What is Near Field Communication and How it is Revolutionizing the Finance Sector?

Introduction 

Ever since the banking and financial sectors adopted digital transformation, the communication, and infrastructure between these organizations and their customers have been evolving at a rapid pace. The introduction of bank cards, such as debit cards, credit cards, etc, has completely revolutionized the industry and lowered the stress levels related to carrying cash. Nowadays, from email to e-banking to customized banking and UPI apps, we’re expanding the use of mobile devices that assists us to manage our day-to-day transactions and accounting. 

Smartphones have turned out to be almost a necessity today. So it’s not a big surprise that NFC (Near Field Communication) mobile payments- paying via your smartphones are gaining the heat. Over the last couple of years and especially during the pandemic, NFC has become more prominent in the payment industry than ever before, since it enables contactless payments through mobile wallets like Apple Pay, Google Pay, PayPal, etc.

What is Near-Field Communication? 

Near field communication (NFC) is the kind of technology that lets two devices, (for example like your phone and a payments terminal) interface with each other when they are near each other. It is the technology that facilitates contactless payments. It is also defined as the system of wireless data transfer enabling smartphones, laptops, and other devices to share information when in close proximity. 

NFC technology was developed in the early 2000s. It uses a specific RFID frequency (13.56MHz, to be precise) for close-range communications. In an NFC payment, you just need to tap or hover your smartphone or other devices to pay. Almost all sorts of transactions can be executed through NFC chip-tag, files, payments, media transfer, etc. NFC has played a major role in the pandemic as it helped customers and companies by enabling contactless payments in this difficult time. Near-field communication is on the rise and it’s only expecting to go uphill from here on. 

Benefits of Near Field Communication

When we take a look at the benefits of Near Field Communication (NFC), there are quite a few. They are-

  • With the help of wallet apps, it is rather convenient to conduct payments and other transactions using smartphones or other devices. It allows easy and contactless payments.
  • It is used for multiple applications on various platforms, such as banking, booking tickets, reservations, redeeming, etc. 
  • It aids both customers and enterprises.
  • Another benefit that near-field communication provides is that it enables secured access for students and employees in their premises. 
  • When compared to magnetic strip-based debit and credit cards, NFC provides more security. It also utilizes PIN. 
  • For NFC, no special software is needed. And further, it also doesn’t require any manual configurations and settings. 
  • Like Bluetooth and other methods to build connectivity, NFC doesn’t require a search and pair procedure. 
  • NFC mobile payments are dynamically encrypted as it proffers them one of the safest ways to pay. 
  • NFC is compatible with existing RFID networks.

How does NFC Revolutionize the Finance Sector?

If there’s a sector or an industry that NFC has affected the most, it would be the finance sector and the banking industry respectively. NFC has made a huge impact in the finance sector as it renders many pros. We can even say that it has revolutionized the finance sector completely as a whole.

  • Encryption and Security–  the data transferred during NFC payments are end-to-end encrypted. Finance sectors utilize NFC as it provides them top-notch security. 
  • Asset Security- With the help of storage facilities, NFC tags at offices, and separate rooms, it guarantees that the security panel constantly checks each area while patrolling.
  • Asset Return– NFC enables innovative ways to assure that the item obtained from the asset store is returned or not. NFC helps to manage asset returns efficiently for finance sectors. 
  • Seamless– Advanced level of NFC encryption allows the finance sectors and enterprises to employ it as a sort of security system as it will provide an updated accurate ID for employees and people entering and exiting the premises. 
  • Much Improved Productivity– Another good benefit of how NFC is enhancing the finance sector is by improving its overall productivity. They do that by generating more revenue as it conceivably drags more customers, which results in the strengthening of the company and boosting productivity. 
  • Secure– And last but not least, NFC secures all the transactions made by the finance sector using encrypted codes. 

Conclusion

NFC or Near Field Communication is regarded as one of the most interesting types of technology today. It offers the possibility to modify the whole payment system, including changing the whole scenario for mobile app development services and other modes of technology the new tech world has to offer. NFC helps in eliminating different problems like long duration of connection establishment, high power consumption, and difficult configuration. 

Author bio: Feril Mohammed Hazem is an industry expert and a professional writer working at ThinkPalm Technologies. He has a keen interest in AI. He is fascinated by futuristic technology and its ways. Off the screen, he is a movie buff, likes playing basketball and listening to music. 

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