What is NFC? Near-Field Communication Technology Explained

Contactless payments have significantly increased in popularity in recent years. Over 38 million users transact with Apple Pay in the US. Industry experts expect this figure to reach 102.2 million by 2023.

This growing trend is mainly due to NFC payment technology. NFC is a protocol for short-range wireless communication between two devices. This technology enables devices to share data within a few centimeters. 

Besides contactless payments, various apps and services use NFC for gaming, sports, social media, and many more.

Read this article to learn how NFC connections work, its benefits and limitations, and its evolution. Let’s start.

NFC: What It Is and How It Works

NFC is a short-range two-way communication between two devices. For NFC devices to work, they require three essential elements:

• NFC Tag
• an antenna
• a reader. 

The NFC tag is the transmitter that sends a signal at the standard NFC frequency. The receiving device’s antenna picks up the signal. The receiver NFC will then interpret and validate the data to complete the exchange.

The figure below shows how NFC works through data transfer between a reader and a tag. 

NFC technology works depending on the mode of operation. There are three modes:

• Reader/writer mode: The devices use NFC tags to communicate in this mode.

• Peer-to-peer mode: Data exchange between two devices is through Bluetooth pairing or WiFi link setup.

• Card emulation mode: Examples include contactless payments using credit and debit cards.

NFC provides convenience to users. With this technology, there is no need to manually enter a password or pair devices. Users can set up WiFi and Bluetooth devices with just a touch. 

Take a closer look at various NFC technology devices: 

• Smartphone - Most mobile phones on the market have NFC support features.
• Credit and Debit Cards - Cards are embedded with NFC chips to perform contactless payments.
• Smart Watches and Fitness Trackers - Wearable devices also use NFC technology.
• Door Locks and other smart home devices - NFC is utilized for home security because it is easy to pair and set up.

Integration of NFC into devices has become popular as many industries use NFC technology in their operations and products. 

NFC Use Cases - Contactless Transactions

NFC technology makes the users' day-to-day lives easier through contactless payments, but there are other uses that you might not be aware of.

Here is a list of NFC uses across industries: 

1. Mobile Use for Cashless Payments

The most common use of NFC is through cashless payments. It provides users with mobile wallets and digital storage of transport tickets through mobile phones and cards. 

Retail stores, restaurants, and transportation systems use NFC as payment channels.

2. Access Control for Secure Identification

Institutions and organizations utilize NFC Technology for their access control systems for secure identity authentication of their users. 

Offices use NFC for their employees' time and attendance recording. NFC is also embedded in door badges to limit authorized access to certain places.

3. Smart Home Technology Setup

NFC tags take smart homes to the next level. It can automate houses with just a single tap on a mobile phone. NFC controls lights, door locks, track chores, washer and dryer timers, and many more.

Check out this video on different ideas for using NFC in home automation:

4. NFC for Data Sharing

An easy way to transfer data between two devices is through NFC. It shares photos, videos, contacts, and other information.

5. NFC for Marketing and Advertising

NFC campaigns use marketing materials that include NFC tags/stickers. With this, users can tap ad materials and learn about the product. Posters, flyers, billboards, and product packaging use NFC for this function.

6. NFC for Healthcare

Healthcare services can use NFC for patient identification of medication and medical monitoring.

Another application in the Healthcare industry is product verification on pharmaceutical products.

Like any technology, NFC also has its limitations. Continue reading to learn the benefits and limitations of NFC connections.

The Benefits and Limitations of NFC

NFC already have various uses, but there may be more use cases to discover soon.

Here are the benefits of using NFC with how it is today:

1. Convenient: One of NFC's most significant advantages is convenience, especially in making cashless payments.

Additionally, NFC for cashless payments is easy to understand and use. A perfect option even for non-tech-savvy people.

2. Versatility: There are many other uses for NFCs – from mobile app integrations to marketing, security, and more. This makes NFC a popular technology in different industries.

3. Security: Since it requires proximity, NFC transactions are difficult to exploit for unauthorized access. For the same reason, hackers have difficulty intercepting data when using NFC.

4. Compatibility:  Almost all Android devices have NFC support, and Android OS is still the top mobile operating globally. This makes it easier for businesses to adopt NFC in their products and processes.

5. Low Power Consumption: The power required to use NFC is very little, making it easy to integrate into small, battery-powered devices.

While NFC has a lot of benefits for its users, there are also limitations to using it, such as:

1. Limited Range

Devices must be very close when using NFC. While this also counts as an advantage, NFC’s close proximity limit can be a downside. This is especially true in times of enforced social distancing.

2. Limited Data Transfer Rate

Another limitation of NFC is the limited data transfer rate. This closes NFC functions to simple authentication and is not ideal for any recent form of file transfer or complex transactions.

3. Device Theft

NFC transactions are almost impossible to intercept, but it can be problematic if the device is lost. If no other security layers exist (like 2FA or fingerprint recognition), unauthorized users can use NFC devices unimpededly.

In the following section, you will learn how NFC technology improved and developed over the years.

The Evolution of NFC

NFC technology has come a long way, and you may be curious about how it came to development.

To brief you a bit, here are the notable events in the evolution of NFC.

• 1800s - Root of NFC

Technologists trace the origin of NFC to Thomas Edison's experiments with radio transmissions.

• 1980's - Beginning of Near Field Communication

NFC is a natural evolution of RFID. The technology allows the user to send radio information to a receiver.

In 1983, Charles Walton invented the NFC and got the first recorded patent for a device utilizing RFID technology.

• Early 2000s - New NFC Technology

In 2002, Sony and NXP Semiconductors invented the new NFC technology. By 2004, telephone companies had started integrating NFC into their products.

• Mid-2000s - Rise of NFC Tags

In 2006, the production of NFC tags started. It stores information for data transactions with an NFC-compatible device.

In the following years, uses for NFC have grown from payment methods to sharing documents. 

• 2010s - Incorporation of NFC into Mobile Phones

Samsung manufactured the first NFC-integrated Android phone in 2010. In 2011, Google Wallet used NFC for mobile payments.

NFC vs. Other Wireless Technologies

Other than NFC, many wireless technologies are on the market. One of them is RFID, which stands for Radio Frequency Identification. Compared to NFC, it has a more extended range and can support minimal actions.

Bluetooth is also a wireless technology comparable to NFC. Unlike NFC, Bluetooth performs better for sharing files with its higher data transfer rate

Wi-Fi is a wireless technology for heavier network communication. Its data transfer rate is many times faster than NFC or Bluetooth, making it ideal for modern wireless internet.

Recent developments in Wi-Fi technology gave it a wider signal reach. Wi-Fi-connected devices can also freely move without interrupting the connection.

Here is a comparison of other wireless communications in terms of range, data rate, power consumption, and applications: 

Conclusion

Near-field communication, or NFC, technology has been widely popular across industries. It is extremely beneficial with a lot more possible usage to explore.

Unfortunately, NFC is still unknown to some users. Knowing about NFC may result in more demand for new ideas on how and where consumers can take advantage of it.