What is NFC and How Can it Help Your Business?

NFC Payment

~by Katie Kapro~

I recently got a new mobile phone – the smartest of smarty-pants phones I’ve ever owned, to be honest. And of course the first thing on my mind is exploring all the new apps and icons.

I drag open the main screen to find “Airplane Mode”, “Wi-Fi Calling”, “Flashlight” – all pretty intuitive features, and think for a moment that I’ve got this under control. But then I find one that might as well be in Chinese. Not even the symbol – a gray square with the cutout of a broken “N” – is familiar. Beneath the icon it reads “NFC.”

What the heck is NFC?

NFC, or Near Field Communication, is something many entrepreneurs use every day for processing credit cards and mobile payments. It’s a chip technology that allows two devices to communicate with one another without contact and without an Internet connection. People just hold their smart phones within two inches of an NFC-enabled reader, and bam, their payment is received.

Is it Safe?

Now, the first concern to pop into most people’s heads is that if it’s so easy for a reader to take payment, what’s to stop someone from walking by on the street and slyly stealing all someone’s money in a single brush of the arm?

No one wants to be that retailer who encourages her customers to use a new technology that then proceeds to lose them all their money. Not great for repeat business, obviously.

Not to worry. So far, the overwhelming consensus of security experts is that NFC is just as safe as other PoS technologies. While there are risks with any sort of financial transaction, from swiping a debit card in a magnetic card reader to carrying cash, the security features of near field communication are some of the most highly developed:

  • Consumers are protected by certified secure elements on par with chip and PIN security
  • Consumers can opt to authenticate transactions of any amount with a PIN code. 
  • Unknown applications can be instantaneously blocked, similar to how bank cards can be blocked when malicious activity is suspected.
  • Bank card information is stored in the cloud instead of on the device itself, called HCE (Host Card Emulation).

Where Did it Come From?

When wildly futuristic technologies like NFC make their way into daily life, it’s fascinating to dig into where they came from. Did a time traveler from the future share a secret with a lucky inventor? Did it happen by mistake like the discovery of microwave technology? Or did it work its way up the innovation ladder like the other technologies of the world?

Sadly, NFC did not come to us through a time traveler. NFC stems from a technology that’s been in use for years called radio-frequency identification, or RFID. Simply put, RFID uses radio waves to read and capture information stored on a tag. These tags are common in retail stores on high-ticket items like computers and appliances. You’ve more than likely come across a few in your daily life. They look like a simple square corn maze, minus the corn.

RFID tags have been used on everything from groceries to airport luggage tags to cattle tags. And now, the evolution of this technology can combine all of those things by, for example, helping you to buy groceries for your plane trip to visit a cattle ranch in Texas.  Or, if you don’t have any Texas vacations in the works, it can simply be an easier and safer way to run your business.

Can I Use the Cloud for Everything?

Even though 1 in 5 PoS systems in the U.S. are already using NFC technology, mobile payment systems is still an emerging field. When it comes to record-keeping, not everyone is quite ready for it. To that end, it’s prudent for entrepreneurs and small business owners to keep records outside of their mobile devices.

To keep aligned with the environmental and cost-saving efforts of switching to NFC, records should be printed using recycled paper and refurbished ink cartridges. There’s no need to revert back to the wasteful ways of early business when offices threw away ink cartridges like candy wrappers.

Transitioning business from hard copy to the digital medium is not without its speed bumps.

Hospitals are presently facing the brunt of this struggle as they switch from paper records to EHRs, or electronic health records. EHRs, it turns out, are a main cause of medical malpractice suits filed against doctors to date. The malpractice lawsuits allege everything from typos to poor voice recognition in EHRs, causing medication errors, improper status updates, and patient death.

Enjoy the Adventure of New Tech

It’s important to note that taking payment and keeping records are two different animals. Perhaps they will someday merge in a functional and beneficial manner.

Until then, small business owners will be wise to push forth with the adventurous spirit that leads them to embrace new technologies, yet be prudent with keeping records at the same time.

The smoother the transition into new technologies, the easier it is to enjoy them.

.Do you have experience using NFC? Please share it with us in the comments!

Meet the Author: Katie Kapro

Katie Kapro has worked for locally-owned, women-run businesses since she was 16. She holds her MFA in non-fiction writing, and can usually be found ogling jewelry at her favorite bohemian boutique.


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