How Fast Does An NFC Transaction Need To Be?

Written by Evan Schuman
April 21st, 2011

We’ve noticed an interesting separation between retail programmers’ desire to make transactions happen as quickly as possible and what shoppers notice/care about/experience. As talk of near field communication (NFC) mobile payments approaching reality becomes common, we’re wondering how much of the speed conversation is even a little bit meaningful. (Then again, having a conversation about expensive ways to shave off one-fifth of a second from a transaction is bound to have that effect on a guy.)

Some quick context: For years, advocates of NFC (and RFID contactless payment before that) mobile payments have argued that it will be much faster than magstripe. The practical reality is that the time for the transaction processing is pretty much going to be identical—about two seconds—for all of the above.

The real difference in time—and there truly is one—has nothing to do with IT, authentication or any other technological issue. It’s the practical reality that shoppers tend to keep credit and debit cards buried deep within their wallet/pocketbook, whereas they tend to either have their mobile phone in their hand or in a convenient outer pocket, easily within Bluetooth range. That extends the debate from whether a swipe or a wave is faster to whether the entire mobile payment process is easier and faster because of how people use mobile phones.

Against this backdrop, we have a recent blog post from one of the more sophisticated retail tech advocates out there, David Dorf, who toils by daylight as the senior director of technology strategy for Oracle’s retail group. (Quick reality check: Most bloggers who work for major vendors are extensions of that vendor first and a blogger second. Dorf is that rare breed who isn’t.)

Enough of that nice stuff. Dorf’s argument—which admittedly is a trifle bit self-serving this time (although that doesn’t make it not true)—is that NFC’s value is not in merely processing a single transaction. It’s when the next step is taken and it simultaneously handles CRM/loyalty, coupon and payment details.

Dorf reported that Oracle ran some internal NFC experiments and “we found it to be too time consuming to open each of three files to read the contents representing loyalty, coupons and payment. It took roughly two seconds per file, which doesn’t sound slow, but it moves the consumer from a ‘tap’ to a ‘tap and hold.’ To avoid this issue, we combined the data from all three files into a single one, using separators between the data types. This works well, enabling the consumer to simply tap to handle the combined data exchange with POS. But realistically, the data is owned by three different organizations, and they will want their own files.”

Fair enough. Dorf then reported on some glitches encountered during the data-write portion.


2 Comments | Read How Fast Does An NFC Transaction Need To Be?

  1. Miles Thomas Says:

    The real bonus for NFC will be in Chip and PIN countries, where it should be obviously quicker (no PIN to type, at least not every time)

  2. Dee777 Says:

    It is important transaction time, but most important is security. Protect your transaction!

    NFC technology 14 huge security gap= 10 places software, 4 places hardware and more 21 fraud point (point of sale, vending, etc.) very, very, bleed…

    They will be yet national security problems: USA (CIA, FBI and NSA), Europe and China (13.56MHz)… there is a better solution, than NFC.

    Would be wiser possibly to stand on two feet? Think again!


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.