In the modern digital age, a question had formed over the years, how many people use a card to pay for everything, and how many people use cash? The first cash register was invented on January 30th, 1883 by James Ritty—a saloon keeper. He nicknamed it the “incorruptible cashier”, Ritty was being cute for sure, but little did he know that dishonesty and fraud were going to be around for another 100+ years at the very least. Payment processing wasn’t even a thing, people just handed you money and that was it. Occasionally somebody would smudge some numbers on a primitive excel sheet somewhere and get tried for it, but that is neither here nor there. While everyone was discussing how cards are the future, a little thing called NFC payments snuck their way into the collective mainstream.
NFC stands for Near Field Communications. It is a technology that allows two devices to speak to one another when nearby. I’m sure you can see where this is going, one of those devices is your phone and the other is a payment terminal. NFC is a subset technology of the age-old RFID (Radio Frequency Identification), which is used in many different things including but not limited to scanning items at a grocery store, tracking items in the logistics industry, keeping track of luggage at airports, etc.
NFC has been around since about 2003 or so, but it really didn’t gain as much traction until the smartphone boom after the first iPhone was released in 2007. A mere 12 years later, the level of connectivity has skyrocketed to unprecedented and unforeseen levels. In the case of NFC, there are currently around 2 billion NFC enabled devices active in the world. Clearly, the market is already prepped to utilize NFC technology on a greater level than just niche application usage. Analysts are predicting that the NFC market will grow by 17.9 percent over the next decade.
Consider this, NFC is near field communication—meaning the technology is an RFID frequency that is only effective in close contact. This concept pretty much demands that the person utilizing it be within close range and more simply put, present. It’s a funny concept after a good 10 years of businesses and technology companies proselytizing the wonders of not having to get up off of your couch to do anything. Why shop when you can order something on Amazon and get it within the next 2 days? You can call a taxi on your phone, you can order all of your groceries and have them delivered to your front door—you can even subscribe to full-on meal programs that send you all the stuff to cook a certain meal. You might not even have to do that much.
I digress, but the point is that the central theme of our prior decade of technological innovation is that you can do less and get more. For this reason, many spelled the doom of brick and mortar stores. Why go to a store when you can order online and for cheaper in many cases? Brick and mortar had nowhere to go…until stores started using omnichannel marketing techniques to seamlessly blend the online shopping experience with the in-store one. Site to store shipping was just the beginning of these changes.
Millennials and Gen Z by extension prefer experiences to material things according to a study by Harris Group. It’s no surprise then that retailers are constantly trying to craft innovative ways in which they can merge technology to create more engrossing shopping experiences. NFC is the next up in the toolbelt of businesses around the world. The uses are all over the place such as being able to access product information through NFC tags or products having tags that can redirect you to the retailer’s ecommerce page if the product is out of stock or not in the size you require.
Contactless payments are one of those subtle innovations that make the brick and mortar experience a lot more modern feeling and novel. Unlike many novelties, however, contactless payments are truly convenient and have a practical edge to them as well. These types of payments are powered by NFC as well. You simply use an app such as Apple Pay or Samsung Pay which are widely available and utilize NFC to make payments. Many people are still hesitant to use apps to pay for things due to concerns about safety, but those are unfounded. The truth is, NFC payments are far more secure than something outdated like magnetic strip technologies which are still used in some places and are also a fallback in case chip-reading is not working. Although, businesses would do well to remember that fraud liability rests on their shoulders if the fraudulent activity was due to processing through strip vs EMV.
Payments made electronically through your phone are quite safe because the payments must be authenticated to pass through for processing. When using contactless payments, the stored data is encrypted which makes it incredibly difficult to hack—even if it could be hacked, it simply would not be worth the effort for most evil-doers. Hackers tend to aim for bigger prizes if that much effort is required.
You might be concerned that your phone has all of your credit card information stored and if you were to lose it then it would be the equivalent of losing your cards.
If you’re really dead-set on not using your smartphone for payments out of fear or simply do not wish to have that information stored on your phone, there’s good news! You can obtain something called a contactless payment card. Like using the NFC features on your phone to pay, there are cards that are equipped with NFC technology so that the card owner can simply tap or wave their card above the NFC reader and it will go through.
At Pinpoint Payments, we’ve got all of your mobile and wireless payment processing solutions covered. While we discussed in this article how brick and mortar may not be doomed after all, that doesn’t mean that business in the last decade hasn’t shifted to become more fluid and on the go.
This flexibility is especially important for startups or new small businesses. The low start-up costs of mobile card readers allow many new and ambitious business owners to hit the ground running by being able to accept credit cards off the bat! We even offer a mobile printer add on so that customers who still favor paper records can walk away feeling good about the transaction.
If you want to start accepting more business by accepting more modern payment methods, apply here. If you have any questions about our services or POS systems we offer, feel free to contact us here!