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NFC technology could be key to mobile payment adoption

Sep 04, 2013 Dave King

As consumers begin to shift away from credit cards and other forms of payment, businesses would be wise to implement mobile payment systems. One of the available technologies is near-field communication, and now may be the time to get into the market, according to FinExtra.

Businesses across the country are already updating POS terminals to support chip-based cards, so it would make sense to incorporate NFC as well. The biggest reason to implement NFC is the fact that it won't create too much additional cost, the source noted.

However, this technology doesn't come without risk that needs to be addressed. According to Information Week, NFC enabled devices have much more data than a typical debit or credit card, which puts consumers at a greater risk. A recent study conducted by McAfee revealed that criminals are likely to target tap-and-pay systems increasingly in 2013.

For this reason, businesses will need to recommend security tips for consumers. Perhaps the simplest step people can take is to set up a password on their phone. Additionally, applications that are able to locate lost devices could prove beneficial.

Lost and stolen devices aren't the only security concerns about NFC technology though. Hackers could gain access to signals using advanced electronic circuits to steal payment information, according to the source. To ensure this doesn't occur, it would be smart to only use devices with strong authentication and encryption of sensitive data during transfer.

With the potential for security issues, businesses should be sure all have been addressed before implementing NFC. The use of the technology can be extremely beneficial for retailers, but if consumers lose their personal information while in stores, that business could lose the trust of customers.