy customers. Thus it is very important in digital payments.

2. Stable, safe & secure

Mobile wallets are generally more secure than magnetic strip cards. While the phone might get stolen, the device is of no use to the thieves, if passcode or biometric protection has been activated.

When using a mobile wallet, the consumer’s data is entered only once, when card information is entered into the mobile wallet. This information then becomes encrypted. Now, every time the consumer taps the payment option on their mobile wallet at an Near Field Communication enabled terminal, the data is transferred to the payment device. It is immediately encrypted by the merchant’s payment processor. However, the system is secured as it is protected using encryption and the full card number is never revealed.

Data involved in the transaction is protected using two levels. These two levels make digital payments easier and secure.

  • The protection by the device
  • Encryption

3. Adopt the new normal

 After the pandemic, the new normal is using fast, secure and contactless payment methods. Also, the boom in the smartphone industry means that more people will use it for different purposes. One can use it for buying household products, or for ordering food and most importantly to make payments. For the end consumer, the faster and easier the process is, the more convenient it is. Commerce might not look the same 5 years from now. The covid-19 pandemic has only taken the time fast forward to a decade. This decade is about easing the mobile phone wallet induced payments.

It also benefits the merchants. Based on mobile wallet payments, they can drive customer loyalty programs, say by giving a coupon. This can be redeemed easily using the wallet. Also, the business gets useful analytics on their customers.

Operational efficiency

This brings us to our next point. That is how such things lead to the operational efficiency of your business directly. Amazon is a successful company as they made things easier for the end consumers. This is also the reason why shopping malls and convenience stores are failing. The pandemic has made the environment remote. People from different countries can avail your services now. So, to make sure that a business is going the Amazon way, it is important to take care of the convenience of the end consumers. Near Field Communication  leads to operational efficiency of a business.

5. Versatile

It works with more than just one payment system. It covers a range of other services and sectors as well. Near Field Communication as a payment platform can be used for mobile banking, reserving seats at the restaurant, booking train or movie tickets, delivering real-time updates on expenditure and rewards points, redeeming rewards and coupons and much more. In short, it facilitates and makes Digital Payments easier. So, one technology can generate and empower so many other opportunities as well as make the lives of the users easier and faster. This makes the future an exciting place to look forward to.

Should you learn this technology?

After mentioning so much as to why you should adopt this technology, it becomes very clear that the answer to it is yes. You should learn this if you are any one of the following

1. A business owner looking to make the experience of consumers better

2. An engineer interested in the future of the FinTech industry

3. An entrepreneur looking to disrupt the FinTech industry

Know more about it here

Why should you enrol in the GFA course?

Global FinTech Academy aims to make the knowledge on theTechnology behind FinTech available to all. We offer a range of courses that make Technology easier for you. You can use this to strengthen your engineering career, disrupt the FinTech market that is full of potential, or for literally anything. The good news is you get to learn all this in an easy language and from ground zero. Our aim is to deliver the best knowledge for you in the easiest way possible.

This course is Business-Oriented. This means it is fully updated with the industry trends of all time that you need to know about.

Here, you will learn about

  • Contactless payments
  •  Near Field Communication
  • Host Card Emulation
  • RFID based Digital Payments
  • Difference between embedded Secure Element (eSE) and HCE
  • Bluetooth payment
  • Android Pay
  • Apple Pay
  • Samsung Pay
  • MST- Magnetic Secure Transmission
  • risk and mitigation
  • a light touch with technology and backend process.
  • FinTech Mobile Payment System
  • Payment Processing
  • Bluetooth Low Energy (BLE) based Payments
  • PayPal Video on beacon-based payment.

We are excited to simplify this most talked about contactless digital payment method in the FinTech and digital banking industry, Near Field Communication and HCE in this course.

Get it HERE

To get this course for USD10 only, apply code GFA10 at the checkout page.

Expecting to meet you on the other side of the course!

References

  1. https://www.fisglobal.com/en/insights/merchant-solutions-worldpay/article/nfc-payment-acceptance-for-smbs
  2. https://globalfintechacademy.wordpress.com/2020/09/13/course-on-near-field-communication-and-contactless-digital-payments-nfc-hce-mst/

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