Are NFC Transactions Safe? | CreditShout

Are NFC Transactions Safe?

By Dan Rafter / June 9, 2011
Paying with Your iPhone: The Future of Payments?

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According to one new study, the vast majority of U.S. consumers are intrigued by the idea of using Near Field Communication — more commonly referred to as NFC — to make retail purchases with their smart phones.

There’s one key, though: Consumers are only interested in these transactions if they are safe. According to the survey from Mobio Identity Systems, 94 percent of North American consumers would make NFC-assisted payments as long as appropriate security measures were in place to protect their data.

That’s the big question, then: Are NFC payments safe?

How NFC Works

Google made news earlier this month when it rolled out plans for its Google Wallet app for Android phones. This app will let consumers use their smart phones to pay for retail purchases by swiping them before a specially designed scanner.

Google Wallet would also automatically apply any discounts or loyalty point rewards to the consumers’ accounts when they use the service.

The idea of NFC has intrigued consumers and credit card companies for years. Powered by short-range wireless technologies, NFC-enabled phones will allow consumers to make purchases without digging for cash or credit cards. A simple swipe in front of an NFC-enabled scanner is all that it will take for consumers to purchase their groceries, home electronics or other merchandise.

NFC Security Fears

Consumers, though, are a bit hesitant when it comes to security. Criminals can pick up the signals for wireless data transfers with antennae.

However, there is evidence that NFC payments are every bit as safe, or even safer, than is using a standard credit card.

Think about it: When you use your credit card to pay for an expensive meal at a restaurant, you send it off with your waiter. What’s to prevent that waiter from stealing your card information? What about when you happily hand your credit card to the cashier at Wal-Mart? What’s to stop a clever cashier from lifting your card’s information?

High-tech crooks might be able to lift the signal from an NFC payment. But it can’t be easy doing this in a crowded retail store. And let’s be honest, how many high-tech criminals are there actually out there who are interesed in the relatively low-level crime of copying NFC-transaction signals?

There are risks with any financial transaction. Cashiers can short your change when you pay with cash. They can nab your credit card information when you pay with plastic.

There is little evidence today that NFC transactions are any riskier than any other payment method.

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone.Additionally, the opinions of the commenters are not necessarily the opinions of this site

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