How NFC and Other Cashless Options Are Essential After the Crisis

Even before the Coronavirus outbreak happened, the shift towards NFC-based payments was already happening. Paper money transactions were not only less convenient but the notes and coins themselves could become platforms for the virus to be transported.

The global health crisis of COVID-19 has only forced institutions to rethink every aspect of their business, including the potential introduction of contactless payment. We are already seeing NFC payments after COVID-19 become commonplace as China looked to limit cash usage as early as February 2020. The US and South Korea quarantined cash to contain the spread of the virus while the World Health Organization advised people to sanitize their hands after handling money.

With more people staying home due to government suggestions, global online payment platforms have seen an increase in payments relating to online shopping, streaming services, and online gaming. However, eCommerce plays only a small role in the evolving consumer payments landscape as the COVID-19 outbreak has only accelerated the move towards NFC-based payments as this aspect of the business world truly becomes a part of the ‘new normal’.

What is NFC and How Does It Work?

NFC is a method of wireless data transfer standing for Near Field Communication. This detects and enables technology in a close proximity to communicate without the need for an internet connection. The main benefit of NFC-based payments is that it’s easy, fast and operates automatically as one part of a wireless link. Once it has been activated by another NFC chip, small amounts of data between the devices can be transferred when held a few centimeters apart from one another creating the bedrock for contactless payment.

NFC chips within credit cards for contactless payment is nothing new but now this process can be applied to payments with a smartphone or smartwatch, allowing a person to entirely digitize their wallet. However, regardless of the device or platform you use to make a contactless payment, it’s likely that ones made at a supermarket, restaurant, bar or retail outlet will support it through your phone’s NFC chip.

3 Modes of NFC

NFC operates in three basic modes. These modes make NFC different from other wireless technologies as they provide the flexibility needed to create an environment in which it can be used for a diverse array of needs. The three modes are as follows:

Card Emulation: Looks to replace a credit or debit card with an NFC-enabled device. As opposed to swiping or using one of your cards, the NFC-enabled device will make the transaction instead. This can include a variety of other card types, such as identification cards, loyalty cards, ticketing, and basically any other card-related task out there.

Discovery (Read and Write): The form of NFC allows users to interact with various information sources. This application provides interactions with smart advertising, downloading coupons, acquiring information, geofence marketing, and other sources that rely on both tags and smart posters.

Peer-to-Peer Communication: This mode creates a connection between two NFC-enabled devices. When you exchange information with any other smartphone user, it’s the peer-to-peer mode of NFC that’s being utilized. NFC security measures are key here as this mode builds a secure network that can be used in any location safely and effectively.

What Are Contactless Payments?

Contactless payment uses digital tools to sell and pay for services in place of physical money such as notes or coins. This could be paying your rent via bank transfer, purchasing groceries using Apple Pay, or using an online payment platform to shop, all are a form of cashless payment.

Contactless payment is one form of transferring money using NFC to let readers wave their cards near to a receptor in order to make a payment. The ease of this, as well as the recent COVID-19 outbreak, has altered people’s spending habits. By April, the use of ATMs in the UK had fallen by about 60% with withdrawals in Switzerland being halved between mid-March and mid-April.

Meanwhile, in Canada, Greece, Ireland, Malta, Poland, and Turkey, Mastercard and Visa have actively worked with the governments to provide and encourage an improved touch-free experience ensuring it’s easier for businesses to receive a contactless payment. This allowed cardholders to purchase more of what they needed with a simple tap and avoided the need for any physical contact with either money or a PIN pad.

Final Thoughts

NFC payments after COVID-19 as well as all forms of contactless payment are set to stick around when the world returns to normality. They offer a much easier form of payment for customers and businesses alike while also helping to curb the spread of the virus further by significantly limiting the amount of physical content that occurs in relation to physical money. As more and more businesses become comfortable with the concept of NFC-based payments, the overall global shift towards a cashless society will only become a matter of time.