This article content is provided with our sponsor, Bank of America Merchant Services.

Due to recent advances in technology, the world of retail is undergoing yet another change. With the rise of digital payment systems such as Apple Pay®1 and Android Pay™2, NFC-based transactions will play a big role in the future of commerce in America3. Here’s a primer on NFC, along with a few reasons why merchants will want to invest in the emerging payment method.


What is NFC?

NFC stands for near-field communication, which is a shortwave radio standard used in a number of mobile payment systems such as Apple PayAndroid Pay and Samsung Pay®4. Owners of NFC-enabled smartphones can use mobile payment systems to make purchases at virtually any business that has a point-of-sale system with an NFC reader.


What are mobile payment systems?

Mobile payment systems, also referred to as digital wallet services, are applications that allow users to make payments using accounts they maintain with their preferred financial institution without the use of a credit card or check. The apps effectively emulate a payment card in order to complete a contactless transaction with an NFC reader.


Why should I accept mobile payments?

By 2017, it’s estimated that cash will only account for 23 percent4 of all point-of-sale transactions made in the US. Additionally, transaction use in mobile payment systems have increased by 118 percent5 over the last five years, and one 2015 study found that 28 percent6 of all smartphone users made at least one mobile payment transaction within the past year. As such, small business owners should take steps to modernize their POS systems in order to keep up with changes in consumer behavior. Those that failed to do so risk losing business to competitors that place a premium on customer satisfaction.


Are mobile payments just a fad?

Bank of America Merchant Services Senior Vice President of Industry Solutions and Platforms Derrick Carpenter notes that NFC is one of a few emerging technologies that are driving the development of commerce in the United States. “NFC is one of the key cornerstone technologies that will usher in the mobile payments and a new customer experience. Business owners should be looking for solutions that take into account NFC, Bluetooth™ and barcode reading technology. As the mobile experience continues to mature, we expect that many more solutions and technologies will be driven by these communication standards. Apple Pay, Android Pay and many other key technologies are in market today using NFC, and that is why we feel this is important to prepare your business to accept this method of payment.”


How long does it take to complete an NFC-enabled transaction?

Mobile payment system transactions can be completed incredibly quickly. On average7, a cash transaction takes 34 seconds to complete; online transactions take 30 seconds, and payment card transactions involving a PIN take 24 seconds. By contrast, mobile payments only take 12 seconds8 to complete.


Are NFC readers expensive?

The cost of an NFC reader varies by manufacturer, but many well-reviewed units can be purchased for under $200. However, since financial institutions operating in the United States adopted the EMV payment card processing standard9, owners may wish to purchase a new point-of-sale system10 that allows them to accept cash, checks, magnetic strip and chipped payment cards, as well as NFC-enabled mobile payments.



1 Apple Pay®. [] Apple Pay is a trademark of Apple Inc., registered in the U.S. and other countries.

2 Android Pay. [] Android Pay is a trademark of Google Inc.

3 “The Ultimate Guide to Accepting Mobile Payments,” Merchant Maverick. []

4 Samsung Pay®. [] Samsung Pay® is a registered trademark of Samsung Electronics Co., Ltd.

5 “Mobile Is The Future Of Payments — Here’s How Much Runway There Is For Growth,” Business Insider. []

6 “Mobile payment statistics,” Credit []

7 “Contactless payments: Time to wave goodbye to cash,” The Guardian. []

8 “Retailers to accept ‘mobile’ payments next year,” The Telegraph. []

9 “Tech Talk: How Does EMV Work?,” CBS Pulse. []

10 Bank of America Merchant Services. []


This article was written by Mario McKellop for Small Business Pulse



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