7 myths about NFC technology

[Carding Forum]

Have you heard about NFC technology, or are you actively using it? We are in a hurry to dispel popular myths associated with this technology.

NFC technology is gaining popularity.

Near Field Communication (NFC) technology has become quite widespread in the past few years. You can use a smart card with a built-in NFC chip as a transport pass, as a payment card to pay for purchases, as a contactless key card. Today, many major manufacturers are equipping their smartphones and tablets with NFC technology. Therefore, it is not surprising that many experts predict a surge in the popularity of mobile solutions based on this technology. Gemalto, an international provider of digital security solutions, has commented on 7 popular NFC myths.

Myth 1: Consumers are not willing to pay with their mobile phone.​

There is a certain paradox regarding NFC-enabled mobile devices. On the one hand, many market reviews clearly show that consumers are reluctant to pay with their smartphones. The main reason for this, they say, is lack of security. Also, users fear the loss or theft of the phone. On the other hand, those who have already tested NFC payments are delighted with this feature. According to Gemalto, many of the company's partners around the world, after the launch of NFC solutions, note a high level of customer satisfaction (up to 90%), thanks to a variety of loyalty programs, bonuses, etc. Thus, according to experts, the main task for financial institutions is to educate consumers on the basics of the security of the NFC payment system.

Myth 2: Mobile payment using NFC technology is not secure.​

Mobile payment using NFC and secure elements (such as embedded chips and SIM cards) is as secure as paying with a bank card. The NFC mobile payment operation uses the same logical and physical security mechanisms that are used for contactless cards.

Main security features of mobile NFC:

• to confirm transactions, consumers can choose the option to enter a PIN in the app, even for very small transactions, so they control all transactions;
• remote control platforms can instantly block any payment application, just like banks block payment cards;
• Recently, the trend of mobile wallets developed by issuers based on Host Card Emulation (HCE) technology has been developing. These mobile wallets generate one-time tokens (like a card number) that are required for a one-time transaction.

Myth 3: If my phone is lost or stolen, I will not be able to block my accounts.​

This is not true. In fact, the process of blocking a mobile wallet is quite simple. First of all, if your phone has a PIN, no one can use it. However, you can always ask your mobile wallet provider to block all your apps.

Possibilities of using NFC-enabled devices.

Myth 4: NFC technology is not mature enough.​

In fact, the NFC ecosystem is constantly growing. More and more smartphones support this functionality. According to a Juniper Research report, the total number of NFC-enabled smartphones will increase from 740 million devices at the end of 2015 to 3.9 billion in 2020. Users often use NFC technology when visiting various events (ticket confirmation), when boarding airplanes, when traveling in transport.

Myth 5: If I had an NFC-enabled smartphone, I wouldn't be able to use it anywhere.​

According to the same Juniper Research report, at the end of 2015, there were 68.5 million POS terminals worldwide that support contactless payments, up 8.1% from the previous year. Giants such as Apple and Samsung have also entered the world of NFC payments with their Apple Pay and Samsung Pay solutions. In many large cities, the infrastructure for NFC payments is developing in the transport system. In addition to cards, users can use their mobile devices to pay for travel. In London, in many cities of Spain, as well as in Kiev, you can use transport without cash.

Myth 6: In 10 years, mobile wallets will replace cash and cards.​

It's hard to imagine what the market will look like in 10 years, but it is clear that NFC-enabled smartphones and contactless cards will coexist. Mobile payment is intended more for small-value transactions and may gradually replace cash, which still accounts for about 80% of transactions. Moreover, there are more and more solutions from mobile operators and smartphone manufacturers, this contributes to the growing popularity of mobile payments. We can only hope that mobile wallets and contactless cards will push cash and other traditional payment methods into the market.

Myth 7: Mobile NFC systems: I've heard about this, but it sounds unrealistic yet.​

NFC technology is already used in 70 countries around the world, including France, Spain, Germany, Italy, the Netherlands, Poland, Canada, Japan, China, Singapore, Ukraine. Users need convenience and security, which is exactly what NFC technology provides.

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Even before the end of this 2016, according to various forecasts, NFC will support more than half (52.4%) of all smartphones sold. And the number of users of NFC payments will reach 148 million people.