Apr 19, 2023

NFC payments: What are NFC payments?

A guide to NFC Payments

With the introduction of digital wallets such as Apple Pay and Google Wallet to our lives in recent years, it’s unsurprising that NFC Payments are dominating the payments industry. With more of us reaching to pay for goods with our smartphones, over cash and chip & pin, it’s never been a better time to start utilising NFC payments within your business.

This comprehensive guide will help you navigate the world of NFC payments and understand how using this payment method can benefit your business. It will also explore the security benefits that come with offering NFC transactions.

What is NFC payment?

In short, NFC is an acronym for near-field communication (NFC) and means that two devices can connect over a short range. NFC payments are contactless digital payment options that allow smartphones, tablets, smartwatches and credit cards to communicate over short distances and thus pay for products on NFC-enabled card readers.

Everyday forms of NFC payment you may be familiar with include Apple Pay, Samsung Pay and Google Wallet.

The evolution of NFC

NFC payments are an evolution of RFID (radio frequency identification) technology. While RFID is designed for long-distance communication, NFC has a much lower transmission rate. This is because NFC is a wireless transfer data method. It is set up to only operate within a few centimetres.

In technical terms, NFC uses a specific RFID frequency (13.56MHz) to create close-range communication between digital devices.

Previously, NFC was mainly used in hotel room keys and identification cards. However, the technology is now more frequently used to power contactless payments.

How does an NFC payment work?

As aforementioned, NFC technology authorises devices to wirelessly communicate with one another, only when the pair is within a few centimetres of one another.

NFC payments use an RFID frequency (13.56MHz) to establish wireless communication between the payment device and the NFC-optimised card reader. Once the payment device is within a very close range of the card reader, payment is initiated using the RFID frequency.

This lightning-fast payment method sees the payment method sending encrypted information to the card reader, and vice versa. Once this data has been transferred, the payment can be authorised. The NFC contactless payment is thus completed and the transaction has been successful.

NFC payments offer security benefits

This close-range data transfer is favoured by digital wallets (think Apple Pay and Samsung Pay) because NFC payments are regarded as secure by both businesses and customers. 

NFC mobile payments, card payments and smartwatch payments are encrypted. Encryption is the process of converting information and data into code to prevent unauthorised access. Put simply, when you’re transferring sensitive data like payment details via your smartphone or smartwatch, you want to do so knowing you’re protected. Encryption should help to do this. 

Most contactless payment providers have made sure that digital wallets only communicate with NFC readers when the user's iPhone, smartwatch or tablet has been unlocked. The user also has to physically select the payment card to use. Holding their phone to a card reader won’t just trigger a payment.

An additional security benefit of using NFC payment is that NFC payment readers can only connect to one payment device at a time. This means if two people go to use NFC payments simultaneously, only one will end up sending over encrypted data.

Why should you accept NFC payments?

There are a multitude of reasons you and your business should start accepting NFC payments. Let’s deep dive into a few of them:

Convenience is key

In the past few years, we’ve started using smartphones to manage our daily lives. This is why Apple Pay and Samsung Pay have become popular methods of payment. NFC payments are primarily used out of convenience. Offering these types of transactions in your store is a fast and convenient alternative to paying with cash or cards.

Secure payments

As previously mentioned, an NFC contactless payment is encrypted. This means that every transaction creates a unique code that cannot be replicated.

Apple Pay is also locked via iPhone fingerprint or face-identifying technology. This means that data is almost impossible to extract from smartphones. This helps position NFC payments as a safe method of data transfer between your business and your customers.

Speed is the aim of the game

Your customers’ lives are busier than ever. They may not have the time to enter their PIN codes when buying your goods. However, by utilising NFC payments in your business, you will appeal to their fast-paced lives and make purchasing with you quickly and easy.

How do I accept NFC payments?

Before you can start accepting NFC payments you need to make sure you have two things: an enabled card reader and the ability to accept e-wallet payments. 

An NFC-enabled card reader will allow you to accept all types of contactless methods of payment from your customers. For example, Apple Pay and contactless card transactions. If your current card machine doesn’t accept contactless payments from cards, smartwatches or smartphones, you will need to upgrade before accepting NFC payments.

The second thing you need to make sure you do before you start accepting NFC payments is update your credit card processing plan. You need to make sure that your plan allows you to accept digital e-wallet payments. Some merchant account providers do this automatically. However, it is best to check if your account is up-to-date.

How much does it cost to accept NFC transactions?

Processing fees for NFC payments are often the same (or at least very similar) to regular card-present payments. However, exact pricing will vary depending on your merchant account, plan, and business bank account. It’s worth liaising with your account provider regarding the exact cost of accepting NFC transactions.

Different types of NFC payments

There are different types of NFC transactions. Let’s detail a couple of them;

What is NFC mobile payments

An NFC mobile payment is a contactless transaction option. It lets you accept digital wallets (like Apple Pay and Samsung Pay) as a method of payment. As long as you have an NFC-enabled card reader, your customers can pay for goods and services via their digital wallets on their phones, smartwatches or tablets.

Whether you exclusively operate online or run a brick-and-mortar retailer - NFC and contactless payments are a safe and secure way to sell your wares.

NFC and contactless payments

Another contactless NFC payment method you can use is peer-to-peer (2p2) payments.

This is where two devices with NFC technology connect to share data. An example of this is using PayPal or Venmo to pay your family back the money you owe them. 

As well as mobile payments, you can use QR codes to collect contactless payments. QR codes became particularly popular during the pandemic, however, usage is still projected to increase. According to research the total number of QR code payment users is expected to reach 2.2 billion by 2025. On top of this, a whopping 86.66% of smartphone owners across the UK and Europe reported scanning a QR code at least once between February 2021 and February 2022. This increase in both use and familiarity with QR codes has meant its application as a payment method is also becoming more popular. 

The speed and convenience of taking payment by QR code is especially important with businesses trying to reduce friction points, for example, long queues by offering a super fast payment method for smaller orders. Walmart and Amazon are among those retailers trialling QR codes as an alternative payment method. 

What types of devices are NFC-enabled?

As long as you have an NFC-enabled card reader, you can start to accept NFC payments. You’ll also be able to accept payments from various different types of devices:

EMV chip credit and debit cards

Almost all banks and financial services issue credit and debit cards with EMV chips. These contactless cards can be held over or tapped on an NFC reader to approve contactless payments. Your customers can use their contactless bank cards to purchase your goods and services in-store. This is a common NFC transaction.


You can accept payments from all iPhones. This is because Apple has made it possible for all iPhones to be NFC-enabled.

Many Android smartphones also offer NFC payments for goods. You will also be able to accept transactions from customers who use digital wallet apps, such as Apple Pay, Google Wallet and Samsung Pay. This is because these digital wallets are approved NFC payment methods.


To process NFC payments from customers’ smartwatches, the consumer must have already configured their payment information via a mobile wallet. Once this is set up, you will be able to start collecting NFC smartwatch payments.


Not all tablets are NFC-enabled. However, many can be. Once configured, you can accept from a tablet in the same way that you would a smartphone.

Being NFC-enabled is a must for customer experience

So, now you should be a little more clued up on what an NFC payment is and how it can benefit your business. The main points to take away are that NFC payments are convenient, secure and can take place at lightning speed.