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6 Things Your Business Should Know About NFC and Mobile Payments

Image via Flickr by Joe Ross

NFC or ‘near field communication’ is the latest tech trend aiming to consolidate the consumer experience. The mobile technology uses a connection between two actors: a NFC device and some sort of information receiver or emitter. Despite its perceived simplicity in explanation, businesses often encounter uncertainties when discussing the possibilities for adding NFC infrastructure to their businesses. Here are a few things your business should know about this fast-moving, widespread business trend, particularly its use for mobile payments.

1. NFC Devices Make Mobile Payment Easy

The NFC technology makes paying for goods even more convenient than credit cards. Reaching for a wallet will be a forgotten habit if the technology reaches widespread popularity. All consumers have to do is tap their NFC device against an NFC terminal or signal receiver and the transaction is complete. These automatic connections simplify the consumer experience and aid in the further evolution of monetary exchanges. If NFC isn’t an option, consider one credit card digital wallet to complete all of your purchases and transactions. Safety is always a priority when making mobile payments, so make sure that you’re protecting yourself the right way.

2. Short-Range Communication Is Safer

NFC technology sounds like Bluetooth due to its mobile connection abilities and sharing compatibility; however, NFC sets itself apart from Bluetooth in two keys ways. First, Bluetooth pulls information from devices up to ten meters away. NFC connections need a shorter distance of four to ten centimeters. Second, Bluetooth requires a mediator to help set up the connection between two devices, while the connection is instantaneous (about 1/10th of a second) with NFC. This shorter distance and instant communication prevents unwanted interception of sensitive information that is seemingly flying through the air.

3. NFC Lacks Mainstream Use Due to Competing Development

Unfamiliarity with NFC technology is not unlikely in today’s general population. NFC’s popularity has been severely stunted by banks, credit card companies, and phone carriers competing over NFC development. Google, Apple, and PayPal are all finding ways to develop the widespread, branded NFC technology. Meanwhile, in Japan, businesses have highly integrated NFC systems for mobile payments and consumer recognition.

4. NFC Allows You to Track Consumer Behavior

An indirect and valuable feature of NFC is its ability to track and predict consumer behavior. While savings card and frequent buyer cards already track what customers buy at their businesses, the unique two-way communication ability of the NFC device allows businesses to track, categorize, and instantly turn this personalized information into a marketing strategy unique to the consumer. NFC terminals can relay coupons and directly transmit marketing incentives through a single touch.

5. There Are Security Concerns with NFC

While the short-range of NFC interactions does offer superior protection from unwanted interception compared to longer-distance technologies, especially in crowded areas, there are almost no universal safeguards to protect your information when using NFC.

Consumers must trust banks, credit card providers, and companies like Google, to encrypt their information. Other suggestions for preventing the always possible security breach involve consumer behavior, such as turning off the phones’ NFC capabilities when not in use; however, this may decrease its desirability as the instantaneous trait is particularly pleasing to the mobile world. Consumers should be advised to look into identity theft protection services if they decide to use NFC enabled devices.

6. Many Businesses Will Adopt NFC Infrastructure

NFC developers and technology companies are still wrestling with many of the concerns about the security of NFC; however, technology forecasters are predicting widespread usage within the next six years, akin to that of Japan. Already in 2014, one in every five phones has NFC capabilities. Businesses will benefit from adding the NFC terminals and infrastructure to their businesses, including replacing earlier one-way RFID readers, which limit communication to ‘person to company’ and not vice versa.

The future is bright for NFC and easy, quick mobile transactions. The technology is already moving us towards a more intimate relationship with the businesses, retailers, and marketers who sell the goods consumers know and love. As companies work towards the perfect NFC device, businesses adopt infrastructure that make NFC payments possible, and as consumers learn about the accessibility and ease of use, NFC will infiltrate the mainstream and become a household name in technological development.