NFC versus mobile POS: What's best for small businesses?
March 25, 2013

"Mobile payments" is an umbrella term for two different ways of processing transactions using smartphone and tablet devices. On one end, there are mobile point-of-sale systems, which involve pieces of hardware being attached to smartphones and tablets that allow companies to accept credit card payments and accept debit card payments. On the other end of the spectrum is near field communication (NFC) technology, which allows customers to simply tap their mobile devices at the point of sale to deduct their purchase amount from a virtual wallet.

Many businesses are now faced with the choice of which payment solution they want to support. While both can used simultaneously, the fact of the matter is that for most companies, NFC technology just isn't quite at the adoption point it needs to be to make the investment worthwhile.

NFC drawbacks
NFC is still a relatively nascent technology. In order for contactless payment processing to work, companies need a special setup and consumers' phones must have a specific chip to communicate with a business' payment system. However, NFC technology is not yet universal - a number of tablets and smartphones don't make use of this technology.

For example, Apple devices still do not support NFC technology. Considering the fact that 37.8 percent of all U.S. mobile subscribers own iPhones, that means nearly four in 10 smartphone owners by default can't use contactless payments. On top of that, there are other brands of phones that don't use the technology as well, and even if consumers have access to the technology on their devices, there is no guarantee they will even use it.

So for small businesses looking to get into the field of mobile payments, NFC technology may be a bit premature at the moment. A significant portion of customers aren't utilizing the right devices for NFC-based mobile payments, which may limit the return on investment (ROI) associated with integration costs.

Mobile POS is here now
Mobile payment solutions, on the other hand, are here now. They allow businesses to process popular payment types that customers are already using - credit and debit cards. If companies don't have any existing debit and credit card processing capabilities that enable them to conduct these transactions right now, then mobile POS solutions can help them quickly catch up. Compared to NFC technology, there is an immediate benefit to implementing and integrating these systems in modern businesses.

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