A guide to NFC contactless payments

In 2002, Sony and Philips co-invented NFC and only one year later, this technology was approved by ISO as an industry standard. NFC was officially available in the market in 2006, when Nokia 6131 launched this functionality.

We have come a long way, as mobile payments are now amongst the most popular types of payments in the world. Most people are aware of contactless payments and how they work, but NFC is a more unknown term. In this article, we will discuss all about NFC, including its applications and advantages.

What is NFC?

NFC stands for Near-Field Communication, and it is one of the technologies used to make contactless payments. It uses radio waves to transfer data wirelessly between devices so, unlike Bluetooth, NFC doesn’t require device discovery or manual syncing to transfer data. NFC is supported by mobile wallets such as Apple Pay, Google Pay and Samsung Pay, as well as contactless debit and credit cards, tablets and smart watches.

NFC is based on RFID (Radio Frequency Identification) standards, though these technologies are slightly different. RFID is a more established technology that allows you to identify and track inventory via radio waves. It is used, for example, to scan codes of products in a shop. The main difference between the two technologies is that RFID allows tags to be read from a much longer distance, that ranges from a few centimetres to over 20 metres. NFC, on the other hand, requires a maximum distance of 4 centimetres for the data transaction to work properly.

Contactless payments can be made through mobile wallets such as Apple Pay.

Applications of NFC

Besides allowing contactless payments to be processed, NFC has many other uses. The extensive array of applications includes social networking, such as sharing contacts, messages or links to photos; wireless pairing, to quickly connect two devices via a NFC tag; scanning a boarding pass for travelling or even marketing purposes. Companies and organisations can add a NFC tag to their website or a flyer, for example, so individuals can use their phone to scan it and be directed to a specific online page.

To sum it up, NFC can be used in three different modes:

  • P2P communication

This mode is used to establish connections between two NFC-enabled devices, so individuals can communicate or exchange data with their peers.

  • Read and Write

This mode allows individuals to interact with various sources and companies. You can scan a NFC tag to access a page or download information, for example.

  • Card emulation

With card emulation, customers can use a NFC-enabled device instead of their card for a variety of applications, including contactless payments, ticketing and access control.

Advantages of contactless payments


  • Speed

With contactless payments, customers don’t need to insert their physical debit or credit cards into a reader, add their PIN number or sign- all they have to do is tap their card close enough to the card reader. Contactless payments are up to 10 times faster than any other Card Present transactions (MasterCard report). The faster the payment is, the more satisfied your customers will be.

  • Security

Mobile wallets only store encrypted bank information, so even if your phone gets stolen, nobody can access your real details. Besides, mobile phones come with a range of security protocols to verify each user, such as face and fingerprint identification.

NFC also requires a distance of 4 centimetres or less to connect devices and readers, so criminals can’t extract data from your card from a long distance. If your contactless card gets stolen, you can block it immediately on your mobile phone and your bank is likely to cover any amount that was stolen.

  • Convenience

Customers don’t need to have their wallets with them all the time, as they can use their mobile device to pay for goods. Not only are they fast and safe, contactless payments are also extremely convenient.

The only downside is that there is a £45 cap to all contactless transactions in the UK, meaning you can’t use your mobile wallet or contactless card for any big purchases. In the US, the maximum amount of money you can spend with each contactless transaction is $100. Limits vary depending on the country.

NFC also allows for Peer to Peer communication, including sharing images.

How to accept NFC payments

You need a NFC-enabled reader in order to accept NFC payments. A lot of PSPs offer their own payment infrastructure, such is the case of Square, SumUp and PayPal. Pricing vary for each reader, though they tend to be around £20 for the smallest reader, up to around £150 for a terminal with more functionalities. Square, for example, sells its small reader for £16 and its terminal £149.

You need to take into account both the reader’s set fee and the ongoing fee for payment processing, as they may differ. Each PSP also comes with a different set of functionalities, so you should select the ones that better suit your business’s needs.

How Imburse can help

Imburse connects you to the entire payments ecosystem. By connecting to Imburse, you can deploy any payment technology or PSP you want into your payments system, free from integrations and at no additional costs. Whether you are a fully digital business or operate in physical branches as well, Imburse allows you to optimise your operations and future-proof your payments system so you can offer your customers best-in-class payment experiences. If you are interested in knowing more about our solution, do reach out to our team below.

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