Skip to content

What Are NFC Mobile Payments and How Do They Work?

As the fight against COVID-19 has had varying success, contactless payment methods have become a measure of customer health safety and convenience. Sellers and merchants should take this into consideration and evolve technologically to stay relevant in the market. Out-of-date payment processing systems may lead to inconvenience among customers and can also be a security risk. This is where NFC contactless payments come into place. Let’s have a more precise look at this technology.

What Is NFC?

NFC stands for “Near Field Communication.” It is a proximity-based wireless communication standard that is designed for a shorter range (only up to 10 cm) and high-speed data transmission between two devices. One device is used as a transmitter and the other one is the receiver. The device on each side can be passive or active.


Passive devices don’t need a power source to receive and transmit data, as NFC is built upon low-power technology. Such devices include NFC readers, advertisement tags, and terminals, which are convenient to use, as they can be located practically everywhere. The main drawbacks of passive devices are that they can’t connect to each other and can’t process data independently.

Active devices need a source of power to operate and, unlike their passive counterpart, can transmit, receive and process data, and connect with other devices. One of the best examples of an active NFC device is a smartphone with an NFC card reader.

The best application of NFC to date is contactless payment via mobile phone, as it is much faster than Bluetooth and much more convenient than a magnetic strip. NFC is used in such mobile payment services as Apple Pay, Google Pay, and Samsung Pay.

How Does NFC Work?

NFC technology is similar to Radio Frequency Identification (RFID), which is built on radio waves that are used to transmit and receive data. The main differences are that NFC is based on a new set of wireless communication protocols and that it’s limited to a specific frequency of 13.56 MHz.

In order to start NFC data transmission, one needs to place both the transmitting and receiving devices close enough to each other. The very moment it happens, the data is encrypted and transmitted via the electromagnetic fields. The receiver may send the data back. This cycle is repeated until the transaction is complete. And all of this happens in just a few seconds.

One of the best NFC features is that passive devices don’t require a power source to operate, as they are activated by the active device’s electromagnetic field appearing at close range.

NFC can operate in three ways:

  • Peer-to-peer, which makes two-way data transfer possible. For example, smartphones use this mode during NFC transactions.
  • Read/write only is the one-way data transfer model where one of the devices is a transmitter and the second one is a receiver.
  • Card emulation is a mode where an NFC device functions as a smart card, which can be used with an NFC terminal.

Are NFC Contactless Payments Safe?

NFC payment security meets all the requirements of the EMV (Europay, Mastercard, Visa) standard. NFC also uses data encryption, which makes it significantly safer than cards with magnetic strips (as those strips can be easily read with special equipment). What’s more, NFC data is dynamic, which makes it difficult to decipher.

NFC Contactless Payments

NFC uses tokenization to encrypt data into unintelligible sets during the transmission process. It means that financial information is replaced with some random number that’s unusable if stolen.

Fingerprints and Face ID also contribute to NFC safety, as they are unique and cannot be replicated. It means that the payer has to authorize the transaction with some biometric data. This makes smartphones useless for third parties, as they can’t get access to financial information.

How to Pay With NFC Mobile Payments?

NFC for mobile payments is quick to get used to. If you want to use it on your mobile device, you have to make sure that this feature is supported. But the seller has to accept such payments as well.

NFC Mobile Payments

Those who prefer Apple devices have to use iPhone 6 and later models to use NFC payments. iPads starting with Pro, Air 2, and 3rd-gen Mini also support NFC.

Android users should have a device of version 4.4 or later in order to use NFC. It is also necessary to turn this setting on in the “NFC and Payments” section.

Once you’ve confirmed that your device supports NFC, you need to select a digital wallet to make payments; luckily, the number of such wallet apps is huge. The final step is to input your credit card data. When it is done, you can make payments just by holding your smartphone near the receiving terminal.


NFC payments bring a lot of benefits due to their security, speed, and convenience. Such advantages will lead to the further expansion of this technology as more and more customers realize how easy it is to use.

Choosing the right FinTech software development team is highly important if you need an out-of-the-box solution. SCAND has sufficient expertise to successfully create a financial digital product that will meet all the customer needs including but not limited to such areas as cryptocurrency app development, blockchain, and NFC payments.

Author Bio