The wide-spread use of near-field communication (NFC) technology by many consumers across the globe comes as no surprise. Holding up a smartphone to a scanner at a ballgame or checkout counter, is no doubt, as reflexive for some as tying their shoes or ducking when someone yells, “Fore!” during a day on the golf course. But is it possible that there could be an alternative solution that offers a better user experience than NFC? Is there a more scalable, contactless payment method that offers more reliability and data security?
Let’s take a deep dive into NFC technology to uncover whether the benefits and cost of ownership outweigh the alternative of sound technology.
What is NFC and How is it Used?
Near-field communication has evolved from a quality-of-life feature to something many of us rely on every day. NFC is a short-range wireless technology that allows your smartphone to act as a transit pass or credit card, that quickly transfers data, or instantly pairs with Bluetooth devices like headphones and speakers. Essentially, it enables two devices to communicate wirelessly when they’re close together.
How many times have you left the house, forgetting your wallet or credit card and relied on your smartphone to process payments instead? Convenient, right? Not only can NFC be used to purchase products and services, but it can also be used for the following:
- Device to Device File Sharing – Want to share a file with a friend? Transfer a file from one device to another seamlessly, like a video or photo.
- Contact Sharing – Just finished meeting people for the first time? Hold your smartphone to theirs and instantly have their contact information stored on your device.
- Ticketing – Forget boarding passes. Let’s now imagine just walking up to the counter and using your mobile phone to authenticate you before boarding an aircraft.
NFC can certainly help businesses boost sales and provide an added layer of convenience to file sharing and payment transactions, but it also comes with its own set of limitations. Every business has different initiatives when it comes to offering security and convenience to their customer base. Perhaps your initiative is to cut down on long wait-times or enhance the security of contactless payments. While NFC certainly has its benefits, the technology is slightly limited in that any two devices need to practically be touching in order for the transaction to go off without a hitch. And what customer wants to wait in line, only to finally make it up to the counter and spend several minutes trying to get their phone to scan properly?
How Much Are You Paying for Convenience?
While it may be convenient for consumers to leave their card or wallet at home, is it equally as convenient for them to make several attempts to scan their smartphone (we’ve all been there) until the chip reader accepts payment? And what about the high cost of ownership for merchants or added expenses for maintenance and the ancillary costs to replace equipment? If one NFC reader or QR code scanner is $500 and you’re a larger-scale merchant who requires a hardware refresh every three years across 100 locations, that expense is…well, it’s a lot!
With sound technology, you can improve payment efficiency by 67% over QR codes and eliminate the large per unit investment of $500 to $1,000 to upgrade to NFC readers. Aside from cost, another limitation to consider is that while NFC may be available in most retail, mobility and ticketing channels within the United States, it is not available in all other countries. What is the alternative for merchants in these countries instead? Additionally, what alternative is available to merchants within the U.S. looking to cut costs and still offer a secure, reliable method of payment?
What is the Alternative Method for Secure Contactless Payments?
NFC is a set modality, whereas sound technology is a non-captive modality that offers the scalability and flexibility to function (variably) from any distance (and from anywhere). For example, in retail, transit and event spaces, smartphone payments and ticketing applications use sound to convert standard speakers and microphones into high-quality receivers and transmitters for secure data transmission. Only necessary data is transmitted to complete on premise transactions, provide identity verification for entry and trigger location-specific marketing to deliver a huge advantage over other existing technologies.
An added bonus to transmitting data over sound that many business leaders have come to realize, is that it helps prevent scams and fraudulent attacks. As with any payment security technology, shortfalls and associated risks always exist. In application, NFC technology is secure, but it is only as secure as the operating system that’s using it. While some operating systems may be “more secure” than others, vulnerabilities in software will always present themselves. However, among the secure payment tools and resources available to most merchants, sound technology is emerging as a leader for the following reasons:
- Eavesdropping and Interception – It is possible that even within the short range transmission of NFC, there could be some form of man-in-the-middle attack. This is where an unauthorized person can eavesdrop and intercept an NFC exchange. This type of attack is also sometimes referred to as radio frequency identification (RFID) skimming, as it can apply to both longer-range RFID as well as NFC-based data exchanges.
- Replay Attacks – According to NIST, during a session replay attack, the information used to execute one transaction in a session is then “replayed” a second time to defraud a user with a second transaction. Session replay attacks are not unique to NFC, but can still have negative consequences.
- Malware or Malicious Code – can specifically be written to exploit mobile operating systems and applications as a means to easily steal your information. Hackers can also use malicious code on a consumer’s device or collect information by tapping their device with another NFC device.
The world we live in is changing quickly. Contactless solutions are not going to be perceived as a luxury, but an absolute necessity. Is NFC convenient? Sure! But data over sound technology adds to the user experience by making transactions safer and more reliable. As new social norms centered around social distancing become more and more prevalent, companies will be forced to appeal to new consumer demands and payment alternatives, or risk being deemed as negligent or unsafe.
At LISNR, we offer the only secure, dynamic, non-captive near-field transaction solution for payments and fulfillment at proximity. The benefits of using our sound technology as an alternative payment method to NFC provides merchants with the following:
- Control – We enable device agnostic transmission and software allowing client control of the experience, transport layer and business model.
- Security – Flexibility to support encryption, cryptography, key exchange alongside full duplex, multi-channel features. We can enable the most secure transmission method seamlessly.
- Seamless User Experience – Faster and more seamless checkout experiences enabled with the combination of range and full control over the user experience.
- Cost Effective – Flexibility to support favorable transaction fees and cost structures in payment experiences due to security and control.
If protecting consumers and securing payment transactions is a top priority for your business, contact us to provide a safe, reliable, alternative method to contactless payments.