NFC Slow to Adopt - But Why?

Contactless technology is available, but there is little acceptance in the retail POS market. Why?

on 2018-07-30 Jim McMillan wrote

NFC (Near Field Communication) is the technology that is associated with ‘tap and go’ credit card payments as well as smartphone apps.

For POS retailers, this method of payment (also known as ‘Contactless’) takes several forms such as ApplePay, Android Pay and SamsungPay. But statistics have shown that while these are available on most of the PCI compliant terminals in the field today, they are seldom used. Why is that? A lot of confusion surrounds this technology. In some cases, it is as simple a matter as enabling the feature. In other cases, it’s a matter of card distribution (many credit/debit cards have a chip, however they are not NFC enabled). A further complication is that some processors accept either passive NFC (tapping your credit card) or active NFC (ApplePay, etc) but not both. You can see how (with all the moving parts) this gets messy.

After the tech is sorted out, there remains a significant, final stumbling block: the consumers themselves. Studies have shown that almost 40% of Americans have tried contactless payments when making a purchase. Further analysis of these statistics, however, show that less than 3% have used contactless in the last 3 months. Clearly, the end-users are reluctant to adopt, despite the convenience; many still express concerns about security; their smartphones being stolen or their card triggering an unintentional charge.

NFC and both passive/active functions remain the ‘shiny new toy’ and sparked a round of enthusiasm, when they were first announced. But until security concerns are alleviated and the true benefits of contactless are understood, consumers will remain on the fence.