What technology enables short-range two-way communication for contactless payments?

Near Field Communication (NFC) is the technology that enables short-range two-way communication for contactless payments. NFC operates over very short distances, typically just a few centimeters, which makes it particularly suited for applications like mobile payments. When a user taps their device (like a smartphone or a contactless card) against a payment terminal equipped with NFC technology, the two devices can quickly and securely exchange payment information.

This short-range capability not only enhances security by minimizing the risk of interception compared to other wireless communication methods but also provides convenience and speed at the point of sale. Users can complete transactions simply by bringing their device near the reader, streamlining the payment process significantly.

While Bluetooth, Wi-Fi Direct, and Infrared also facilitate communication between devices, they do not have the same focused application in contactless payments as NFC. Bluetooth and Wi-Fi Direct are generally used for longer-range data transfer, and infrared is less commonly utilized in modern payment systems due to its limited range and slower connection speeds compared to NFC.