As of 2026, cash usage has reached record lows—accounting for just 14% of payments—while credit and debit card dominance continues to rise.
But businesses aren’t only seeing a rise in debit or credit card payments. Recently, contactless payments using NFC technology have become increasingly popular. In fact, by the end of 2026, 81% of all physical payment cards globally are expected to be contactless-enabled (tap-to-pay).
While NFC payments are undoubtedly the latest evolution in accepting payment methods, many retailers and business owners may be unfamiliar with what exactly NFC transactions are and how they work. That’s why we’ve created this guide on what you should know about NFC terminals, including how they work, their advantages, and the top processors with NFC terminals on the market.
TL;DR
- NFC stands for near-field communication; it’s a type of technology that lets two devices in close proximity to each other communicate and exchange data.
- In order for NFC payments to work, merchants need an NFC-enabled point-of-sale (POS) system and the consumer’s smartphone or card.
- NFC payments are just as secure as paying using an EMV card.
What are NFC terminals, and how do NFC payments work?
NFC stands for near-field communication; it’s a type of technology that lets two devices in close proximity to each other communicate and exchange data. For NFC payments, the devices are the NFC point-of-sales/POS system (which requires a stable internet connection, such as WiFi, Ethernet, or 4G/LTE/5G cellular) and the consumer’s smartphone or card.
With a phone, the customer starts the payment process (usually by selecting the card from their digital wallet or holding their phone close to the NFC POS) and then authenticates the transaction.
For example, on an iPhone using Apple Pay, this can be done using Touch ID or Face ID. The NFC technology then exchanges (encrypted) information between the phone and payment system via tapping or hovering to complete the transaction.
The process is similar when using a smart card: The customer simply needs to wave or tap their card on the NFC terminal, and the transaction will be completed. Verification is typically handled on the user’s own device (like FaceID) or via PIN for high-value transactions, eliminating the need for physical signatures.
It’s common for merchants or retailers to confuse NFC-enabled cards for EMV cards or RFID technology. While there is some overlap, it’s good to know the differences between them.
EMV credit cards and payments vs. NFC cards and payments
- EMV cards, which stands for Europay, Mastercard, and Visa, are chip-enabled credit cards (note that they’re not chip-and-signature cards). They allow users to dip their cards into a card reader and make payments, and they are more secure than the older magnetic stripe cards.
- Meanwhile, NFC payments allow customers to pay by simply tapping or hovering their card or smartphone near a payment terminal. NFC is a specialized subset of RFID that operates on a specific high frequency (13.56 MHz), allowing for the secure, two-way communication required for financial data.
RFID technology vs NFC technology
- RFID stands for radio frequency identification and is a contact-free technology using radio waves to transfer data via tags or cards.
RFID tags typically communicate one-way only, usually from the tag to the reader, and cannot transmit large amounts of or complex data. That said, it has a range of a few hundred feet and is mostly used for access cards or in warehouse inventory and asset tracking.
- NFC technology is a subset of RFID technology, operating on one of the same frequencies RFID tags use. It allows for two-way communication and can transmit more complex information, making it ideal for NFC payments, but has a very limited range, or proximity, of under four inches.
Why businesses should use NFC mobile payments
Retailers that don’t keep up with evolving consumer demand may find themselves losing customers and revenue, so it’s imperative to stay ahead of the curve. In 2024, nearly 95% of eligible in-store card transactions were contactless.
And according to a 2025 Mastercard poll, over half of Americans are now using some form of contactless payment. So, if you want to stay up-to-date with modern payment trends, accepting forms of NFC payments is a must.
Another factor to consider is the speed of NFC. All the buyer needs to do is wave or tap their card, significantly streamlining up the purchasing process, which improves the buyer’s experience. Plus, it can help make your business’s operations more efficient, particularly if you have a high amount of transactions.
There’s also a major advantage we haven’t spoken about yet: security.
How secure are NFC terminals?
Good news: NFC payments are just as secure, if not more so, than paying using an EMV card. In fact, there are three key features in particular where NFC terminal security shines.
Proximity
As mentioned earlier, NFC cards only work in a range of under four inches. This makes it hard for hackers or fraudulent users to intercept your transmission, as they would need to be in that range to do so.
