Paying for purchases with your smartphone is becoming increasingly popular, but customers are still feeling apprehensive about security concerns.
If you go back about 20 years, you might remember your wallet being loaded with money and fewer plastic cards. Today, wallets are loaded with plastic and often no cash, as most purchases are made by debit, credit or even online from your computer or mobile phone. In a few years, the technology that makes mobile phone payments possible (NFC, or near field communication) will become more popular and accepted and NFC payments will become an unavoidable part of our everyday life.
But the question remains: are mobile NFC payments secure?
What is an NFC payment?
Near-field Communication (NFC) technology allows smartphones and other enabled devices to communicate and exchange small bits of data at a distance of a few centimeters. Think about touching your smartphone with someone else’s to exchange contacts, links or photos.
Chances are, you’ve already used this innovative technology even if you’ve never owned an NFC integrated phone, such as the iPhone 6, iPhone 6 Plus, Apple Watch, Nokia Lumia or Samsung Galaxy S5.
How You Make a Payment
When you make a purchase with your credit or debit card and tap your card on the terminal, the NFC-powered terminal charges your card and deducts the purchase cost from your bank account. NFC payments made using your phone work the same way.
After you launch the payment feature on your mobile device, tap your phone on that credit card terminal to activate the NFC connection. You’ll then enter a passcode, or maybe scan your finger depending on the retailer, to approve the transaction. The Secure Element chip, which is designed to protect critical information in your phone, validates the transaction and authorizes payment to the NFC modem. The purchase is completed the same way as a plastic card transaction would.
Many users are still skeptical about the perceived lack of security in making NFC payments. But, assuredly, the payment structure is solid and safe, and hacking it is very difficult.
Making a mobile NFC payment is as secure as using a plastic bank card. NFC mobile payment uses the same security mechanisms for contactless cards and brings additional security. Mayor payment networks endorse these new security layers.
Also, the range of the NFC makes it very difficult for a criminal, or someone else, to intercept the signal. For the NFC signal to work, the devices have to be fairly close to one on another. Then, the secure channel allows only an authorized device to decode it.
What happens if you lose your phone?
It’s simple. If you lose your phone that has all your bank information, contact the mobile network operators (MNO) to remotely lock all the applications in your phone. The MNO will notify concerned service providers to prevent unauthorized transactions on your phone. You do not have to call individual service providers.
The MNO will also issue a new SIM and restore all services that were available through your lost or stolen SIM. Your information is hidden in the phone so in case of theft, it’s critical you have a passcode lock to prevent someone else from launching the NFC payment option.
While there may seem to be some risks involved with NFC payments, it’s a technology that is cemented with security. Through data encryption and secure channels, NFC lets customers make payments quickly, efficiently and safely.