What is an NFC Reader? How Does It Work with Mobile Payments?

A near-field communication (NFC) reader is a device that can be used to collect information from other NFC-compatible devices that pass within range. In business, this can include smartphones, which allows for mobile payments. The process that NFC readers use for mobile payments is relatively simple to understand once you know the basics. First, here are a few facts about NFC readers that make them unique.

They are Secure

Near-field communication readers are significantly more secure than you would think. Some customers question security because you only have to come within a certain range of the reader for it to pick up information from your mobile device. However, it is actually safer because it works at a shorter distance than RFID readers. Additionally, there are several layers of data encryption and other safeguards that protect your personal information.

NFC Readers work with More than Mobile Payments

In addition to mobile payment processing, a service Fattmerchant offers, near-frequency communication technology can be used to process other forms of contactless payments. This includes rewards cards, debit cards, and credit cards that have NFC technology. In any case, these are very secure payments. A single-use transaction code is generated to identify the transaction. Your card number or other sensitive information is not transmitted during this time. The reason this is so advantageous is because even if someone manages to intercept the information and decrypt it, they will only be able to pull a transaction code. This significantly reduces the risk of fraud.

NFC Readers vs RFID

People often see several similarities between radio-frequency identification (RFID) and near-frequency communication technology. The reason for this is that NFC technology is a branch of high-frequency RFID. Both of these allow devices to be uniquely identified with the use of radio waves. While RFID can read at a distance of 100 meters, this is not necessarily useful when it comes to processing mobile payments. Radio-frequency identification is better suited for asset location and logistics, or when inventory may need to be tracked. NFC, however, reads at a much closer distance. Additionally, there is a significantly higher level of security with near-frequency communication devices because of the sensitivity of data that may be exchanged.

NFC Readers vs Bluetooth

NFC readers are very similar to Bluetooth technology because both transmit data between sources within a certain range. However, there are several differences that make each better in certain situations. This is the reason that near-frequency communication readers are better for businesses than simple Bluetooth technology. They are generally more secure. Additionally, they have a lower level of power consumption and have the power to connect devices within just a tenth of a speed. This is significantly faster than Bluetooth. Bluetooth, however, does have the advantages of longer distances for transmitting data. When it comes to processing mobile payments, though, this is not necessarily an advantage because it could cause several devices to connect at once and slow down the speed at which payments can be processed.

How do NFC Readers Work?

Near-field communication readers work using technology that transmits radio waves between two devices. The device, whether it is an NFC compatible debit or credit card or your mobile phone, will transmit payment information to the reader. This is done using a single-use code that is generated for each transaction. This code is what makes the reader so secure. Even if a thief is able to decrypt the several layers of security that this code goes through, it would be useless. The reason for this is that your card and account information is never transmitted during the transaction.

Author bio: The writer of this article, Lautaro Martinez, is a small business owner who has transitioned into mobile payments recently and has had a positive experience. He enjoys sharing his tips and experience with incorporating the service into his business. If you would like to learn more about Lautaro, check out his google+ profile.
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