NFC as a standard in the payment industry

Published: 30 June 2020 y., Tuesday

It is impossible to imagine our life these days without contactless authorization. We use it when shopping, paying for public transport or entering buildings with access control. Сontactless authorization has already become a standard for payment devices. According to international payment systems, in 2020 more than 40% of payment cards in the world support contactless payment, about 70 million people regularly make contactless payments.

NFC technology was introduced in the early 2000s. Now it is used to enable contactless authorization on banking self-service devices.

NFC (Near Field Communication) is a set of protokols for wireless data transfer between different devices within a radius of 10 centimeters. NFC technology provides the contactless authorization and contactless payments both at ATMs and POS terminals and gives a number of advantages both for banks and their customers.

  • You save your time, because contactless authorization is faster than classic card reader authorization.
  • You can use not only a payment card, but also other devices (mobile phone, special sticker, various gadgets) when paying.
  • You do not need to have a card with you everywhere.

The growing popularity of NFC technology is also indicated by the number of devices and institutions using this technology. Large American banks began to actively develop this functionality on their self-service devices back in 2016. For example, at the beginning of 2016, one of the world's largest international financial companies, Wells Fargo, reported about 1,700 ATMs in the United States that provided cardless authorization using NFC technology, but by the end of the year Wells Fargo had increased its number to 5,000. Bank of America has significantly increased the number of ATMs supporting contactless transactions to 8,000 devices in 2016-2017 as well. As a result of implementing NFC, Bank of America’s ATMs support Apple Pay, Android Pay, Samsung Pay and Microsoft Wallet and its customers can select the payment card in the mobile phone application when paying. So, the use of NFC expands the possibilities of authorization, allows banks to develop the functionality of ATMs and attract new customers.

Financial institutions may find it difficult to choose a correct NFC reader because of the specifics associated with its installation, connection and interoperability with the existing ATM fleet. The various features of ATM software and the specifics of payment process certification may also affect the choice of the NFC device.

BS/2 provides services in the introduction of contactless authorization technologies at ATMs, kiosks and other self-service devices.

What do we offer

  • The physical banking self-service channel infrastructure analysis
  • Consultation on NFC-readers choosing and certification
  • NFC-readers installation
  • NFC solution and ATM software integration
  • Design and implementation of ATM contactless authorization user scenarios

You can learn more about NFC at ATMs and our experience of NFC implementation in Blue Orange Bank (Latvia) here.

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