4 Ways NFC Technology Can Make Your Business Safer

Now that both Apple and Google have thrown their support behind NFC as the driving mobile payment technology, smart businesses are thinking hard about when and how to start accepting contactless mobile payments. An impressive 9.5 million point of sale terminals that shipped in 2014 were NFC-ready, and a Berg Insight study expects that 74.9 million POS systems will be equipped to accept NFC payments by 2019. 

But for businesses that are considering accepting NFC now or in the future, security is a big concern that has to be addressed, especially in this era of nonstop data breaches.

The good news is mobile payments using NFC technology can actually help you offer a more secure payment option to your customers. Here are four reasons to consider incorporating NFC as a new, secure payment type for your business:

1.    It’s Short-Range By Definition

One of NFC’s key features lies in the first two letters of its acronym: near field. This means the technology can only be used when you’re very close to an acceptance point. It has an extremely short range, and for good reason: If a criminal wanted to steal your NFC signal and use it to pay, they’d have to be very close to you—close enough to tap your phone with a skimming device. Not impossible, but thankfully NFC is built to only work when you want it to. The chip won’t send a signal when your phone is in standby mode.

2.    People Notice Missing Phones

Unlike credit cards, when a phone goes missing, its owner is likely to notice pretty fast. We’re constantly tied to our phones and rely on them for everything from checking the time to communicating for work and play. So while a missing credit card might not be noticed until after fraud has been committed, odds are good that a stolen phone will be noticed and reported quickly. Plus, today’s phones have location technology that makes them easy to track down, and remote wiping capabilities that make it a cinch to brick them from a distance to prevent misuse.

3. There are More Authentication Variables

It’s pretty easy for a criminal to swipe a credit card and fake a signature (especially because these are used for record keeping, not identity authorization). It’s much harder to commit fraud using NFC because there are more—and more secure—authentication variables at play. These include: 

●    Fingerprints & Passwords

Generally, when an NFC-enabled device is used for tap-to-pay, customers will be asked to either use their fingerprint or a password to approve the transaction. This is much safer than a signature, which can be easily forged, giving NFC a leg up on credit cards (which, again, can be stolen or counterfeited much more easily than smartphones). Using fingerprints specifically eliminates the need to use or transmit PINs and passcodes, which adds another layer of security. 

●    Secure Element

Next, a separate chip called a “secure element” or SE will relay the authorization back to the NFC device. This is the most important link in the security chain for NFC, because it’s tamper-proof and has its own unique digital signature. Each transaction gets a specific, single-use code that’s transmitted in lieu of sensitive bank account or credit card details. Secure elements are specially designed to ward off both hardware- and software-based attacks. (Note that on some phones, the hardware-based SE is mimicked with host card emulation.)

4.    Businesses Don’t Have to Store Credit Card Numbers

The secure element (or HCE) means that businesses are not storing credit card information from transactions in their systems, just unique transaction numbers, which are virtually useless to hackers. That means hackers can’t break in and steal customer credit card information, as has been the case with many of the recent breaches. Not only does this protect customers from having their financial information stolen, but it also protects businesses’ reputations and helps avoid liability for fraudulent charges.

As you can see, while mobile payments may feel like a new-fangled and unproven payment type at this point, NFC actually holds the promise of being more secure than traditional credit card-based transactions. 

Accepting mobile payments at the register also helps businesses demonstrate that they’re forward-thinking, which can carry significant benefits, particularly with millennials. Plus, as we’ve pointed out before, it’s been shown that people spend more money when they pay with their phones. (Ka-ching!) 

As a business owner, it’s well-worth considering whether to accept NFC-based mobile payments at your register, not least of all because, if Apple and Google have anything to say about it, this technology will soon rival credit cards as consumers’ preferred way to pay.

Are you thinking about accepting NFC-based mobile payments at your business? Do you already accept them? What has your experience been like so far? Tell us your thoughts on Twitter: @cayan.

You Might Also Like:

●    Apple Pay: What Does it Mean for Your Business?
●    3 Ways Businesses Can Make the Most of Android Pay
●    Data Breach vs. Fraud: What’s the Difference?