Payment Card Emulation in Near Field Communications
As many services in the United States are now rolling out pay by smart phone processing, merchants have been asking about how they can accept these transactions. Essentially, a terminal needs to have a NFC-capable encrypted contactless card reader in order to enable the pay-by-phone model. Near Field Communication is a method of transmitting data built specifically for short range RF wireless communication. Typical distance for near field communications is maxed out around 40 milimeters – most technical doucmentation indicates that the smartphone should be ‘tapped’ on the receiver pad. In this payment model, the NFC device works in Card Emulation mode, acting in a manner similar to a regular contactless card.
The consumer’s adoption of this model is dependent on actions taken to enable it. The purchase of a smart phone and the loading of a payment application must be completed beforehand. Once the application is loaded, the consumer’s card information is securely loaded onto the phone. Point of Sale operators need to be able to explain this to consumers – many own smart phones and may be interested in using mobile payments, but are not aware that the phone must be set up before they are available.
Quick serve food and retailers are the obvious adopters of the smart phone payment technology. By acquiring and setting up a consumer facing terminal capable of near field communication, the technology is immediately available to customers. Most of the current payment terminals also offer traditional swipe and keyed transactions as well, in order to facilitate failures and backward compatibility. A secure pin pad is also part of the terminal, allowing the user to enter a pin number that identifies the phone’s owner.