With its Apple Pay product, Apple is kick-starting the scan vs. swipe revolution that credit card and mobile wallet companies have been trying to usher in over the past few years. Scanning, which allows brick-and-mortar businesses to be more competitive with ecommerce ones, was made possible through the development of near field communication (NFC)—a technology that allows two devices to communicate and exchange information with one another wirelessly.
Stores and businesses equipped with NFC technology can scan a customer’s card or smartphone for payment instead of swiping their credit card through POS systems. So how do NFC payments benefit you and why are merchant services companies promoting it?
Ease of Use
NFC is easy for both retailers and customers to use. Set up and installation is simple and your merchant services provider can answer any questions you have. Consumers simply scan their credit card or smartphone for payment. For smartphone users, there’s the extra benefit of not having to carry multiple store and credit cards in their wallets. They can pre-load all payment information to a mobile wallet app on their smartphone.
Cost Reduction
Businesses that want to offer NFC payments as an alternative to traditional credit card processing will have a one-time cost of purchasing the readers. Readers are reasonably priced and can be obtained from your merchant services company. Reduced paper product use will save you money and attract customers who prefer to do business with environmentally conscious companies. Aside from the purchase of the reader, NFC payments can cost you less annually than standard credit card processing.
Payment Processing on the Go
Since there are no paper receipts requiring signature, payment processing via NFC is much faster. Businesses equipped with NFC readers can handle more customers in a day than those with standard POS systems. Customers who like the ease of online payments will be drawn to businesses that offer self-service NFC readers at their checkouts. Service professionals and salesman in the field who have mobile merchant accounts can also take advantage of NFC.
Advertising and In-Store Marketing
NFC lets customers quickly and easily redeem coupons and gift cards, and add to loyalty reward programs—benefits that are unavailable with traditional credit card processing. Besides these wins for customers, you can use NFC to offer discounts for and promote your products and services. Retailers can also take advantage of NFC’s in-store marketing capabilities. As customers near certain products or areas in a store, NFC can send targeted coupons or product information to their mobile devices. Through various mobile programs and apps, customers can trade discounts and offers with other users.
Improved Security
Magnetic stripe readers are subject to counterfeit cards and skimming. Enhanced security technology that can eliminate these types of fraud is compatible with NFC’s wireless communication, but not with magnetic stripe readers. Reduced fraud means fewer chargebacks and more profits for merchants.
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