From email to personal banking to health apps, we’re increasingly using our mobile devices to manage our lives, so it’s no surprise that we’re buying our coffee with them too. We love the speed and convenience of NFC contactless cards, and they’re a way of life here in Canada—just tap and get on with your day. To help you accept contactless cards and mobile payments at your business, here’s a guide to NFC.
What is NFC?
Near Field Communication (NFC) is the technology that allows two NFC devices—like your card and a payments terminal—to talk to each other when they’re at a close distance.
How NFC Works
NFC is a subset of a radio-frequency identification (RFID), a technology that allows us to identify things through radio waves. Introduced in the early 2000s, NFC operates using a particular RFID frequency for effective short-range communication. Some common uses for NFC are identification cards to gain access to places like office buildings and transit cards for use on buses and subways.
In retail, NFC is being used more and more to power the seamless communication between smartphones or contactless cards and NFC-enabled point of sale (POS) systems, thereby allowing for contactless payments. A contactless payment is a transaction that requires no physical contact between a device and a payments terminal. Customers can just hold their mobile devices or contactless cards near the terminal to pay.
Examples of NFC payments
The most prevalent example is the INTERAC Flash® debit card that you use in your day-to-day life. The buzziest NFC mobile payment types are Apple Pay and Android Pay.
Is NFC secure?
The idea of paying through a mobile device can make people uneasy, but NFC payments are dynamically encrypted, meaning they’re constantly changing. This makes them one of the most secure ways to pay. Plus, cardholders are protected from fraud for NFC transactions up to $100 with all major card brands. Another benefit is that NFC payments don’t store the card data directly on the device. Instead, they use digital technologies such as tokenization to maintain security.
Accept the fastest and most secure ways to pay.
Take chip cards, Apple Pay, and Google Pay anywhere and never miss a sale again.
How does NFC work with smartphones and other digital devices?
Customers simply hold their NFC-enabled smartphone or other digital device near the payment terminal. Once a customer initiates a contactless payment, NFC technology begins the secure exchange of data required for transaction verification. Using the specific RFID frequency mentioned earlier, the NFC-enabled reader and the device or card pass encrypted information back and forth to each other to complete the payment within seconds.
Multiple NFC-enabled payment solutions with NFC chips are available today, using smartphones and smart cards. In Canada, most credit cards and many debit cards are equipped with NFC chips for contactless, or ‘tap to pay’ functions, enhancing secure payments. For iPhone users, Apple Pay is integrated, while Google Pay offers solutions for Android devices.
EMV and NFC: What’s the difference?
EMV and NFC are often mentioned in the same conversations because they both represent the future of more secure, authenticated payments. However, EMV and NFC are not equivalent as they have different functionalities.
EMV (Europay, Mastercard, Visa) is a set of standards governing both NFC protocols and EMV chip card technology. While EMV focuses on secure payment standards, NFC technology enables the wireless contactless transactions associated with mobile payments like Apple Pay.
When people talk about EMV as a kind of payment, they’re often referencing EMV chip cards. Such cards often contain an NFC chip which allows the exchange of encrypted data during transactions. A chip card is a super secure form of payment that encrypts bank information.
NFC, on the other hand, is associated with contactless payments like INTERAC Flash® mobile payments like Apple Pay—basically, anything you tap to pay.
Many consumers use both. As long as your business is equipped with an NFC-enabled POS system and card reader, you can easily accept all forms of payments, including contactless payments. You can also benefit from the digital identity verification provided by NFC technology, enhancing authentication measures in transactions.
Why should I accept NFC?
NFC technology is paving the way for a simplified payment method by ensuring secure connections between devices. NFC-enabled payments are better for your business for three key reasons: they’re faster, more convenience, and more secure.
Faster
NFC transactions are the fastest way to pay—they take just seconds, a fraction of the time of magstripe, chip card, and cash transactions. And that speed is a huge plus for businesses—faster transactions mean more sales. And as people have started to realize that contactless is the faster, easier alternative, they’ve adopted the contactless way of life.
More convenient
What’s easier than tapping your card or phone? When it comes to making a payment, not much. That’s one of the reasons why it’s the preferred payment type among Canadians—in fact, a recent survey found that more than 1 in 3 Canadians always or often use contactless cards. If you want to accept your customers’ favourite form of payment, NFC is the way to go.
More secure
Contactless cards are protected by the same technology that secures a regular EMV chip card.
Mobile wallets like Apple Pay tokenize your bank details, meaning they replace your information with algorithmically generated random numbers called tokens. These tokens then pass through the networks needed to process the payment, without exposing your actual bank details. What’s more, these tokens change every time an NFC transaction takes place—so the data is nearly impossible to isolate and extract. NFC payments using Apple Pay are additionally locked with the fingerprint technology built into the iPhone, ensuring a higher level of digital security. Fraudsters may be tricky, but they can’t replicate your fingerprint. As further security assurance, Apple Pay is protected by Touch ID, Apple’s fingerprint technology. Therefore, even if your NFC-enabled device is stolen, your sensitive data remains secure in a digital form. This security is the reason why NFC payments using Apple Pay are supported only on newer iPhone models equipped with Touch ID.
How do you pay with NFC?
For a contactless payment to work seamlessly, one simply holds the card or phone two inches or less from the reader. The payment will be processed in a few seconds.
How do you accept NFC?
To accept NFC mobile payments at your business, you’ll need to get set up with an NFC-enabled reader that can accept contactless payments. These readers are capable of processing NFC payments using NFC chips embedded with cards of smart devices. The Square Reader (2nd generation) accepts NFC (contactless) payments.
Costs for NFC point-of-sale systems
While some systems can cost in the hundreds of dollars, they don’t have to cost you an arm and a leg. The Square Reader (2nd generation) accepts both EMV and NFC payments and costs just $69.
Familiarizing yourself with NFC as a customer
Familiarizing yourself with how to pay with NFC as a customer will help you troubleshoot any issues your customers might have when they go to pay with their device. Plus, it’s good to be up to speed on where the payments industry is headed.
Getting yourself set up to pay via your mobile phone is relatively easy. Most mobile wallets use your phone’s camera to read the numbers on your credit card (which, as we mentioned above, become encrypted). You may also sync your digital wallets on your iPhone with iTunes billing info if you have iPhone 6s or newer and want to use Apple Pay. (Check out our step-by-step guide on how to pay with Apple Pay here.)
Accept the fastest and most secure ways to pay.
Take chip cards, Apple Pay, and Google Pay anywhere and never miss a sale again.