Published On: August 25, 2021

As technology continues to advance, there are more and more convenient ways to make secure transactions both online and in-person. Perhaps you’ve already discovered the myriad of ways you can make purchases through your phone, watch or other mobile device and do away with a bulky wallet full of paper cash or plastic credit and debit cards. Many of the latter can now be added to and accessed via an app on your mobile device.

Alternatively, there are a growing number of payment apps, like GooglePay, Apple Pay, Android pay and Samsung Pay you can download, configure and use to pay for almost anything. In fact, according to a Report to CIRA by the Strategic Counsel, in 2020, nearly one third (29%) of Canadians said they had made a purchase using mobile payment or a digital wallet. This is not surprising, as a growing number of Canadians, 88% surveyed, currently own a smartphone. The convenience and instant gratification of simply tapping your device to buy something is undeniable.

The rise of mobile payments has further grown as a result of the COVID 19 pandemic, which has placed a heightened awareness on the importance of contactless payment options. Many consumers are no longer comfortable having to key in PIN numbers or otherwise touch third-party devices in order to process their payments. Mobile device payments merely require purchasers to place or wave their phone or watch over a payment processing terminal and wait for the familiar beep signaling success.

Mobile payments and digital wallets accessed via smart devices do not require any contact thanks to a relatively simple, but highly effective technology, called near field communication or NFC. While NFC and payment is quick and convenient, there are still some consumers and business owners who do not understand and are therefore not fully comfortable in using this technology to make or accept mobile payments. With this in mind, here is a quick guide to everything you need to know about NFC and its many benefits.

What exactly is NFC?

NFC is a standard wireless communication protocol, like WiFi or Bluetooth, which was first developed in the early 2000s and is based on radio frequency identification or RFID. NFC enables two devices equipped with NFC chips to talk to each other using radio waves. In order to effectively and securely communicate, all of these chips need to use a specific shared set of commands or language. NFC is the language they speak.

How NFC works

NFC-enabled devices can either be passive or active. The mode used will determine how encrypted information flows between the devices.

Passive devices can only send information to another chip/device and don’t require a power source (e.g. a credit card or baggage tag). Passive NFC devices actually receive their power from the active NFC device they come in close proximity to and do not require much power since they are only sending and not receiving information.

Active NFC devices, on the other hand, can both send and receive information (e.g. a smartphone or NFC terminal) and, as such, require more power to do so.

NFC devices can operate in three modes:

  1. Peer-to-peer mode, which requires both devices to pass information back and forth in active mode, for example NFC tap and pay where a smartphone sends payment information to a mobile payment processing device and the device sends a confirmation or other payment related information back
  2. read/write mode, which enables one-way sending or receiving of information from one device to another, for example NFC tags used in mobile ads with links to websites
  3. emulation mode, which is also a limited one-way sending of information, for example credit card payment processing

As the name near field communication suggests and due to the lack of power, NFC payments can only be processed over a very short distance; less than 4 cm or 1 ½ inches. Hence the need to wave your phone, card or other device over a specifically marked area on a mobile payment processing terminal.

The greatest thing about NFC payments is that all of this back and forth sharing of information happens in the blink of an eye. NFC devices, unlike those equipped with WiFi or Bluetooth, connect to each other in less than a tenth of a second and, once connected, data transfer is nearly instantaneous. Far quicker than the time it takes to count cash or make change, while also being far more accurate.

How secure are NFC tap and pay transactions?

One of the primary barriers to more widespread consumer use of NFC equipped mobile devices is concern over personal data security and privacy, which is natural in light of numerous stories regarding cyber hacking and identity theft. However, mobile NFC payments are extremely secure.

Firstly, there is the fact NFC payments and transmissions can only be conducted over a very small distance, thereby limiting the ability for these transmissions to somehow be intercepted.

Further, all back and forth communications are encrypted based on a very high standard to ensure data security and integrity. All NFC equipped payment processing terminals which accept credit card information must be compliant with PCI Security Council standards.

In fact, NFC security on transactions is even higher than it is when swiping credit and bank debit cards. The data contained on the magnetic strip of a credit or debit card, while encrypted, is static. The data transferred via NFC is dynamic and unique, so it is constantly changing, thereby making it more difficult to decipher.

Additionally, when you use a mobile app like Google Pay or Apple Pay, your credit card information is further secured using a system called tokenization. Tokenization means when you upload your credit card information to an app your number is forwarded to your credit card company and then replaced with a unique token, which is what gets stored on your phone and is effectively useless to anyone who may try to steal it.

Lastly, whenever you conduct an NFC tap and pay transaction, your device sends a unique temporary numeric code to the payment processing terminal, which can only be used for this specific transaction.

Why should businesses offer NFC payments?

There are several reasons for retail and other businesses to consider adding NFC and payment options for their customers.

Transaction Speed

The time it takes to process a mobile NFC payment is far quicker than either cash or credit card swipe and PIN transactions. On a one-off basis this may not seem like a big deal, but over the course of several hundred or thousand transactions, the time saved can amount to a significantly higher number of completed sales and higher revenues.

Quicker transactions also lead to more satisfied repeat customers and overall happier staff.

Payment Flexibility

Today’s consumers, and particularly those in a younger demographic, expect flexible payment options when they visit offline retailers. Not offering NFC payment options may be the difference between customers visiting one store or choosing another which does. Conversely, by offering the ability to pay via mobile app or digital wallet, business owners can demonstrate they are progressive and responsive to the needs of their customers.


Automated, digital transactions conducted via NFC or otherwise are, by definition, more accurate as they are governed by a comprehensive set of checks and balances. Further a detailed digital record is automatically created for each and every transaction as a means to reconciling, auditing and reporting, as needed.


We’ve already established the fact that NFC is a more secure way of processing payments, which in turn, can and should be a selling point for any business. And because NFC payments are more secure, credit card companies and banks will quickly deal with any fraudulent transactions, should they unlikely occur.


As payment processors are highly motivated to have their customers choose and adopt quicker, more secure, lower risk NFC payment solutions, the costs per transaction are typically lower than other payment options. NFC technology is being integrated into most mobile payment processing solutions by default and therefore is generally not considered an add-on, but rather a logical value add for business owners.

Adopting NFC Mobile Payments for Your Business

Mobile devices and payment processing solutions equipped with mobile NFC and payment capabilities are only likely to grow in number as consumers both young and old demand a broader variety of secure, convenient, contactless purchasing options. There are few, if any, downsides to adding NFC tap and pay options to your business. However, the benefits for customers and businesses alike in terms of convenience, flexibility, enhanced security and contactless health and safety are obvious.

Are you ready to add NFC and mobile device payment options for your customers? MONEXgroup offers seamless sales and support for the most progressive contactless tap and pay terminals and software solutions in North America. Contact our payment processing experts to ask any questions you may have about how to get started accepting NFC mobile payments for your business today.

Author: Layal Scheirich, Head of Sales at MONEXgroup
Bio: With 18 years of experience in payment processing and merchant services, Layal has seen in-store POS technology evolve from its humble beginnings to contactless, unattended, mobile and online alternatives. Today, Layal is an inspiration to the MONEXgroup’s team and a go-to source of information related to payment processing. She is enthusiastic to share her knowledge with audiences interested in cutting-edge technologies available today, such as unattended payment for self-serve kiosks, e-commerce online payment gateways, virtual terminals, and contactless and mobile payment solutions.
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