Near-field communication (NFC) technology powers tap-to-pay cards and mobile wallets like Apple Pay and Google Pay. It enables fast, secure transactions without swiping or inserting the correct side of the chip card. According to Juniper Research, the value of NFC transactions is expected to double within five years. If you’ve been waiting to upgrade your payment system, now might be the right time.
Updated tech standards and more contactless methods may boost the popularity of this option even more. Here’s what small businesses need to know, including how NFC mobile payments work, how they compare to Europay, Mastercard, and Visa (EMV) cards, and what’s required to get started.
What are NFC payments?
NFC mobile payments let customers pay using their smartphone, smartwatch, or contactless card. The transaction happens by holding the device (or card) next to a compatible card reader. According to McKinsey’s 2024 Digital Payment Survey, 28% of consumers used a mobile wallet in-store, and 1 in 5 said they “often leave home without their physical wallet.”
Samsung Wallet, Apple Pay, and Google Pay lead the market. Still, Apple’s decision to allow third-party developers to access its NFC tech is expected to bring consumers more mobile wallet options. And that means small businesses could have more choices as well.
[Read more: Need a Mobile Point-of-Sale System? Here's What You Need to Know]
How does NFC work?
NFC is a short-range wireless technology that allows two devices to exchange payment information when held super close, like within centimeters. It’s a form of RFID (radio frequency identification), the same tech used to scan barcodes, but much more precise.
Until recently, certified consumer NFC worked at a distance of about 0.5 centimeters. A new update, NFC Release 15, expands that to 2 centimeters. The update means faster taps, fewer misreads, and better customer experiences.
The process is often safer than inserting or swiping a card, thanks to security protections like:
- Tokenization: The real card number is never shared. It generates a one-time-use code for each transaction.
- Biometric or passcode verification: Mobile wallet transactions require a face ID, passcode, or fingerprint.
- Encrypted data: The encrypted random token can’t be reused even if intercepted.
You don’t need an expensive setup to start accepting NFC mobile payments. Many POS systems offer iPhone apps, or you can pair a small reader with your device.
How to accept NFC mobile payments
Your business needs a POS system or card reader with NFC capability to accept mobile wallets. Many modern systems already include this, but you may need to enable contactless features in your settings or upgrade your hardware.
Get started by:
- Checking with providers offering tap to pay on iPhones, eliminating the need for extra equipment.
- Comparing rates for contactless transactions between credit card processors.
- Making sure employees understand how NFC works so they can assist customers.
Best NFC payment options for small businesses
You don’t need an expensive setup to start accepting NFC mobile payments. Many POS systems offer iPhone apps, or you can pair a small reader with your device. Others provide stand-alone terminals and portable hardware designed to simplify inventory and payments at your business.
Here are the top POS tools small businesses can use to accept NFC payments:
- Square Point of Sale: Accept tap to pay using Square’s NFC-enabled readers or directly on your iPhone with no hardware. This option is great for pop-ups and brick-and-mortar shops.
- Shopify POS: Connect your online and in-store systems with NFC checkout. Shopify offers customer and inventory tracking tools.
- Clover: Use NFC-ready devices like Clover Mini and Clover Flex in full-service restaurants, cafes, or stores.
- SumUp: Process NFC, chip, and swipe transactions with a simple Bluetooth reader and free app.
- PayPal Zettle: Take contactless cards and mobile wallets through Zettle’s compact NFC reader. It deposits funds into your PayPal account for quick access.
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