NFC and FinTech – The financial services industry in Africa is undergoing a profound transformation, marked by an increasing number of people joining the formal financial system thanks to mobile technology. However, there is still a considerable portion of the market that remains untapped. Non-bank organizations are continuing their quest to develop novel methods for bringing unbanked individuals into the fold. Consumers who are part of the mix demand convenience in their daily lives, whereas businesses are seeking a form of advantage that sets them apart, leading to the development of novel products and advanced payment methods.

Introduction – NFC , Technology and Speed

While many consumers continue to have inquiries concerning the use of Internet banking and NFC stickers attached to their budget-friendly mobile phones, modern technologies with an open and integrated design offer easy solutions. These solutions include a broad range of products, such as retail, corporate, and micro-banking suits (credit, savings, insurance, etc.), offering complete front-to-back and back-to-front solutions.

fmbThe range of banking services offered by the three friends (banks, MNOs, and FinTech) are underpinned by modern technology and architectures, which leaves a wide choice of stacks. The same technologies, which are very useful, innovative, and juicy for mobile payments through the NFC method, are available with zero adoption due to a lack of customer education.

The assumption taken here is that readers are fully versed in mobile payment through a mobile wallet, or mobile money, which is a solution that lets people conduct banking (not necessarily backed by banks) transactions with ease, directly from their mobile device, in a secure and convenient manner. In case the reader needs detailed information or deliberation on any part, please feel free to get in touch directly.

Payments With NFC

With NFC, any device can be a payment device. How smart it would be if you just tapped your NFC card, any handphone (with a sticker on the back), your smart watch or phone, or any item with a small sticker on it. It introduces a better way to add secure payment capabilities based on NFC to any object, like car keys, or to things you wear, like wristbands, jewelry, and other fashion accessories.

Mobile PayTo pay for your tea, coffee, toll gate, buying any soda or water from a standalone dispenser machine at the airport, etc., or even when you are just picking up any grocery item.

Payments can be made by just tapping any NFC-enabled device or with an NFC sticker. Imagine the time needed in a queue at a shopping mall, railway station, or parking lot when you don’t have NFC and when you have this magic in your hand. NFC can play a major game-changing role, especially in micropayments. NFC payments are fairly secure and as straightforward to deploy as any other mobile app using standard technology.

NFC or any similar technologies are neither new nor revolutionary innovations; they have existed on this planet for decades, but not all of us are aware of how to make use of them for payments (okay, 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 a low adoption rate. NFC is an easy and simple concept, but some times it gets oversimplified along with the same reasons for payments under mobile, or a simplified version of mobile payments, about which every single company on this earth is talking these days, and it’s true for every single company.

FinTech was forced to redesign the banking model. Thus, a new banking model was introduced, which created a distinction between ‘banking services’ led by fintech and ‘banking services’ led by banks that used customers to manage their cash and liquidity requirements. 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 the future of finance in Africa look like in 2025?

Technology Combo – NFC and …

Using a combination of technologies like mobile devices, bitcoin, and blockchain, fintech companies are building an Internet of value. The question then is: what does this mean for financial institutions, governments, and citizens? Meanwhile, disruptive new entrants (almost all of them coming from outside the financial services industry with almost zero experience) continue to gain ground. How should Africa’s financial firms respond to these myriad challenges?

nfc-1Bitcoin is a bit complex when it comes to cashless payment methods. Having a full understanding of the business and technologies, we can now get some ideas on how to marry both of these to gain some cost and speed effectiveness. Near-field communication (NFC) can use a contactless chip in a mobile phone or a small sticker at the back of the phone.

NFC can be used for all kinds of applications, including contactless payment at POS and also P2P payments up to an extent. The Internet of Things is all about machines transacting with machines. Unfortunately, with the way the bank system works today (slow and outdated machines with no or zero innovations), we need to reinvent financial technology and create an Internet of Value to work with the Internet of Things.

