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Everything You Need to Know About NFC Mobile Payments
Digital wallets are quickly gaining in popularity. Learn the ins and outs of NFC payments to determine if your business should start accepting digital payments.
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When a customer wants to pay you, accepting their preferred payment method increases their satisfaction and can boost your bottom line. In particular, digital payment methods are growing in popularity because of their ease of use and convenience. Near-field communication (NFC) mobile payments are a type of digital payment rapidly gaining adoption among consumers of all ages. We’ll explain what NFC mobile payments are, their pros and cons, and everything else retailers need to know to incorporate this increasingly widespread payment option.
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What is an NFC mobile payment?
An NFC payment is a contactless payment made using NFC technology via a smartphone, smartwatch, or NFC-enabled credit or debit card. This technology supports wireless communication between the NFC-enabled card or device and a merchant’s payment terminal or other payment hardware.
Customers use NFC payment technology via the following methods:
- NFC-enabled cards: If you have a credit card with a contactless payment symbol (which looks like a signal), it has NFC capability. You can use it to pay just by tapping it on a compatible card reader.
- Digital wallets: A digital wallet, or mobile wallet, is a mobile app that stores payment methods, such as credit cards, digitally. Consumers with digital wallets on their smartphones can complete NFC mobile payments by simply holding their device near a payment terminal displaying the NFC symbol.
Digital wallets are the primary driver of NFC mobile payments. According to Statista, mobile wallets accounted for about half of all global purchases — in-person and online — in 2023. Additionally, according to the 2025 Commerce and Payment Trends Report, 60 percent of the global population is expected to use digital wallets by 2026.
How does an NFC payment work?
NFC technology takes advantage of the radio frequency waves already used by mobile phones. These waves only work at close distances — typically within about 1.5 inches (about four centimeters) from the NFC-enabled device or card to a reader or payment terminal. This practice ensures a customer does not unwittingly pay for someone else’s purchase, providing an added layer of security.
- NFC-enabled card payments: NFC-enabled cards work similarly to traditional credit cards. But, instead of swiping or inserting them, you simply hold or tap them near a compatible reader.
- NFC payments via a digital wallet: To make an NFC mobile payment via a digital wallet, users first enter their bank account or credit or debit card information into the wallet app of their choice (e.g., Apple Pay, Google Wallet). The mobile wallet then encrypts the payment details and stores the data on the provider’s server, not the customer’s mobile device. When they are ready to make a purchase, they only need to hold their mobile device near the reader (or double-click the button on the right side of an iPhone, in the case of Apple Pay); these actions will initiate the payment within seconds.
Are NFC mobile payments secure?
NFC payments are wireless, which may make some people uncomfortable about the security of their payment details. However, these payment types are considered safer than magnetic stripe cards. Plus, they offer about the same level of security as EMV (chip) cards because they use tokenization and dynamic encryption. Here’s how it works:
- Each time a customer pays using NFC, the system assigns a unique, randomly generated string of numbers and letters. They instruct the merchant services provider on how to access funds for the transaction.
- Each transaction generates a one-time code. So, it is nearly impossible to decode and cannot be reused for future purchases — even if it were somehow deciphered.
- From a customer’s point of view, NFC mobile payments provide an extra layer of security; they require a unique login and password or biometric authentication, such as Apple’s Face ID. This means that even if a customer loses their phone, the NFC payment data remains inaccessible.
Still, Brittany Allen, senior trust and safety architect at Sift, emphasized that, like all payment methods, NFC mobile payments carry some potential risk for consumers.
“For example, a fraudster may be able to access someone’s payment data if the terminal isn’t properly encrypted,” Allen explained. “Lost or stolen NFC-enabled devices like smartphones also pose a risk, especially if not secured with strong authentication like PIN codes or biometrics.” Malicious apps that contain malware or fraudulent links that lead to phishing attacks are other potential risks.
Allen stressed the importance of secure payment terminals and cybersecurity best practices. “Equally important is having robust fraud detection systems in place to identify unusual transaction patterns and other suspicious activity before any data is compromised,” Allen added.
What are the pros and cons of accepting NFC payments?
Consider the following pros and cons when deciding whether to accept NFC mobile payments at your business.
Pros of accepting NFC payments
- Are highly secure, thanks to encryption and tokenization.
- Enable fast and seamless transactions.
- Are convenient for customers, reducing the need for cash or physical cards.
