Understanding NFC

Understanding NFC

There’s been quite a bit of buzz lately surrounding NFC, Near-Field Communications technology.  And while it has yet to be widely adopted at this point, NFC is starting to gain traction particularly as power players like Google are using it for applications like Google Wallet that allows users to send money via email, store financial information, make in-store purchases and buy on-line.

How it works

Often referred to as “contactless” as opposed to “wireless”, NFC technology is based on radio waves. In a recent article for Technologyguide.com, wireless computing expert Craig Matthias explains how it works:

NFC’s radio-frequency identification (RFID) technologies have been used for many years in manufacturing, logistics, transportation, and other applications involving short-range, low-bandwidth, point-to-point communications and the tracking of physical objects. Designed for low cost, NFC is generally effective over a distance of only a few (four is a commonly-noted number) centimeters. The current standard, ISO 18000-3, operates at 13.56 MHz. (very low relative to the 2.4 and 5 GHz. of Wi-Fi, for example) and at a data rate of up to 424 Kbps (also very low relative to most other contemporary wireless technologies).

Since NFC is based on RFID technologies, one side of any given connection can be passive – no batteries or other power required, but both sides can be powered (this is called “Active Mode”) for improved reliability and enhanced utility.

Put another way, active devices have the ability to both read and send information. These devices are usually smartphones containing a SIM card or NFC tag. Passive devices containing NFC tags are able to send information but not read it. The communication between these devices is controlled through a secure channel. This communication with encryptions allows for immediate exchange of information. The minimal range required to transfer information is great for security and privacy.

Where it’s used

It’s likely the biggest use for NFC technology will come from consumer financial transactions. The convenience of being able to use your phone as a credit card, authorization for financial transaction, or to securely allow access, like keys, to your home, car, etc. of course, is all very appealing. In stores, customers would simply tap their phone to the NFC terminal and checkout using whichever credit card or debit card they select.

Google and a number of other Android-based devices already support NFC. Overall, adoption has been greater in Europe and Africa, and would likely take much longer in North America because of the infrastructure that would need to be in place to a make a go of it. Large numbers of retailers and financial institutions would need to install and implement the technology, and the time it will take for this to happen on a large scale is not known and certainly won’t happen overnight.

However, according to an article originally published by SAP,  there are many international banks adopting NFC and working with retailers and mobile providers to explore this new market. The Canadian debit network Interac and Royal Bank of Canada have partnered with McDonald’s and Blackberry to demonstrate a contactless application on an embedded chip in a blackberry device. And five Taiwanese banks are to receive approval from regulators to distribute mobile credit cards that are downloaded over the air via SIM cards in NFC mobile phones. These trials and similar demonstrations are popping up around the world.

So while a successful future for NFC technology is still questionable, it’s certainly poised for widespread adoption. We’ll be watching.