What are near-field communication (NFC) payments?

If you’ve ever used your Capital One contactless credit card at a store or waved your phone over a digital reader to pay for a bus ride, you’ve made an NFC payment. NFC, which is short for near-field communication, is the technology that makes these contactless payments possible.

Keep reading to learn more about what NFC payments are and how they work.

Key takeaways

• NFC uses radio waves to send information between two devices that are close together.

• Digital wallets and contactless cards use NFC to send encrypted payment information to a merchant’s point-of-sale system.

• NFC-enabled devices, such as smartphones and smartwatches, can also send and receive information from one another directly without using a reader.

NFC is a specific type of radio frequency identification technology designed to work over very short distances. NFC allows two devices to communicate with each other using electromagnetic radio fields. When two NFC-enabled devices—such as smartphones, tablets, smartwatches or contactless card readers—are near one another, they can send and receive information, such as payment details.

To make a payment using NFC, your device or card must be very close to the payment reader—usually within one or two inches—with no barriers in between.

This close proximity requirement helps make NFC payments secure since it lessens the risk of scammers getting close enough to your device to intercept its information. 

NFC technology has an ever-increasing range of applications, including, but not limited to, the transmission of payment information. Here are a few examples of how NFC functionality is being used today:

Contactless credit and debit cards are equipped with an NFC chip that can transmit encrypted card information. This chip allows you to tap to pay with your Capital One card at retailers accepting contactless payments. This includes stores and other places that use digital payment readers, such as train and bus terminals.

NFC technology also makes it possible to pay with your phone at stores that accept mobile wallet payments, such as Apple Pay®, Google Pay™ and Samsung Pay®. You use an NFC-enabled mobile device at checkout the same way you’d use a contactless card: by holding it very close to the payment terminal to allow the chips to communicate with one another.

While making NFC payments in stores typically requires an NFC-enabled reader, NFC devices can also operate in peer-to-peer (P2P) mode, which allows the devices to communicate with one another directly. This lets users exchange information such as games, links and other data by holding their phones close together.

It also allows users to make P2P payments with certain digital wallet apps, such as PayPal®, by simply touching their phones.

As mentioned already, NFC payments require an extremely close, unobstructed connection to exchange information, so it would be very difficult for you to send your payment information unintentionally. What’s more, many payment apps also require an added layer of authentication, such as using Apple’s Face ID or typing in a passcode, when you’re making a payment. 

Like most digital payment methods, NFC transactions use tokenization to mask your personal information, including your actual card number, which adds an additional layer of security. And since you don’t need to swipe or insert your Capital One card when you make NFC payments, you’re less likely to have your information compromised by a card skimmer. This may make NFC payments more secure than using a traditional card with a magnetic stripe or even an EMV chip card.

NFC is the invisible force behind many contactless payment options available today. And NFC payments can be a convenient way to use your phone to pay for things in person without exposing your credit card number or even taking out your wallet.

If you’re ready to get started making fast, easy payments with your phone or wearable device, explore digital wallets and add your Capital One card as your preferred payment option.