The earliest NFC deployments in Japan and South Korea focused on payment from a stored value purse, both in public transport and in shops. Many of the articles that have been written about NFC associate it almost entirely with payment. And yet this is the application that has probably taken longest to reach mass penetration: outside Asia there is already much higher usage of NFC in the media, in retail and in transportation than for paying for goods in shops.

This chapter looks at the different ways in which we can use NFC for payment, and the reasons for the slow rate of take-up.

Accounts and instruments

There are four main modes of payment: prepay, immediate payment, post-pay and peer-to-peer.

• Prepayment involves the use of cleared funds at a specific retailer or for a specific purpose (e.g. an insurance claim or paying for travel expenses). If the funds can be used for general purposes then they are normally classed as a deposit and can only be held by a bank.

• An immediate payment moves money from the user’s account to that of the retailer or service provider more or less immediately (in some cases the final settlement may take one or two days).

• Post-payment allows the user to enjoy the goods or services for a period before having to pay.

• Peer-to-peer payments move money from one person’s account to another’s.