- Allow retailers and restaurants to quickly and easily accept credit cards on their phones.
- Create a smoother, more efficient checkout experience for customers.
- Can help you attract more Gen Z and millennial customers, as they are early adopters of newer payment methods.
- Don’t incur surcharges from mobile wallet providers; merchants only pay the standard credit card processing rate for the customer’s stored payment method.
Cons of accepting NFC payments
- Businesses must purchase or lease NFC-enabled card readers to support high-volume transactions.
- Merchants must work with a credit card processor that supports NFC payments and mobile wallet providers.
- Not all customers use NFC payments — some may prefer cash, traditional cards or other payment methods.
- Older payment terminals may not support NFC, requiring hardware upgrades.
- NFC transactions require a stable internet connection, which could be a challenge in areas with poor service.
What are the best NFC mobile payment apps?
Allen noted that Apple, Google and Samsung currently dominate the mobile payment market because of their offerings: Apple Pay, Google Wallet and Samsung Wallet. All of which have earned them name recognition and brand trust.
“Other providers may not have the same market share because Apple, Samsung and Google all have an advantage as well-known hardware providers for consumers,” Allen explained. “They also offer users a smooth and convenient experience by easily integrating with their broader tech ecosystems.”
Allen further cited these companies’ robust security focus as a reason for their digital wallets’ success. “Their investment in advanced security features like tokenization, encryption and biometric authentication (and partnerships with well-known merchants) also contributes to their widespread acceptance.”
Here’s a closer look at Apple Pay, Google Wallet and Samsung Wallet.
Apple Pay
Numerous merchants already accept Apple Pay — a payment method linked to the Apple wallet, which is conveniently preloaded on all iOS devices. According to Capital One Shopping research, Apple Pay is the top NFC payment method; it boasts a 92 percent market share and, according to Statista, 500 million worldwide users.
You can use Apple Pay once you’ve added payment cards to your Apple Wallet (which supports up to 16 cards as of iOS 17). You can also use Apple Pay when shopping online or via mobile apps and websites by selecting the Apple Pay option if it’s available.
Apple Pay uses a system called tokenization, meaning that even Apple does not have an unencrypted copy of customers’ payment information. Encryption occurs at the issuing bank level. This, combined with Face ID authentication, makes Apple Pay one of the most secure NFC mobile payment apps.
Google Wallet
Google Wallet (formerly Google Pay and Android Pay) is Google’s mobile payment service. In 2024, the company discontinued the Google Pay app in the U.S. and transitioned users to Google Wallet for secure in-store and online payments. It’s available on both Android and iOS devices. Most Android devices have built-in support for Google Wallet, enabling users to store payment cards, event tickets, passes and more. Additionally, users can send money to other Google Wallet users or transfer funds directly to friends’ bank accounts.
According to Statista, about 30 percent of U.S. survey respondents said they’ve used Google Wallet at a POS terminal in the past year, while another 30 percent indicated online usage.
Samsung Wallet
Samsung Wallet was introduced in 2022 following the merger of Samsung Pay and Samsung Pass. The goal was to provide a single platform for managing payment cards, digital IDs, keys, tickets, boarding passes and more.
Similar to Google Wallet, Samsung Wallet is designed for Android devices. However, its compatibility is limited to select Samsung smartphones that run Android 9 or later and support NFC mobile payments. This digital wallet supports NFC and magnetic secure transmission (MST) technology, enabling transactions at more payment terminals than some competing digital wallets. However, MST does not work at gas station pumps or ATMs that require physical card insertion.
Samsung Wallet has the smallest market share of the major mobile wallets and is used by roughly one in 10 Americans.
What are the best payment facilitators for NFC mobile payments?
Payment facilitators such as PayPal Zettle and Square allow you to accept multiple types of NFC mobile payments. Here’s what you should know about these top options:
- PayPal Zettle: PayPal Zettle (formerly known as iZettle) allows you to accept Apple Pay, Samsung Wallet and Google Wallet using the PayPal Zettle Reader 2. When paired with a charging dock, this reader can function as either a mobile or fixed payment terminal. It also integrates with Zettle’s POS system for a seamless checkout experience.
- Square: Square lets businesses accept Apple Pay and Google Wallet using the Square Reader for contactless and chip payments and the Square Register POS system. If you prefer to use your own iPad with Square’s POS software, you can purchase a Square Stand and connect it to the Square Reader for a fully integrated solution.
Neil Cumins contributed to this article.
