NFC – It s a method that enables two devices to communicate wirelessly in close proximity, such as when they are touching or positioned just centimetres apart. It operates through the utilization of magnetic fields. To clarify, this entails verifying the authenticity of a credit card, granting access to individuals with a key card, transferring minor items among various devices, and initiating a more robust wireless connection. This post exclusively covers the topic of making payments via NFC.

Introduction – NFC

Financially included people are looking for everyday convenience, while businesses are looking for a competitive edge thus resulting in a new breed of products and next-generation payment options. Essentially, it expands on the existing technology used in RFID tags. There have been significant changes in the African financial sector. An increasing number of individuals are adapting to technology to become a part of the financial system; however, there is still a significant population that has not yet been integrated. Non-financial institutions are putting in a great deal of effort to devise innovative and novel methods to incorporate overlooked customers.

At the same time, many consumers still need to answer for their questions like what do I do on Internet banking, with NFC sticker on the back of my $10 mobile phone, with easy solution, open and integrated design technologies? A product that spans the complete front to back and back to a front solution like retail suits, corporate suits, funds suits, micro banking suits (Credit, Savings, Insurance etc).

The ranges of banking services by 3 Friends (Banks, MNO’s and FinTech) are underpinned by modern technology and architectures that leaves a wide choice of the stack. Same technologies which are very useful, innovative, and juicy on mobile payments through NFC method are available with zero adoption due to lack of customer education.

NFC – A Game Changer for Mobile Payments

NFC can play a major game-changer role, especially in micropayments. NFC payments are fairly secured, as straightforward to deploy like any other mobile app using standard technology. Any similar technologies or NFC are neither new nor a revolutionary innovation it’s in existence on this planet since decades, but not all of us are aware to make use of this for payments (Ok I agree most of us are).


Mobile payment using NFC has been around for a long time but banks and retailers are hesitant to participate due to fear of low adoption rate. NFC is an easy and simple concept but sometimes it gets oversimplify along with same reasons for payments under mobile or simplified version as mobile payments about which every single company on this earth is talking about these days and its true every single company.

Despite the unplanned origins of FinTech’s ‘banking services’ model, it has become an industry best practice, followed by many digital finance roll-outs including banks now. What will be the future of finance in Africa look like in 2025?

Using a combination of technologies like mobile device, bitcoin, blockchain, FinTech companies are building the Internet of value. The question then is what does this means for financial institutions, governments and citizens. Meanwhile, disruptive new entrants (almost all of them coming from out of the financial service industry with almost zero experience) continue/wanting to gain ground.

African Market View – NFC

Near field communication (NFC) can use the contactless chip in mobile phone or in small sticker at the back of the phone, NFC can be used for all kinds of applications, contactless payment at POS and also P2P payments up to an extent.

To get NFC accepted more, the mobile device businesses needs to look longterm & subsidies introduction of such tech. NFC has broader applications than just mobile payments. PayPal having gained first-mover advantage in this space although PayPal has not stopped trying, it has chalked up several failed attempts in NFC and in-store payment.

Security is an integral component of all payments, as sensitive data need to be protected from any fraudulent parties. The card associations have created a set of rules and security standards, which must be followed by anyone with access to card information including gateways.

For banks, NFC payments do not make much business unless any bank is interested in micropayments and collection as most of the bank wants to do big value transactions. Along with value banks always wants to be on the back seat to eat all the cream.

The primary uses of NFC are

  • Connect electronic devices, such as wireless components in a home office system or a headset with a mobile phone.
  • Access digital content, using a wireless device such as a cell phone to read a “smart” poster embedded with an RFID tag.
  • 2 devices read and write to each other using NFC, touching two handsets together to transfer data like contacts or photos normally called as two-way communication.
  • The device reads and writes to an NFC chip.
  • Make contactless transactions, including those for payment, access and ticketing.

Looking at the type of payment that can be routed via NFC interface

Banks will certainly have to judge whether the massive investment they could make, in order to challenge the spreading popularity of payment systems such as PayPal, will be worthwhile, given that PayPal has gained ‘first mover’ advantage and that as highly-regulated financial service companies with duties to both national and continental authorities, they have to abide by stricter rules and security protocols.

  • M-Commerce – Mobile phones linked to credit/debit cards can be used to make payments typically for transportation, vending machines etc.
  • E-Money – Cash loaded in the mobile phones at service provider outlets. Consumers use this virtual cash as real value for all types of transactions.
  • Banking Channel – Mobile phone used for accessing the bank accounts. All payments are routed through the bank.
NFC Patments.png

They must also judge whether their customers will move with them into a new more agile, flexible and electronic future, or whether a majority of people actively prefer the new, low cost (or free) services that have sprung up as part of the digital revolution. Banks, for their part, will continue to work hard to convince customers that they have their interests at heart and are introducing new payment systems in order to make their lives easier and save them money while maintaining their security.

Broadly speaking, m-money refers to financial transactions and services that can be carried out using a mobile device such as a mobile phone or tablet. These financial transactions and services are sometimes referred to as mobile financial services and may or may not be linked directly to a bank account.

What are the implications of NFC based Mobile Payments solution? Is it going to change the world, be a significant “win”, be a nice hack? NFC based mobile payments can support globally and will give financial institutions and partners greater choice in offering consumers secure ways to pay with smartphones.


Conclusions- Although we have made great strides to expand access to financial services through new technologies and innovative business models, the gender divide stubbornly persists in most emerging markets. The report estimates that about 1.1 billion women globally are excluded from the formal financial system. In developing countries, 59 per cent of men hold bank accounts compared with 47 per cent of women. Speed is what customers and sellers looking through the checkout process.

Its proven fact higher the speed higher the adoption rate. Thus to increase payment instrument speed the answer may be NFC gets fit in here to reduce average purchase amount transactions.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.


  1. Mathews Zimba at

    Impressive insight.

    ⁣Mathews Zimba

    Sent from BlueMail


  2. Thank you for a great article, it was very interesting and informative.


  3. […] via NFC – FinTech, Banking, Technology and Speed — Vinod Sharma’s Blog […]


  4. Excellent Post


  5. Speed is what customers and sellers looking through the checkout process. NFC is a good option for small purchase….


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