User initiation
To complete an NFC transaction, the buyer needs to start the process by bringing their card close to the NFC terminal or opening their mobile wallet app (like Samsung Pay). This means a hacker can’t trigger a fraudulent transaction remotely. Additionally, most phones require an additional form of authentication, such as a fingerprint, PIN code, or facial recognition.
Secure element validation
Just like EMV cards are validated each time a transaction is made through the chip, NFC payments have a similar process. Both contactless cards and mobile wallets utilize tokenization, replacing your sensitive card number with a one-time-use digital token, and store this data within a hardware-protected secure element.
What are the best NFC terminals on the market?
There’s no shortage of available NFC POS systems available on the market, all with different features, selling points, and advantages.
If you’re looking for an all-in-one payment processing platform with NFC offerings, look no further than the contactless payment solutions at Stax. Whether you’re a small, medium-, or large-sized business that needs NFC terminals, we provide the hardware and software to streamline your checkout process and payments reporting, all while providing world-class security.
Stax stands out by offering 0% markup on direct-cost interchange, providing a level of transparency and savings that flat-rate providers cannot match for growing businesses. With our straightforward pricing, you’ll never be hit with unexpected fees.
Wrapping up
It’s undeniable that allowing your customers to make NFC payments when checking out offers a more seamless purchase experience, all while futureproofing your organization. By finding the best NFC card reader and payments provider tailored for you, you’ll be able to grow and scale your business for the long run.
Stax’s contactless payment solutions help businesses of all sizes modernize their business in no time. With Stax Pay, you get an all-in-one online and touch-free payments solution provider with upfront and transparent pricing. To get an NFC reader, contact us today, and we’ll walk you through your options.
Quick FAQs about NFC technology
Q: What is NFC technology and how does it work?
NFC stands for near-field communication, a technology allowing two devices in close proximity to exchange data and communicate with each other. For NFC payments, the devices are the NFC-enabled point-of-sale (POS) system and the consumer’s smartphone or card. The customer initiates the payment process, and then the NFC technology exchanges encrypted information between the phone and payment system to finalize the transaction.
Q: How do NFC payments differ from EMV and RFID payments?
While there is some overlap, NFC, EMV, and RFID payments are different. EMV cards (Europay, Mastercard, and Visa) are chip-enabled credit cards that allow users to dip their cards into a reader for payments. NFC payments, on the other hand, involve customers tapping or hovering their card or smartphone near a payment terminal. RFID (radio frequency identification) is a contact-free technology using radio waves to transfer data via tags or cards, and NFC uses a subset of this technology.
Q: Why should businesses adopt NFC mobile payments?
Adopting NFC mobile payments allows businesses to stay ahead of evolving consumer demand. In fact, 1.3 billion people worldwide currently use NFC payments. NFC payments streamline the purchasing process, improving the buyer’s experience and making business operations more efficient.
Q: How secure are NFC terminals?
NFC payments are as secure, if not more so, than EMV card payments. The key security features include proximity (working only within four inches), user initiation (buyer needs to start the process), and secure element validation (similar to how EMV cards are validated).
Q: Does Apple Pay work on all NFC terminals?
In general, if a terminal accepts NFC payments, it should also accept Apple Pay, as Apple uses the industry standard. However, the actual compatibility may depend on specific terminal models and configurations.
Q: Are there any security risks associated with NFC terminals?
While NFC terminals are generally secure, there’s a small potential risk of hackers accessing the merchant data stored in the NFC terminal. This, however, would require the hacker to be in close proximity to the terminal due to the limited range of NFC technology. However, all NFC terminals must be compliant with the latest PCI DSS v4.0.1 standards, which helps mitigate risk.
Q: Can any NFC terminal recognize Apple Pay?
Most NFC-equipped EFT PinPad devices should work with devices that have the secure element (SE) chip. However, specifics may depend on the device and terminal models.
Q: What is an NFC-enabled terminal?
An NFC-enabled terminal is a payment device that can communicate with an NFC-enabled credit card or device. The cardholder simply waves the card or device in front of the terminal to make a payment. This technology is increasing in popularity, as it offers a quick and convenient method of making payments.
