Progressive Payment Solutions

What are NFC Payments and How Can Your Business Accept Them?


Discover what you need to know about NFC payments, how to accept them, and how your business can benefit from using them.

A gentle ‘BEEP’ is heard as you gently move your smartphone forward above the checkout counter.

What just happened?

That beep came from the store’s POS system. You paid for your groceries by merely hovering your phone above their payment terminal.

This isn’t a Sci-Fi story, though; it’s happening right now all around the world thanks to NFC payment technology.

Let’s take a closer look to better understand how NFC payments, how businesses can use them, and what advantages they can provide.

What does NFC mean?

NFC stands for “Near Field Communication”. The “near” part is what makes this form of communication stand out.

Believe it or not, this technology was first patented back in 1983, with its origins tracing back to WWII. It has its roots in radio-frequency identification (RFID), where radio waves are received to communicate, authenticate, and track information.

Since then, however, NFC technology is being used in a wide variety of ways–including payments, as we’ll examine next.

How do NFC payments work?

NFC payments work by establishing a secure point-to-point connection. As the introduction hinted at, the communication technology is fully contactless–you just need to have your NFC-enabled device near another device (a few inches away) for it to communicate with it. 

These devices include smartphones, tablets, and laptops with NFC capabilities, along with a host of other devices such as printers and–you guessed it–payment terminals.

Put simply: the two devices lock on to a unique radio frequency, where there is an initiator that creates the radio frequency (RF) field, and a target that picks up on it and responds by generating its own RF field, thus communicating back and forth.

In the case of making NFC payments, the customer’s device is the initiator and the merchant’s NFC-enabled POS is the target. A secure RF field is generated between the two on a 13.56 MHz frequency and they securely communicate back and forth. 

From there, it’s a two-way communication, with no other devices able to read what’s going on. This ensures a quick, secure transaction.

How do you accept NFC payments?

Of course, the customer will need an NFC-capable device if they choose this way to pay. 

From there, a merchant will need two basic components to accept NFC payments: 

  1. They will need to have an NFC-enabled reader to receive payments. 
  2. They will need a credit card processor and a plan that enables them to accept digital e-wallet payments, which includes NFC payments.

Thus, it’s a fairly simple arrangement needed to accept this payment technology.  

Advantages of NFC payments

All of the advantages of using NFC payment technology can be summarized in these three words: fast, easy, secure.

NFC payments are fast

Forget about swiping, dipping, tapping keys, waiting–all essential parts of making traditional credit card payments. 

Instead, a customer just hovers a device above an NFC reader for less than a second. The reader and the device talk. Done. 

NFC payments are easy

Similar to how fast they are, NFC payments are also very simple. That’s because there aren’t pins to enter, signatures to write, buttons to tap, etc.

Rather, the phone is waved above the reader, and the hardware and the software nearly instantly do their thing without anyone needing to lift a finger. The payment is made, and the customer is on their way. Done! 

NFC payments are secure

Incredibly, these fast and easy NFC payments are also one of the safest ways. This may surprise many skeptics, since it seems that all of this sensitive info is being transmitted into the open air.

However, NFC technology is actually much more secure than traditional magnetic stripe credit cards. 

For one, the communication is only two-way, where the NFC payment device initiates the transaction and the reader picks up on it. From there, the user needs to validate it. This is often done through secure fingerprint scanning on their device or facial recognition.

Secondly, there’s something called “secure element validation”, which is a secondary chip in the device that validates the purchase. This chip provides a unique digital signature, making the transaction even more secure.

And lastly, don’t forget the “N” in NFC: Near Field Communication. The transmission zone between the device and reader is only a few inches–beyond that distance, the radio frequency is lost.

Who will benefit from accepting NFC payments

Since 2010, many Android devices have been equipped with this technology, with Apple following suit in 2014. 

Since then, over two billion smartphones have been manufactured with NFC technology.

In other words, the popularity of NFC payments has exploded. This is due in part to the advantages mentioned above. Customers will almost invariably choose faster, easier, and more secure any day of the week.

That means your business stands to benefit by offering this increasingly popular form of payment. Customers will feel more secure paying at your business compared to others.

They will find it more convenient as well.

NFC payments can also come with loyalty programs, thus further incentivizing customers to come back to your business. Along with these programs come access to important insights from the analytics collected from these programs. 

This analytics data can prove to be a huge advantage when it comes time for your business to make important decisions. Data such as what the most profitable times of the day are and what locations are receiving the most traffic will help your business grow even more.


It’s easy to see why NFC payments are becoming more and more popular: they’re fast, easy to use, and more secure than traditional credit card transactions. Businesses stand to benefit from embracing this new technology by attracting a wider customer base as demand for this payment form increases.

Remember, though–a business needs the right payment processor to accept these payments. Progressive Payment Solutions is happy to enable your business to accept NFC payments, along with helping you save money and grow your business. Contact us today to start moving your business forward.

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