Home References All about NFC and mobile payments

Near Field Communication (NFC) technology has been around for quite some time, but, until recently, its usage was limited to contactless smart cards and commuter cards. However, even those who have never owned any NFC-enabled device (like the Samsung Galaxy S6 or the Samsung Galaxy S6 Edge) have probably used NFC- the technology which is embedded in things like smart cards, commuter cards, print advertisements etc. and enables two local devices to share small chunks of data.

NFC has become more relevant than ever before especially when it arrives to the mobile payments as it is being placed in more Android and Windows phones, and also in Flagship devices like Apple Watch, iPhone 6 and iPhone 6 Plus.

What is NFC?

NFC refers to high frequency near distance wireless communication technology used extensively in radio frequency identification (RFID)- based applications. Its working is similar to Bluetooth, as it allows two local devices equipped with NFC technology, placed within a few centimeters to exchange data over a secure network.

Most Android phones are pre-equipped with NFC technology and were the early adopters of Mobile payment when Google started using NFC technology for this purpose in 2001 with the launch of the Google Wallet. Apple’s Passbook application enabled with NFC technology is available in the iPhone6 and 6+ and offers the same mobile payment service.

How to use NFC?

To use the service, the mobile payment application on has to be launched on the handset, the smartphone has to be tapped in front of the checkout terminal, thus enabling the NFC connection between the smartphone and the terminal. The terminal will then ask the customer for the unique PIN, passcode or even their digital signature which could be in the form of scanning their finger for the transaction to be processed. Once the transaction is approved, the amount gets automatically debited from the customer’s wallet once validated by the Secure Element, another chip that works to relay the authorization back to the NFC terminal.

NFC and Mobile payments

NFC technology is a way to the future when smartphones will replace physical wallets as a means of payment. In context of the recent credit card data breaches, finally an efficient solution has arrived that is capable of shielding the wallets from fraud and theft. By storing information related to the credit card and debit card in your mobile wallet, the risk associated with carrying multiple credit and debit cards is eliminated. Early concerns about security and privacy of information have been mostly unfounded as all transactions carried out using a mobile wallet, whether it is NFC based or cloud based are protected by a unique PIN or password or digital signature. Even if the customer’s mobile is stolen, there is very little risk of losing confidential information as the mobile wallet service can immediately be disabled.

NFC payments are already in wide use in South Eastern countries like China, Korea and Japan. Meanwhile, markets like the US and Europe are picking up rapidly and new service offerings are being launched every day to get over early consumer reluctance.

Three years following the Wallet’s introduction, Apple stepped into the game with Apple Pay. Combined with Apple’s Touch ID Fingerprint Scanner, it arrived as a combined solution that may finally take the NFC technology go mainstream.

The major concern accompanying NFC payments is security but any hacking or interception kind of activity is quite difficult due to the complexity of the mobile payment structure. To analyze how, here’s the way it works.

How secure are NFC Payments?

The most important aspect of mobile payment transactions is the secure element, holding the entire authorization power. Be it a chip in the phone or the virtual functions in the cloud, the tamper-proof secure element is designed to be protected by a unique digital signature. The secure element chips are designed to be hardened against any attack on the phone. This includes extreme difficulties for obtaining info off following software attacks along with the hardware attacks where someone got your SIM card or your phone owing to the fact that they have security mechanisms well beyond the ordinary processors.

Other ways to use NFC

In case you own an NFC-enabled device, then you can use it in some other practical ways other than mobile payments.

NFC Tags – Probably the most common way NFC is used in Android and Windows devices is by tapping a strategic NFC tag, to prompt your device for taking actions on something.

Android Beam – This Android technology can be used to exchange information between the two pairing Android devices.

For more information and creative ideas on NFC, you can check out this post.

 

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