NFC technology powers contactless transactions through radio frequency identification (RFID). This RFID technology has already been in use for years when scanning groceries or tracking packages, for example.
The NFC used in contactless transactions is a specific radio frequency that enables the device or card to communicate with the payment reader when in close proximity (usually a maximum of 10 centimeters). This mobile POS technology allows cardholders to tap or hover their smartphones or credit cards over a payment device, rather than manually swiping or inserting into a chip reader.
Some of the most widely used forms of contactless payments include the following.
This technology works on a few different devices, including the iPhone 6 and 6 Plus, as well as the Apple Watch. The fingerprint technology - Touch ID - ensures that payment information remains secure. When the light on the payment reader turns on, a buyer simply confirms their identity using the Touch ID then holds the device to the reader to complete the payment.
Enabled on the more recent versions of Samsung Galaxy devices, Samsung Pay is another simple contactless payment. Buyers can swipe up from the home screen to access the payment portal when in close proximity to the card reader.
Google's mobile wallet technology is called Android Pay and is enabled on all Android devices of version 4.4 or later. After securely unlocking the device, users can open the app on the phone then hold the device to the payment reader to complete the transaction.
EMV chip cards are issued by financial institutions as debit or credit cards. They are more secure than regular magnetic stripe cards as the information on the chip is always changing, making the financial data difficult to isolate and clone for a new card.