Considering NFC? Pros and Cons of Near-Field Communication for Payments

| September 21, 2015 | Technology & Innovation

MasterCard mobile credit card payment with smart phone in retail environmentNear-Field Communication (NFC) technology has generated quite a bit of buzz in recent years, especially as it relates to customer payments. The technology, now built into many smartphones, is being billed as the future of in-store payments. Customers will no longer have to retrieve a piece of plastic to pay, since payment can be completed through a smartphone or wearable.

While there are many pros to NFC, there are some cons, too. Here are a few things you should know if your business is considering implementing a payment processing solution with NFC built in.

Pro: Conserve Battery Life

NFC isn’t the only technology that allows devices to communicate with point-of-service (POS) systems. Bluetooth technology provides a similar benefit. However, NFC requires less power to complete a transaction, making it a better option for device owners who are concerned about keeping a smartphone or wearable going for multiple hours on one charge.

Con: Lack of Availability

One of the biggest downfalls to NFC payment technology at the moment is the sluggish speed at which it is being brought to market. Despite the growing popularity of services like Apple Pay and Google Wallet, the vast majority of retailers simply aren’t participating. This is a problem for merchants interested in winning customers over by offering the technology. When the vast majority of merchants haven’t implemented the technology, businesses have less incentive to put it in place at their own shops.

Pro: Improved Checkout Experience

Long lines are a deterrent to customers, sometimes causing them to leave without purchasing anything. If a shopper finds that on each visit, lines are extremely long, that shopper may soon label the business as too crowded and go elsewhere. NFC can speed up the checkout process for each customer, making lines move more quickly and improving the experience for everyone.

Pro: Security

NFC brings a level of security that a customer doesn’t have with traditional payment methods. Some have expressed concerns about the fact that the information is transmitted wirelessly, but each transaction is imprinted with a unique digital signature, making it difficult for hackers to intercept.

Con: Security

For security experts, the biggest concern about NFC is the sheer amount of data that will soon be stored on users’ electronic devices. Since these items can easily be lost or stolen, information protection is key. The good news is that much of the information today is stored in the cloud, requiring passcodes or fingerprint authentication for access. This means that even if the device is stolen, hackers won’t be able to obtain the sensitive customer data they’d need to commit criminal activity.

There are many pros to NFC and, as the technology becomes more prevalent, the cons will dwindle, making NFC the preferred payment method for consumers and merchants. As the industry makes the shift, however, it’s important that consumer information is stored safely so that only the device owner can access it. Security will be top priority in NFC payments, with convenience following closely behind.

Ramon Ray
Ramon Ray
Ramon is a small business evangelist at Infusionsoft, publisher of Smart Hustle Magazine, and blogs about technology and small business at He is passionate about helping small business entrepreneurs grow their businesses. Ramon is a bestselling author, journalist and freelance writer, and a frequent event producer, speaker and host. Ramon’s third book is the bestseller, “Facebook Guide to Small Business Marketing.” Ramon has shared the stage with Seth Godin, Daymond John, Guy Kawasaki, Simon Sinek, JJ Ramberg, Peter Shankman and other celebrity entrepreneurs. He interviewed President Obama in the President's first live Google Hangout.

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