Near Field Communication (NFC) is a very short-range wireless technology that allows transmission of data from one device to another. In order for this to occur, an NFC chip must be installed in both devices. Cell phone manufacturers are starting to include NFC chips in most new Smartphone models.

How would you use NFC with your Smartphone? One is example would be for credit and debit transactions. First your account information is uploaded onto your NFC enabled Smartphone and then you pay by simply tapping your Smartphone on the NFC terminal at checkout. Many industry leaders are predicting that eventually this technology will make wallets obsolete. Physical cards such as Driver’s Licenses, transit cards, and store loyalty cards will be stored on your Smartphone and will only be a tap away.

We’re already starting to see the implementation of this technology. In New York City, MasterCard® and CVS Pharmacy® have started using a NFC technology known as Google Wallet. Consumers can pay with MasterCard using a NFC terminal at the register of any CVS in NYC. It looks like a trend that will catch on across the country and small businesses should start thinking about how they can jump on the bandwagon.

There are some security concerns such as the fear of electronic wallets becoming easy targets for hackers. However, both the sending and receiving devices must be NFC enabled and both devices have to be within centimeters of each other in order for the information to be transferred. As the technology gains momentum, manufacturers are sure to come up with security enhancements to ease the minds of consumers.
 
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