NFC: all about wireless payments 

Looking for your wallet, handing over some cash and checking the change back or digging for coins to pay the exact amount: we all know the daily grind of trying to quickly pay for the much-needed cup of coffee or the after-lunch pack of gum while the people in line behind us are getting impatient. Soon this hassle will be a thing of the past thanks to contactless payment, a technology that has made its debut via bank cards, and is now quickly spreading to smartphones and connected watches.  

NFC or Near-Field Communication

How do contactless payments work? The system is based on the so-called NFC (Near-Field Communication), a short-range, high-frequency wireless communication technology that combines an integrated chip and an antenna to exchange information between devices when they’re brought within a few centimetres (up to 5 cm) of each other. A simple tap of your card, smartphone or connected watch to the store’s payment terminal is enough to pay instantly for small purchases. The technology is secure and convenient: no bank code to enter, no change to give back.

The system is similar to miniCASH. Launched in 1999 in Luxembourg and phased out in 2011, the electronic wallet was limited in the amount that it could hold and required users to top them up at regular intervals. In comparison, contactless payments are directly debited from the user’s bank account.     

According to specialists, contactless payments are here to stay. The method has the following advantages:

  it is secure and convenient; the check-out is faster;
it doesn’t require the customer to carry money nor the retailer to manage cash, thus making theft that much harder.

And in Luxembourg?

In Luxembourg, you can get an NFC-enabled credit card. The contactless credit card is similar to any other credit card except for the contactless symbol on the front and, of course, greater flexibility when it comes to paying. You can use your contactless credit card to pay for whatever amount but for purchases lower than € 25 – the limit may change from country to country -, no PIN code is required. For purchases higher than € 25, you need to enter your PIN.

Are contactless payments with your smartphone or connected watch possible in Luxembourg? No, not yet. Apple Pay, with its digital fingerprint reader, unique device account number and key used to generate dynamic security codes unique to each transaction, is available since mid-July 2015 - but only in the United Kingdom. Its direct competitor Samsung Pay, which is compatible with all terminal payments, even those without NFC reader, is not yet available in Europe. 

But it is only a question of time: the future of payment is fast advancing and the days of searching for cash in your pockets are counted…

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