NFC Technology – An Easy Guide to Contactless Payments

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By now most of us are comfortable with contactless payments, but few people know about the technology that lets us make them. Despite being something of an unsung hero, NFC has been making it easier for us all to pay in shops, restaurants, and many other places since as far back as 2007. 

Whilst consumers might be happy simply to use the technology, it could scarcely be more important for businesses to move with the times and understand how and why accepting contactless payments could benefit their bottom line.

In this guide, we take a look at the NFC technology that makes contactless card machines tick, and give an overview of how you could reap the rewards of accepting agile payments. 


What are NFC payments?

Near field communication (NFC) is the technology that sits behind contactless payments, making it possible for us to simply tap and go when completing a transaction. NFC has been around for a long time now, and banks first began adding the technology to their debit and credit cards in 2007. Whilst chip and PIN became the go-to card payment method, NFC took a little longer to come into the spotlight but in 2017 it made a huge jump with its use increasing by 97%, representing some 5.6 billion processed transactions.  

You might expect NFC to rely on complex scientific concepts, but ultimately, it’s much simpler than that. The NFC chip in your payment card or mobile device works as one part of a wireless link. When held close to the corresponding chip contained within a contactless-enabled card machine, data can be exchanged between the two – including card details and information about the transaction.


What are the benefits of accepting contactless payments? 

For such a simple idea, NFC can bring a lot of benefits to the retail environment. With debit and credit cards having overtaken cash as the UK’s most popular payment method in 2017, it makes sense for businesses to continue upgrading their infrastructure and making it easier to complete sales.

For one thing, accepting a wider range of payment methods makes it more practical for customers to shop with your business. As NFC payments don’t require any PIN input, they can cut down the time spent at the till as customers can simply tap to pay – whether with their credit card, debit card, or mobile device. The same applies to refunds, making it quicker and easier than ever to process transactions of all kinds. By engaging with customers and making their shopping experience as convenient as possible, your business could increase satisfaction levels and inspire brand loyalty. 

Outside of making life easier for customers, NFC has a number of other major benefits too:

Mobile Payments

NFC not only facilitates faster contactless payments with debit and credit cards, but also makes it possible for your customers to pay you simply by tapping their mobile device on your contactless card machine. 

This means that you can still get paid even if your customers don’t have their credit or debit card to hand. All they’ll need is a mobile payment enabled smartphone, with the payment working in the same way as a card albeit requiring them to use their touch ID or facial recognition to confirm the transaction. 

Contactless Payment Security

Owing to the advanced encryption that is built into NFC technology, contactless payments are just as secure as those made with chip and PIN. A transaction limit of £45 (as of 1 April 2020) means that even if somebody takes your card they can only make limited purchases. 

This limit might seem to curtail the benefits of NFC payments, but the good news is that customers using their mobile devices can make payments without worrying about the amount involved. Due to the added security of fingerprint and facial recognition, contactless mobile payments are as secure as they are convenient. With the same banking fraud protections as other transactions, customers and vendors can rest assured that contactless payments are safe. 

Lower cost transactions

Whilst the figures aren’t huge, NFC transactions work out slightly cheaper than Chip & Pin processing fees. This means that, over time, you could be saving money simply by making it easier for your customers to pay you. 


How to accept contactless payments

With so many benefits, it makes sense that businesses might be keen to implement their own NFC contactless payment solution. Fortunately, doing so is probably easier than you would think – so long as you choose the right merchant services provider.

One company offering a comprehensive selection of payment solutions is UTP Group. With a full range of NFC-enabled countertop card payment machines, mobile card readers and portable contactless card machines, you could find a payment solution that suits your business model.

In the spirit of more convenient transactions, UTP group also offers an innovative same day funding service that could see you receiving money from into your account in just hours – not days.


Bringing sales up to speed

With the coronavirus pandemic bringing social distancing into our lives for the foreseeable future, making life easier for customers is chief among the concerns of many business owners. With the already well established NFC technology making it possible for retailers to accept COVID-secure contactless payments, coping with change is simple.

Whilst COVID-19 forces the hands of some businesses, it could also be used as an opportunity to bring your payment solutions up to speed. With luxury jewellery brands adding NFC technology to their bracelets and more news everyday of how contactless payments are helping businesses to move past the pandemic, now could be the opportune time to invest and upgrade.

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