Commercial Insights

EMV vs. NFC Terminals: What’s the Difference?

Wondering if it’s time to upgrade to an NFC-enabled terminal? Learn more about the benefits of tap-to-pay technology for merchants.

If you own or manage a brick-and-mortar business, you’re probably already aware that point-of-sale (POS) technology has changed rapidly over the last decade, starting with the adoption of EMV technology.

From better protecting card payment data to preventing payment card fraud, both EMV and NFC terminals can help your business run more smoothly and efficiently while improving customer experience. Before you consider whether or not to upgrade your POS terminal to the latest technology, it’s helpful to understand the differences between EMV and NFC terminals.

What’s the Difference Between EMV and NFC?

EMV is more commonly referred to as chip and PIN technology — a nod to the tiny computer chip embedded in a credit or debit card that’s intended to be used in place of the card’s magnetic stripe to authenticate payment.

NFC, meanwhile, stands for “Near Field Communication,” and it allows for communication over a very short range — in this case, between the terminal and the payment card or payment device. More commonly known as contactless pay or tap-to-pay, NFC is a newer method of payment authentication than EMV. Unlike EMV, NFC technology isn’t limited to a credit or debit card: your customers can also use their smartphones or smartwatches to make payments from their digital wallet.

Compared to the traditional swipe and pay method, both EMV and NFC technology offer added payment data protection and fraud-prevention measures. Each transaction with an EMV or NFC card generates a unique code that can’t be replicated, so fraudsters can’t “clone” a card. At the same time, when your customers pay with a chip or by waving their smartphone, the technology doesn’t transmit the sensitive card number, expiration date, or three-digit security code to the merchant accepting the payment.

What this means for you, as a small business owner, is potentially reduced risk. The latest POS technology is designed to help reduce payment fraud and mitigate payment acceptance risks.

The Benefits of Upgrading to an NFC Terminal

You might be asking, "If my terminal already supports EMV technology, do I really need to upgrade to NFC?" To answer that question, let’s take a look at the added benefits of NFC.

For starters, contactless payments can help you keep your customers happy. Because NFC allows your customers to quickly wave their card or device for payment, they don’t have to “dip” their chip and wait to input their PIN. This can cut down on long lines during peak business hours, leading to a smooth retail environment that reduces customer frustration.

NFC also lets you meet customers where they are and pay with their smartphone or smartwatch. According to Elavon, the company that supports NFC technology for Regions Bank merchant customers, contactless payments have grown by 150% in the U.S. since 2019. According to a study by eMarketer, 43.9 million people used Apple pay in 2021, and 25 million used Google Pay. These numbers are expected to rise further in the years to come. By 2025, it’s estimated that over half of all smartphone users will take advantage of contactless pay technology.

Last but not least, small business owners who use Elavon’s payments technology might be able to lower their card acceptance costs, too. For many companies, credit card acceptance costs are the second highest cost after payroll. Finding ways to reduce credit card acceptance costs can mean big savings for your small business. Elavon’s Payment Optimization Service has helped clients realize an average of 0.4-1.5% decrease in their payment acceptance costs.

Finding the Right POS Technology

For brick-and-mortar businesses, POS technology shouldn’t be an afterthought. For many customers, a seamless checkout experience is an important part of their overall experience.

The days of using a magnetic strip for credit and debit card sales will soon be as much a relic of the past as cash-only sales. As more and more customers see the benefits of NFC technology — from increased security to clean, quick, and hassle-free purchases — the more they’ll prefer contactless purchases. That means they’ll come to expect retailers to accept their preferred form of payment.

From contactless pay to mobile credit card processing, learn more about the latest payment solutions available to small business owners.