Banking needs protected payment medium to overcome the unwanted risks as they are the concentrated and challenging areas of the business world. On top of it, the electronic payments phase has further increased this responsibility of banks. Every financial sector knows the curse of cyber threats, but with NFC technology, these sectors can avoid such circumstances. It is one of the fundamental reasons that banks are using NFC for secured transactions nowadays. Well- reputed companies (Apple Pay, Samsung Pay and Google Pay) are facilitating POS and finance departments through NFC technology.
NFC stands for Near Field Communication was first deployed by NXP Semiconductors and Sony company in the year 2002. NFC technology becomes active when devices don’t carry any Wi-Fi signals, when mobile phones don’t have a cable to transfer files, documents, photos, or when users are out of credit and balance. In these scenarios, NFC offers a fast way of establishing communication among digital devices.
Why Banks Use NFC?
Surprisingly, contactless cards are more in demand as no physical connection is compulsory between the reader and tag. In these cards, the chip waves the terminal and transmits the data through radio signals. Near Field Communication (NFC), which is the bright future of the RFID technology, provides new paths to financial companies, card providers and financial institutions.
While helping the banks to process secured payments, it permits individuals to ‘‘Tap and Go’’, a way to offer ease of use and fast connectivity. Banks like Commonwealth Bank are already using NFC technology for secured payments. With time, NFC technology will eradicate the concept of ‘‘cash on hand’’.
So, let’s begin how banks are using NFC technology for making contactless payment cards;
Working of NFC Payment Cards
The working procedure of NFC cards starts when payment devices hold close to a terminal reader or scanner. After this, both devices get activated and terminal extracts encrypted data from NFC chips to process the payment procedure.
The mobile phone equipped with NFC chips conveys data to the payment terminal for initiating the cash transaction. In the end, the NFC process eases the checkout flow by processing the rapid transaction. It sends encrypted data through radio frequencies without touching the reader terminal and phone screen.
Other Potentials of NFC cards
NFC cards are not meant for providing secure payment only, the potential of these contactless cards can be scrutinized from the following points;
- NFC technology is interoperable. It can work with present technologies seamlessly
- NFC technology is a cost-effective solution in contrast to RFID and Bluetooth
- It has a versatile approach, helping industrial sectors, business enterprises to process data
- The components of NFC technology follow the international standards, including ETSI, ECMA and ISO
- NFC components interact with users intuitively
Digital banking and transformation are the future of banking industries. It allows the bank to understand the customers’ requirements and to realize what they want. NFC technology is a leading example of technological innovation in the digital epoch. With NFC cards, banking sectors reduce cyber threats, improve efficiencies and productively serve the customer.
