RFID and other contactless terms explained
The payments industry is in a state of flux. That’s because financial services sector has evolved beyond the tradition of cash and coins being the only means that consumers use to pay for goods or services. The proliferation of immediate payments, digital innovations and the emergence of unconventional players have started changing the game.
Within the mobile payments space, not only are there an assortment of new payment possibilities but there are also a deluge of acronyms used to describe the innovations that are making waves. Even the most clued-up payments pro may need a little help deciphering what all of these letter combinations actually mean.
That’s where we come in. Here are a few contactless terms you may have heard but don’t quite understand:
RFID – Radio frequency identification
RFID devices work much like a barcode or a magnetic strip on the back of a credit or debit card. The RFID device functions as a unique identifier for a specific object. In the same way that one would swipe a card or scan barcode to get unique information, the RFID device is scanned to retrieve identifying information. RFID technology is made up of two components – a microchip that stores information and an antenna that transmits and receives a signal. RFID is believed to be better than barcode technology because these devices can function at a considerable distance from the scanner. Where is it used today? RFID tags are used in various industries – they are attached to cars during manufacturing to track progress through the assembly line, RFID-tagged pharmaceuticals are tracked in warehouses and these tags are also implanted into animals so that farmers or pet owners can keep tabs on their four-legged friends.
NFC – Near field communication
NFC is the evolution of RFID. This contactless payments technology allows your laptop, phone and tablet to share information with other NFC-enabled devices. Basically, it enables the wireless transfer of data – be it payments, videos, contact information or photos – without an internet connection. NFC differs from RFID in that communication is limited to about 10cm, hence the “near” reference. While this may seem like a limitation, many believe this small data transfer radius to be a major security benefit.
BLE – Bluetooth low energy
Low energy Bluetooth (often called Bluetooth Smart) is ideal for devices that run for long periods because it requires minimal amounts of energy. Have you ever heard of the Internet of Things (IoT)? Where your tablet can turn on your washing machine or your heart rate monitor talks to your smartphone? All of these devices are connected wirelessly via Bluetooth technology. The difference between BLE and traditional Bluetooth is the considerable reduction in power consumption and cost.
MST – Magnetic secure transmission
Also known as magnetic secure transmission, this contactless payments technology uses traditional magnetic readers to transform your mobile phone into a digital payments device. The beauty of MST is that it works with almost all existing point of sale terminals that use a magnetic stripe reader, overriding the need to physically swipe a card. This technology has proven popular because it solves the problem faced by many other contactless and mobile payment offerings – a lack of uptake from retailers.
EMV – Europay MasterCard Visa
EMV is the credit standard named after the big credit card schemes that developed it – Europay, MasterCard, and Visa. EMV standard cards contain a microprocessor chip. These transactions are often called “Chip and PIN” because a PIN is needed to verify that the person attempting to use the card is the genuine card owner. This makes counterfeiting much more difficult.
Want to find out more about how contactless and mobile innovations can make transactions less troublesome? Check out EFTPOS to learn how your business can make payments faster, more affordable and more secure.