The challenge to NFC is the cost of devices (handsets and receiving devices). Some brands do not take the time to invest fully, as Apple does. To demystify the new technology as well as highlight its benefits and security, some explanation is required. So first-movers’ issues are sometimes addressed by Apple, making them seem greater. Owning core software and hardware means companies like Apple have more control and the ability to rectify issues and manage perception.

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

Although PayPal has done well in other forms of mobile payment, EcoCash Zimbabwe has been able to launch commercially successful NFC services that I am aware of. At the same time, NFC is a remarkably intuitive technology to use, and many thought it would indeed spread like wildfire as it became available for payment transactions. The reality, though, is that adoption rates are steadily increasing.


Information Security 

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

This set of rules and security standards is called the Payment Card Industry Data Security Standard. To add security for both subscriber and merchant (yes, at business cost), as in any financial transaction, that’s the golden key. Customized NFC devices for closed-loop payment are very cheap, but in terms of security, who will answer?

For banks, NFC payments do not make much business unless any bank is interested in micropayments and collection, as most banks want to do high-value transactions. Along with value banks, they always want to be in 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.
  • Two devices read and write to each other using NFC, touching two handsets together to transfer data like contacts or photos, normally called “two-way communication.
  • Device reads and writes to an NFC chip. Touch and go concept, like in the Apple case, where touching an Apple NFC device on an NFC reader or NFC POS to debit a wallet or card for mobile payment balance is written to the card normally.
  • Make contactless transactions, including those for payment, access, and ticketing.

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

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

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 a “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.

To Invest in Payments Channel or No

Banks 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.NFC Patments.png

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. FinTech, through BaaP and BaaS golden keys, has gotten a global industry leader certificate and is now empowering NFC payments in bank domain and non-bank domain financial institutions to lead in the future of mobile financial services.

The main drivers behind the success of mobile money are the explosive growth in the number of mobile devices and the fall in the cost of computing power, which have lowered the barriers to new entrants in this field. Mobile money (m-money) is quite versatile and can support a variety of services, in particular person-to-person (P2P) money transfers, which are of significant value for emerging economies. 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. The year 2012 turned out to be a very busy year for mobile money, with a number of articles in the news and companies like Starbucks announcing their mobile money plans each week. The terms “m-money”, “mobile financial services,” and “e-money” are used quite often in technical reports and in the media.

Time has now come for banks and other entities with an interest in financial service provision, to step up as one single team, exploit technology and leverage on existing MNO infrastructure to acquire customers, enrich use cases, lower costs and increase revenue especially in markets where regulators (such as reserve banks) play a dominant role. The real credit for revolutionizing the mobile payments arena, would have to go to Google’s Host Card Emulation (HCE). This was when mobile payments really cut loose.

The success of Apple Pay was backed by the payments industry to boost contactless technology and, as a result, Apple has successfully created a desire for mobile contactless payments amongst consumers.

Sign-tConclusions- 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% of men hold bank accounts, compared with 50% of women.

It speeds customers and sellers through the checkout process and is proven to increase payment instrument speed. The answer may be that NFC fits in here to reduce average purchase amounts in transactions. What are the implications of an NFC-based mobile payment solution? Is it going to change the world, be a significant “win,” or be a nice hack? NFC-based mobile payments can be supported globally and will give financial institutions and partners greater choice in offering consumers secure ways to pay with smartphones.



4Food for thought – My next post will be around financial inclusion or in my language “Finclsuion”. Will rising innovations in mobile money domain will help to close the financial gender gap, will it help to help women in particular which are more vulnerable to increased financial burdens, like the ones that arise when sick-minded men abandon their responsibilities of providing basics for their families or to them. The problem is compounded by the largely close-minded or without an apology to say sick-mind societies that bars women from owning lands, properties or even savings etc.

Hash Tagas : #payments, #mobile-payments, #money, #mobile, #Banking, #NFC, #Technology

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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


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