Credit Card NFC Technology: What it is and how it works? | Mint

Credit Card NFC Technology: What it is and how it works? | Mint

Source: Live Mint

With the move towards digitisation of financial transactions, credit cards are evolving every day. One such evolution is a near-field communication credit card that aims to make payments convenient, quick, and secure.

What is NFC?

Near-field communication, or NFC, is a short-range wireless technology that enables the exchange of data from a certain distance. NFC-enabled devices have a silicon chip that helps to complete transactions. This technology helps in contactless payments through credit cards, debit cards, smartphones, and other devices

What is an NFC credit card?

NFC credit card uses near-field communication to make contactless payments. It tries to make your transactions easy and quick compared to a traditional credit card. It is different from a traditional credit card, where you have to swipe or insert the card to make payments. 

In an NFC transaction, you just have to tap your card on an NFC-enabled device. The short-range technology makes connections from a distance of a few centimetres. You can identify a NFC card by looking for the contactless logo or a wifi symbol.

How does it work?

NFC technology functions through radio-frequency identification technology (RFID) that uses radio waves to exchange information. RFID uses radio waves to identify data and share information. It has two elements; tag and reader. The tag has a microchip and antenna which helps in storing and transmitting data. The reader receives the signal from the tag and emits radio waves.

How to use an NFC credit card?

Step 1: Show your credit card near the NFC terminal when the device signals you to.

Step 2: The NFC terminal will read your credit card information and process the payments.

Step 3: According to the RBI mandate, for transactions above 5,000 you will be required to provide a PIN to complete the transaction.

In conclusion, like every other innovation in the financial realm, NFC credit cards help to make shopping easy. However, keep in mind the risks associated with such transactions and avoid overspending due to the convenience they offer.



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