Mobile Phones as Money: The Rise of NFC Payments
The telephone has come a long way within 140 years, since Alexander Graham Bell first rang his assistant with the immortal words, “Mr. Watson, come here, I want to see you”. The invention of the phone, has since been shrunk down to fit into the palm of one’s hands, and equipped with more computing power than NASA used to send Apollo 11 to the moon. Today, people use their mobile devices to navigate through cities, connect to the internet, watch their favorite movies and catch Pokemon characters. But with the advent of contactless payment technology, the telephone is now causing a seismic shift in that which forms the bedrock of commerce itself… money.
Contactless payment uses near-field communication (NFC) technology, which allows two devices, like a phone and a reader, to communicate with one another. A customer, need only to hold up a phone an inch from the reader to purchase anything from coffee to clothing. Transactions are lightning fast, but best of all, more secure than traditional payment methods. FreedomPay is a company that has emerged as a leader in the data encryption that makes contactless payment more secure.
Over the past several years, FreedomPay has provided merchants with secure transaction solutions through Point-to-Point encryption (P2PE) services. In fact, the company was the first in the United States certified in this cutting-edge encryption by the PCI Council. FreedomPay has pioneered everything from cashless solutions to mobile payments, virtual and remote terminals, payment processing, intelligent analysis, routing of promotions, incentives, and customer relationship management services. Simply put, FreedomPay allows retailers to serve their customers with the most scientifically advanced transaction technology available.
American consumers are quickly taking advantage of contactless payment methods enabled by NFC. The “My Starbucks Rewards” loyalty program, which utilizes mobile payment, grew 28% between 2014 and 2015, and has amassed more than 10 million members. Starbucks estimates that these shoppers account for 30% of all business in North America, and enjoy faster service along with perks like free drinks.
Speed and unmatched security are the two biggest features driving the adoption of mobile payment. Deloitte predicts the number of NFC-enabled devices used for making in-store payment will rise steadily in the medium term. American Express finds that contactless transactions are 63% faster than cash, and 53% faster than credit card payments.
What makes a NFC transaction more secure than a traditional credit card payment is that a customer’s mobile device sends a unique code (called a token) to the merchant’s NFC-enabled reader. The actual credit card number is never sent, so in the event of a security breach, a hacker would only acquire useless alphanumeric code.
Everyday, the number of customers using mobile payments continue to grow, and in time, will become the preferred method of transaction. FreedomPay’s Commerce Platform integrates payments, incentives, and loyalty programs within a retailer Point-of-Sale system, with no new hardware required. It can even target special offers directly to a customer’s phone, while they’re shopping. The future of currency is here. Contact FreedomPay to discover how our transaction solutions can prepare your business for today’s new money.