In the early 1980s, four of New York City’s largest major banks attempted to launch a new, innovative method of banking that would provide remote services to their customers. These remote services would give customers the ability to access and utilize the banks’ financial resources without leaving the comfort of their own homes. This new system, called “Online Banking,” promised to change the customers’ financial experience with amenities and perks they couldn’t find with the brick-and-mortar locations.
Consumers in the 1980s simply didn’t trust the security of online banking and electronic money transfers. The first consumers were apprehensive, if not afraid, to adopt online banking, leading to its initial failure. It took nearly twenty-years before the majority of consumers cashed in on the benefits and conveniences that online banking offers. Now, nearly thirty-five years after the birth of online banking, consumers are facing yet another innovative way of banking – contactless payments with Near Field Communication (NFC) devices.
As history tends to repeat itself, NFC Mobile Payments have consumers a little uneasy when it comes to trading in their credit and debit cards, checks, and cash for a completely virtual wallet. Once again they find themselves unfamiliar with the technology, concerned with security and, unfortunately, potentially missing out on years of improved convenience.
So, what is Near Field Communication (NFC)?
In short, Near Field Communication uses wireless, low-power communication chips to share information like payment between two devices. An example is Apple Pay. In detail, NFC is a set of communication technology standards and protocols that enables two electronic devices, such as Smartphones, to establish communication within close proximity of each other – typically within a range of 2 inches. The communication between devices occurs through an NFC chip built directly into the device that is activated by another, close-range NFC chip. This allows the flow of data between the devices, and the data being transferred can be secured with encryption.
There are two types of NFC devices, active and passive. Passive devices, such as NFC Tags in wristbands, only transmit information or send data to authorized devices. Active devices, such as smartphones, tablets, and wearable smart technology, have the ability to collect, modify, and/or exchange information and data with other compatible devices. Active devices contribute to the continued evolution of consumerism with mobile contactless payments.
NFC is deployed to over 70 countries around the world including Canada, China, France and Italy. As the availability of NFC Mobile Payment locations continue to grow so does the list of supported NFC devices. If you are using apps such as Apple Pay, Android Pay, or Samsung Pay, congratulations you are already using Near Field Communication technology and are part of the payment revolution. If you aren’t sure about your device or would like to obtain an NFC compatible device, NFC World provides one of the most current list of compatible devices with their NFC PHONE LIST site.
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