This is why small businesses should adopt near field communication for payments
Today’s consumers demand speed and simplicity in transactions – firms that don’t offer contactless payments risk being left behind explains Dmitry Leus
In our increasingly busy world, consumers demand faster and more efficient methods of doing everyday tasks.
Businesses that fail to keep up with the latest advances in technology risk being left behind and losing out on custom.
One such time-saving technology is contactless payments, which offers consumers the option to make simple, fast, and safe non-cash payments at checkout.
Dmitry Leus, an expert in corporate and financial management, investment and new technologies, explains the various contactless payments solutions available for businesses and what benefits the technology offers.
What is near field communication?
Near field communication is a technology of high-frequency wireless communication with a short range. It is based on radio-frequency identification (RFID) technology.
Recently, this technology has begun to occupy a leading position on the market of contactless payments. The number of bank cards that support NFS technology is growing in the world, and already now their share has passed 10%.
In 2018, a two-fold increase in the NFS payments market is predicted in relation to the level of 2014, equating to a total volume of $10bn.
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Whilst it is a well-established technology, Bluetooth has a number of significant drawbacks when it comes to making contactless payments.
It takes longer and has a higher level of vulnerability due to the risk of signal interception, meaning customer payments are less secure.
On the flipside, Bluetooth has a longer range than NFC and can be used for multiple transactions at once.
QR-code and ultrasound
QR-code and ultrasound technology are most actively used in Asian countries (Japan, Korea). In India the most popular mobile wallet of the country Paytm is going to launch a new payment service Sound Pay based on ultrasound.
If the technology proves popular, the system can be implemented in outlets throughout the country. India already has a financial start-up Ultracash, which allows you to send and receive payments and money transfers from your mobile phone through ultrasound.
What are the prospects for the development of near field communication?
Around the world, NFC technology has seen the largest uptake as a method of mobile communication. with the mass application of this technology in many different areas including: public transport, medicine, vending business, and municipal and private taxi services.
The introduction of the use of the technology itself requires massive capital expenditure and investment, and many countries (the US, Canada, China) are investing in its development and popularisation.
Moreover, for activation and mass launch of this technology, many companies and providers offer a grace period for the use of the service, or give the opportunity to use it for free. Generally, providers monetise their NFC-services by taking a commission from each transaction.
Using NFC for business is an effective way of getting ahead of competitors, allowing you to make purchases without leaving the internet or even moving from your seat. Faster, secure payments mean you can process more transactions and, ultimately, serve more customers. In addition, customers are more likely to make the decision to buy something if the means of payment is efficient.
In conclusion: things are moving fast in the world of electronic payments and the non-contact segment, and small businesses should adopt contactless payments to ensure they are in step with consumer trends.