Near-field communication (NFC) is a short-range, wireless connectivity technology. It enables NFC-equipped devices to communicate and share data when they are close (less than four centimeters) to each other. It works similarly to Bluetooth and Wi-Fi, but there exist differences in range and underlying technology. NFC only works over very short distances. It makes use of electromagnetic radio fields to make connections; Bluetooth and Wi-Fi are based on radio signals.
Use of NFC Tags
There are four popular applications of NFC – (a) touch and confirm (passive mode), (b) touch and go (active mode), (c) touch and connect (P2P mode), and (d) touch and explore.
Touch and confirm is commonly used for credit card payments where a device is used to read data from the chip in a credit card. Tap points that are found on public transport turnstiles or billboards use active mode application of NFC. The P2P (peer-to-peer) mode lets users transfer data without the hassles of Bluetooth connectivity that forces users to first select a device and then enter a PIN associated with that device. Touch and explore lets users discover the capabilities of a device.
This technology is popular in Japan, where several large banks are using it for payment services. Google Wallet is another popular NFC-based service. Many new credit cards carry an NFC chip inside them. A large number of modern Android smartphones, especially those made by Samsung, are NFC-capable.
Apple has not endorsed NFC. It is working on a separate technology called Bluetooth Low-Energy (BLE). In a recent update to its Wallet, Google has warmed up to non-NFC devices' users. It is no longer mandatory to have an NFC-capable device to use Google's payment service.
Despite these high profile setbacks, the technology is far from being dead. There is a huge infrastructure available; far more extensive and widespread than for competing alternatives. Several large telecom operators – KDDI, NTT Docomo, and Softbank – already offer NFC payment services.
The upward trend in NFC growth is unmistakable. This has led to research in more uses for this technology. Blackberry maker Research-in-Motion is already developing NFC for enterprise use; where it will complement traditional security systems. Governments across the world are testing this technology to improve public transport. France is currently leading here. NFC promises to make shopping experiences more personalized. The University of San Francisco already uses an NFC-based system that lets students building access and make payments. Alaska Airlines is thinking about replacing boarding passes with NFC. Dubai Metro uses NFC for their Nol Cards and have recently tied-up with Du and Etisalat to offer NFC SIMS to enable Mobile payment.
Businesses and NFC
All these developments pose a unique opportunity for businesses; weather in London or Dubai. As NFC will become more widespread businesses will have to switch to it. Those who will embrace this technology in time will be better prepared to tackle future challenges.