Near Field Communication: Pros and Cons

The Advantages and Disadvantages of NFC Payment

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Image © Tom Purves/Flickr.

February 06, 2014

NFC or Near Field Communication is now coming to the fore in the mobile device industry. It has been long since Google introduced its Wallet. Considering the ever-increasing user demand for NFC payment, Apple, which was so far against offering this service, is now reconsidering its stand. While the giant is in talks with experts to set up its exclusive payment business, users can now access NFC by way of using the new Incipio Cashwrap case for iPhone.

The giant is further rumored to be working with its Touch ID feature to build a more secure mobile payment system.

Will NFC payment emerge as the future of mobile? What are its advantages and disadvantages? In this post, we take a look at the pros and cons of this system of payment.

Advantages of NFC

  • Convenient: The convenience of payment is one of this system’s greatest advantages. NFC makes it very easy for users to make instant payment via their smartphones and tablets, using their mobile wallet. This process of payment is also simple to understand and use. It helps users perform financial transactions at the mere touch or tap of their screen.
  • Versatile: NFC is very versatile, in that it covers a range of different industries and services. This mode of payment can be used for the purposes of mobile banking, reserving restaurant seats and movie passes, booking train tickets, getting real-time updates on expenditure and reward points, redeeming rewards and coupons and much, much more.
  • Better User Experience: This system is beneficial for enterprises too – companies that readily adopt the latest technology are viewed by customers as being dynamic and progressive. Using this technology also helps them serve their customers better by presenting them with an easy and hassle-free mode of payment. Offering better user experience helps establishments enhance their own productivity and efficiency, thus enabling them to sustain customer loyalty, while also attracting newer customers
  • Seamless: NFC has been found beneficial in the academic arena as well. The high level of encryption enables institutions to employ it as a sort of a security system, which does an accurate ID on students entering and exiting the premises. Employees of companies use this technology to seamlessly interact in the office environment, sharing real-time information with each other.
  • More Secure: Using mobile wallets is, to an extent, safer than using physical credit cards. In the unfortunate event of theft of the mobile device, the user’s credit card information is password and PIN protected. This adds on an additional layer of safety. Also, NFC-enabled payment cards are built to be more secure than the magnetic strip of a regular credit card. While using this system of payment, retailers would have no physical access to customers’ credit card information.
  • Touch ID: The Future of Mobile Payment for Apple?

  • Mobile Payment: Advantages 

Disadvantages of NFC

  • Expensive: It may prove to be much too expensive for companies to adopt NFC-enabled technology; to purchase and maintain related machines and other equipment. While large and well-established companies such as Starbucks have successfully incorporated the technology within itself; the smaller companies could find it difficult to sustain their existing turnover and enhance profits. Installing the hardware and software and hiring technicians to maintain the same could result in spiraling expenses for the concerned company.
  • Not Advantageous Enough: Most of the latest smartphones and tablets are NFC-enabled. This should have encouraged retailers and B2B companies to readily adopt this system. However, due to cost issues and other complications, not many smaller and mid-sized companies are prepared to receive the latest technological developments. Unfortunately, these companies and retailers are at a disadvantage, as they stand to lose current customers looking for easier, more integrated and contactless methods of payment.
  • Lack of Security: While NFC transactions are undoubtedly more secure than regular credit card payments, this technology is not completely free from risk. Rapid evolution in technology always comes with an equally powerful negative consequence. Mobile phone hacking is now rampant and attackers are coming out with newer methods to gain unauthorized access into users’ personal, social security and financial data stored therein. This makes the entire system vulnerable and insecure. The obvious lack of security could discourage both users and companies from warming up to this technology in the near future. 
  • Apple’s Touch ID Comes under Scrutiny

  • Apple Pay Hit by Fraudsters