Q&A: Delivering a Next-Generation, Multi-Service Contactless Payment Experience

The scale and diversity of the modern payments ecosystem creates endless opportunities for innovation, to encourage adoption, and enhance the user experience. However, this brings with it a whole host of new challenges and threats for payments stakeholders to navigate.

NFC Forum has recently published a whitepaper on the evolving payments landscape, titled ‘The Transformative Roles of NFC Technology and NFC Forum in the Rapidly Evolving Payments Stack’. As well as charting these roles in shaping contactless payments, the paper also looks at the growth potential for NFC technology and the collaborative work of NFC Forum to deliver a next generation, multi-service payment experience.

In this blog, Wolfgang Meindl and Christophe Rabaud, Chair and Co-Chair of NFC Forum’s Retail and Payment Special Interest Group (SIG) share their perspectives on how the payments ecosystem has changed, shine a light on current trends and opportunities, and call for closer industry engagement in NFC Forum as it shapes the future of this foundational technology, enabling interoperability and prosperity for all.

1. How have you seen the payments landscape evolve in the last couple of decades?

WM: The number of ways we pay, transfer money, and conduct our daily financial transactions has increased exponentially. Furthermore, the rise of digital platforms, the global spread of smartphones, and increased internet availability have given more people than ever before access to banking services. This naturally leads to increased demand for digital and device-based payments.

We saw exactly this in the NFC Forum’s 2024 Contactless Usage and Adoption Study which declared that, for the first time, a vast majority of consumers now prefer to use a NFC equipped smartphone or wearable to pay rather than a physical card or even cash. Consumers rated NFC payments as most secure, convenient, reliable and easy-to-use method, which is a remarkable success of NFC technology in the payments industry.

But this device-based shift is not exclusive to payments. More sectors are being incorporated into multi-service offers, with physical and logical access control, loyalty schemes, identity verifications and more all now looking to harness the power of NFC-powered mobile devices. Standards, testing, trust, cooperation, and a common understanding are therefore crucial to create payments stacks that provides a seamless user experience and also supports the incorporation of new use cases and services.

2. What role has NFC Forum played in supporting the contactless payments ecosystem?

CR: To echo Wolfgang’s point here, NFC Forum has participated in the collaborative effort to develop standards later utilized by the payments industry. The Forum’s specifications have helped to provide the infrastructure required for the evolution of contactless payments, promoting global interoperability and security through its NCI interface for digital wallets.

Looking back to the beginning of contactless interactions, in the 1990s, the ISO/IEC 14443 standard provided universal tap and go interoperability with the payment terminals of any compliant manufacturer. This created a framework for interoperability and security within the card payment landscape and NFC Forum specifications took this one step further, adding innovative contactless interface capabilities that allowed devices to perform multiple, related functions. Enabling devices to operate as both a reader and as a card device has enabled new use cases and device form-factors to come to market, while remaining interoperable with existing architectures.

Today, NFC Forum continues to contribute to and collaborate with the payments ecosystem, helping leaders meet the growing user demand for device-first solutions.

3. What are the biggest trends and opportunities in the payments industry, and what role does NFC technology play?

WM: Today’s global digital payments ecosystem is more interconnected and interoperable than ever before, yet regional disparities remain relative to technology access, digital literacy, and personal preference. Meanwhile, the ecosystem continues to march forward. Open banking, digital currencies and Central Bank Digital Currencies (CBDCs) deployments are gaining traction, neobanks continue to take market share, and the need to advance security in the face of rising fraud is challenging all actors. NFC technology is perfectly suited to provide the highest level of convenience, ease-of-use and trusted security.

Varying regional factors are also shaping each market’s approach to payments. In APAC, for example, users have rapidly shifted from cash to digital wallets thanks to the availability of app-based solutions such as AliPay in China or Global Payments in the Philippines. In the United States, however, the pace of digital wallet adoption has been less marked. Finally, the European Central Bank is driving forward the Digital Euro project with high intensity, adding digital cash as an alternative to traditional bank notes for both online and offline transactions.

With all these options, and regional differences in mind, one of the key priorities for NFC Forum is to leverage its global membership to create standards that promote harmonized ecosystems which also remain flexible to meet unique local and regional needs.

4. How is NFC Forum contributing to the future of contactless payments?

CR: A key part of NFC Forum’s value comes from its global membership. Bringing together hardware manufacturers, software providers, end users, payment service providers and others provides a unique opportunity to harmonize the ecosystem and create seamless, secure payment experiences that work for everyone.

The NFC Forum Certification Program is helping to ensure millions of NFC products from countless different manufacturers and service providers can interoperate with one another. The program confirms that devices are Certified Compliant with NFC Forum Specifications, setting a foundation of consistency across NFC implementations for the entire integrated digital world.

This has given members and technology adopters the baseline upon which they can develop their own use cases and applications in line with the dedicated specifications and requirements of the payments market.

Interested in participating in the NFC Forum and the work of its Retail and Payment Special Interest Group? Visit our website to see how you can get involved.