How Does NFC Work? Everything You Need to Know

NFC is playing an ever-increasing role in the mobile payment space and as such, it is increasingly important to understand it and how NFC actually works. The financial technology involved in NFC (Near Field Communication) is actually deceptively simple but has an array of benefits when it comes to the world of mobile, as well as fast and easy card payments.

How Can I Use NFC?

NFC chips are stored in most modern mobile devices and smartwatches as well as newer versions of credit or debit cards. While contactless card payments are not necessarily a new phenomenon, mobile and smartwatch payments using NFC are far more exciting as it completely simplifies and speeds up the payment system. 

There are a number of different types of NFC offered by various fintech companies and mobile OS companies also offer variations of NFC. Each different offering will have minor differences in terms of functionality, but the main premise will remain the same; simplifying the payment process.

So, How Does NFC Work?

NFC, which stands for near field communication, allows the transfer of data between one port and another. The most common form of data transfer using NFC is payment and financial data using contactless payments via card, mobile or smartwatch. 

There are two main ways in which NFC works, one-way communication and two-way communication:

One-way Communication

For one-way communication, NFC works via a powered device that reads and writes the data to an NFC chip. The powered device with one-way NFC will be items like cards, smartphones and watches etc. NFC works here by tapping or swiping your device, the NFC chip then takes and reads that data and will act accordingly, for instance, subtracting money from a card.

Two-way Communication

Two-way NFC works via two readable devices, both equipped with NFC chips that can read and write data to one another. For example, using two mobile phones to transfer links, photos and other forms of transferable data.


Are NFC Payments Secure?

The most important step in the mobile payment transaction is the secure element, which holds all the authorization power. Whether it’s a chip in the phone or virtual functions in the cloud, the secure element is tamper-proof and protected by a unique digital signature. As explained by Michael Armentrout of Infineon, which manufactures secure element chips, the architecture of the secure element is designed to be hardened against attacks on the phone.

Imburse Payments have a whole team of experts who are always more than happy to answer any questions you may have. Get in touch with us today to find out more.


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