In today’s smart era, where everything is happening at the touch of a fingertip, the banking and financial sector is no exception. One of the revolutionary solutions in modern fintech transactions is Near Field Communication (NFC) technology. It enables fast and secure data exchange between two devices within a very short range (typically within 4 centimeters).
NFC technology has made touchless payments and digital banking more seamless and secure than ever before. Below is a detailed discussion on the use of NFC in the banking and financial sectors, as well as its future potential.
Touchless or Contactless Payment Systems
One of the most prominent uses of NFC is contactless payments. Many globally renowned banks, financial institutions, fintech service providers, and international card networks (such as Visa, Mastercard, American Express, etc.) offer this feature. Customers can complete a payment simply by holding their card or smartphone near a POS terminal—no PIN or signature is required (up to a specified transaction limit).
Mobile Wallets and Smartphone Payments
Through NFC-based platforms like Google Pay, Apple Pay, and Samsung Pay, users can link their debit or credit cards and make payments directly via smartphones.
Tokenless Transactions at ATMs and Banking Booths
Modern ATMs are increasingly supporting NFC-based cardless transactions. In the future, even underdeveloped countries may adopt this "Tap & Withdraw" feature, which represents a significant breakthrough in customer security. For instance, a private commercial bank in Bangladesh—The City Bank PLC—has recently added and activated NFC readers in their ATMs. This allows customers to simply tap their NFC-enabled phones to quickly access services, eliminating the need to physically insert cards. It is expected that other banks will gradually introduce or expand this feature as well.
A Virtual Alternative to Physical Cards: NFC Virtual Cards
Many banks now issue virtual cards that can be saved in mobile wallets and used via NFC. This eliminates the need for physical card-carrying, enhancing cardholder security. From a cost perspective, virtual cards are also significantly more economical than physical plastic or metal cards.
Security and Encryption in Transactions
NFC technology utilizes data encryption and tokenization, significantly reducing the risk of hacking or data cloning. The actual card details are never sent directly to the POS machine. Instead, a temporary encrypted token is transmitted—making this a highly secure payment method.
Faster Service for Merchants and Customers
NFC-enabled POS machines can process transactions in just 1–2 seconds. This reduces service time for businesses, increases customer satisfaction, and boosts transaction volume. Another major benefit is that for small-value transactions, no PIN is required—saving time and allowing businesses to serve more customers quickly.
Conclusion: NFC technology is not just a method of paying bills—it’s a powerful combination of speed, security, and customer convenience. As the rise of digital financial services continues across the globe, including in Bangladesh, NFC may very well be one of its driving forces.