POS & Hardware4 min read

What Is NFC?

NFC (Near Field Communication) is short-range wireless communication used in many contactless payment interactions. NFC is the communication technology; the payment transaction is authorized by the payment network and processor, not by NFC itself.

By ONKORE Payment Solutions

Direct Answer

NFC (Near Field Communication) is a short-range wireless communication technology used in many contactless payment interactions. It lets a contactless card or device and a compatible terminal exchange data over a few centimeters. NFC is the communication technology; the payment itself is authorized by the payment network and processor, not by NFC.

How It Works

When a contactless card or NFC-enabled phone is held near a contactless terminal, the two exchange encrypted data over a short range using NFC. The terminal then sends that data to the processor for authorization through the payment network. NFC is the communication layer; the payment application and network transaction run on top of it. Not all contactless technology is identical, and NFC payment support depends on the card, device, terminal, and region.

Key Points

NFC is the underlying communication technology, not the payment experience or the payment processor.
It powers contactless cards and mobile wallets such as Apple Pay and Google Pay.
It requires a terminal with a contactless (NFC) reader.
NFC payments are typically tokenized, which can reduce exposure to cardholder data.
Availability of NFC payment functionality varies by device, card, terminal, and region.

What Merchants Should Know

Accepting NFC requires contactless-capable hardware. NFC payments are generally tokenized, which can reduce your cardholder-data exposure, but NFC itself does not process or guarantee a payment. NFC is distinct from — but enables — the "tap to pay" experience.