NFC
Also known as: Contactless, Near-field communication
The short-range wireless tech behind tap-to-pay cards and mobile wallets.
NFC (near-field communication) lets a card or phone communicate with a terminal by tapping, powering contactless payments and digital wallets like Apple Pay and Google Pay. It's fast, and combined with tokenization it's more secure than a swipe.
How it works
Hold a card near the reader and the terminal's own field powers the antenna inside it. That is the whole trick, and it works over an inch or two. Nothing exotic crosses the gap. What runs over the link is the same EMV exchange a chip dip uses: a one-time cryptogram from the card or phone, verified by the issuer. A phone adds a layer on top, presenting a device token rather than the real card number and using a fingerprint or face check as cardholder verification.
For pricing, a tap is a card-present sale. Most US processors charge the same rate for it as for a dip, taps from a phone wallet included, so contactless should not show up as a separate line on your statement. What you buy is time at the counter, which matters when there is a queue, and no cards left behind in the chip slot. Almost any reader sold in recent years supports it.
There is a ceiling on it. Above an amount each network and country sets, the cardholder has to be verified, and the terminal asks for a PIN or a signature; a wallet payment approved by biometric usually passes without one. Then check the category on your statement. If tapped sales are billed at a keyed-in or card-not-present rate, something is misconfigured in the terminal or your account, and the gap is worth chasing.
Worked example
Four seconds a sale sounds like nothing. A cafe taking 400 card sales a day gets close to half an hour of counter time back, because a chip dip ties up the terminal for several seconds while the card sits in the slot and a tap clears in about one. And it costs nothing extra: a contactless sale is card-present, in the same interchange category as the dip it replaced.
Frequently asked questions
- Does accepting contactless cost more than chip payments?
- Most US processors price a tap exactly like a chip dip, because both are card-present transactions and take card-present interchange. That includes taps from Apple Pay and Google Pay. If contactless or wallet volume shows up on your statement at a higher rate than chip volume, ask your provider which category it was billed under.
- Is there a maximum amount a customer can tap?
- Each card network sets a ceiling, above which the cardholder has to be verified and the terminal asks for a PIN or a signature. The limit varies by network and country, and it has risen over the years. Payments from a phone wallet usually clear it without a prompt, because the device already verified the customer with a biometric.
- Do I need to buy a new terminal to accept NFC?
- Probably not. Card readers sold in recent years handle chip, tap and swipe in one device, marked with the contactless wave symbol. If yours predates contactless, replacing it usually costs less than the sales you lose to customers carrying only a phone. Ask your processor before you buy, because some may swap the hardware at no charge, particularly at contract renewal.