NFC technology for instant payments

What is the News?

Google Pay has launched a new feature in India called ‘Tap to pay for UPI’ in collaboration with Pine Labs. 

This feature will allow users with NFC-enabled Android smartphones and UPI accounts linked to Google Pay to carry out transactions just by tapping their phones on any Pine Labs Android point-of-sale (POS) terminal across the country.

What is Near Field Communication(NFC) Technology?

NFC is a short-range wireless connectivity technology that allows NFC-enabled devices to communicate with each other and transfer information quickly and easily with a single touch — whether to pay bills, exchange business cards, download coupons or share a document.

How does NFC work?

NFC transmits data through electromagnetic radio fields to enable communication between two devices.

Both devices must contain NFC chips as transactions take place within a very short distance. NFC-enabled devices must be either physically touching or within a few centimetres from each other for data transfer to occur.

What are the applications of NFC Technology?

NFC has a wide range of applications, such as:

– Driving payment services like Google Wallet and Apple Pay.

– Wireless Charging and generating contact-less tickets for public transport. 

– NFC is behind the cards that can wave over card readers in subway turnstiles and on buses to check tickets. 

– With just a touch, NFC can also set up WiFi and Bluetooth devices in homes.

– It also has an application in healthcare to monitor patient stats through NFC-enabled wristbands.

How safe is NFC Technology?

Firstly, NFC technology is designed for an operation between devices within a few centimetres from each other. This makes it difficult for attackers to record the communication between the devices, compared to other wireless technologies which have a working distance of several meters.

Secondly, the user of the NFC-enabled device determines by the touch gesture which entity the NFC communication should take place with, making it more difficult for the attacker to get connected.

Where does NFC stand in comparison to other technologies? 

There are other wireless technologies available that are replacing cable-based connections. 

IrDa technology is a short-range (a few meters) connection based on the exchange of data over infrared light, where the two communication devices must be positioned within a line of sight. This technology is mainly used for remote control devices.

Bluetooth or Wi-Fi connections: These technologies are used for larger data communication.  But the user has to configure their device and pair them together for communication. The connection cannot be initiated by a simple touch gesture like in NFC. Also, the receiver devices need their own power supply due to the larger working distance.

Source: This post is based on the article “NFC technology for instant payments” published in The Hindu on 4th April 2022.