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When NFC is turned on, can you pay for something at a store, or do you need to install a special chip?

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2 Answers 2

If you have an NFC chip (and a Secure Element (SE), but as far as I know all current NFC phones have both) then theoretically you should be able to pay for goods using Google Wallet, however only certain phones on certain networks are supported and it can only be used in the USA.

EDIT: Just to make it clear it may still be possible to pay for goods via NFC using your phone without a SE but if you want to use Google Wallet then you'll need both.

It's feasible that companies could have their own custom payment application where you load credit onto it and have an ID/cryptographic key stored in your device and then pay using that. I don't think this is too likely however because of the security implications of someone else using your ID/key and also, what would the benefit for the merchant be? They now have to support this NFC payment infrastructure and it saves them only a small percentage of money on credit card fees.

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Well, in Germany one food discounter (called "Netto") just started supporting "pay with your Android phone". I did not yet check how they do that, but in this case it requires an app from that discounter. Guess it's not NFC -- but it's "pay with your phone" :) –  Izzy May 13 '13 at 19:03
    
Ah we have Netto in UK as well but I haven't seen this in their shops. It may still be pay-by-NFC but some kind of custom application where perhaps you load credit onto it or something first... Could you link me to a webpage where they talk about it? I spend quite a bit of time looking at NFC security stuff so this could be interesting! I'll edit my answer to try and make it more clear on the restrictions I mention. –  Peanut May 13 '13 at 19:07
    
I doubt it's NFC, as the NettoApp does not request the corresponding permissions. Further, the description reads (excerpt): You tell your user-id, and then confirm the price on your device by entering your pin into the app. Doesn't sound like NFC :) –  Izzy May 13 '13 at 19:19
    
Ah you're right then it isn't NFC. I'd be interested in how they do that, or at least the security of the application. I'll have to find a way to get the .apk from the Play store though since in the UK it won't let me download it to any devices. –  Peanut May 13 '13 at 19:33
    
We're getting off-topic, @Peanut. Check this AndroidPIT article for details (you might need to Google-Translate it from German), for more meet me in Chat :) –  Izzy May 13 '13 at 19:47

Any phone that supports NFC has the necessary "chip" already (that is, the hardware supports that kind of transaction). The crucial factor is the software running on the phone. Unlike with magnetic-stripe and chip-and-PIN credit card transactions, there's no one standard: there are several competing contactless payment systems. Google has Google Wallet (but only in some countries), Paypal has one, Orange (a phone network) runs one in the UK. In addition, most Bitcoin clients (such as Bitcoin Wallet) can use NFC to exchange payment details, but you still need a network connection to actually carry out the transaction.

If you sign up for one of these payment systems, and you install their app on your NFC-capable phone, then you can use your phone to pay at any shop that supports that payment system. There's no extra hardware for you to add to the phone.

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