Near Field Communication is abbreviated as NFC and it is the technology that uses radio waves for the transmission of data between two devices and it is a wireless technology that provides a contactless payment facility to the user. NFC is used in Smart Cards, e-wallets, Smart Ticketing, Medicine and Healthcare, etc.
What is NFC (Near Field Communication)?
NFC full form is Near Field Communication. A short-range and wireless technology that is used for making a tablet, smartphones, payment cards, wearables, and many more devices even smarter for use is known as Near Field Communication (NFC). For connectivity purposes, NFC is the ultimate. NFC provides us with the facility of transferring information so quickly and easily even with a single click between devices. This transferring information can be paying bills, researching paper sharing, downloading coupons, bill payments, exchanging business cards, authenticating credit cards, enabling physical access, and many more.
Near Field Communication (NFC) uses radio waves so that devices can communicate with each other.
NFC is a type of technology that provides the facility of contactless payment to users. NFC technology is used so that two devices such as a user and the payment gateway can communicate with each other whenever they are bought together within a few distances of centimeters.
History of NFC
Near Field Communication allows consumers to communicate with retailers and each other for sharing information or paying bills through their mobile phones.
Google Wallet (NASDAQ: GOOG) and Apple Pay (NASDAQ: AAPL) are payment services provided by NFC.
In the Amazon Echo (NASDAQ: AMZN), NFC is still not available. But this could be a useful place for using NFC.
Near Field Communication technology used radio-frequency identification (RFID). For decades, RFID has been used by consumers for tracking and tagging purposes within a store. In 2004, NFC started gaining steam when Nokia (NYSE: NOK), Philips (NYSE: PHG), and Sony (NYSE: SNE) tied together for creating the NFC forum. This NFC forum is committed to making it possible to provide the facility of NFC in every aspect of life.
In 2007, Nokia released the first NFC-enabled phone and in 2010 more than 100 pilot projects for NFC had been launched by the telecommunication sectors.
In 2017, a system was designed by New York City’s Metropolitan Transit Authority (MTA) that provides the service to riders to pay for their subways through NFC technology.
How Does NFC Work?
When two devices are close to each other, then the NFC allows them to communicate with each other wirelessly. NFC is considered the subset of RFID and RFID stands for radio-frequency identification. And it is the technology used for things identification using radio waves.
In the early 2000s, NFC was introduced and for communications in close ranges, it uses a specific RFID frequency (13.56 MHz, to be exact). And till now, card identification for getting access to some places such as private garages, and office buildings are considered one of the common applications of NFC. But apart from these, NFC is also used to power the one type of payment called contactless payments. Contactless payments are those types of payments that do not need any physical contact between the payment terminal and a device. It means people can make payments by just holding up their mobile devices.
In an NFC payment, you tap or hover your device to pay.
NFC technology starts working when contactless payment is started. The specific frequency we have told above is used by smartphones and the NFC-enabled reader for encrypted information transmission back and forth to each other so that transactions can be completed. This whole process just takes seconds.
Speed is also one of the main advantages provided by the NFC. NFC payments provide us with a mechanism that is much faster than cash and NFC payments take only a fraction of the time of chip card transactions and magstripe(magstripe cards have actual stripe on the card’s backside, and modified magnetic particles of the iron-based is used for data transmission between receiving terminal and the card).
Applications of NFC
Applications of the NFC are given below:
- Smart Cards
- E-wallet (payment using a smartphone)
- Smart Ticketing
- Medicine and Healthcare
- Manufacturing
- Theft control
- Smart Inventory Management
- Logistics and Shipping
Examples of NFC
Following are some examples of NFC technology:
- NFC is used in mobile payments like Apple Pay and Google Pay.
- Payment using a transit card.
- For ticket redemption in concert or theatre.
- It provides access authentication for offices or doors.
- It is used in unlocking car doors or rental scooters.
- It provides the facility of device pairing in smartphones by tapping them together.
- It is used for tapping a smartphone to the router or the internet gateway so that it can provide an automatic setup facility for Wi-Fi connectivity.
- On social media, it used venue or location check-in to alert friends.
- Connecting to the radiator using a mobile phone so that it can configure the setting of temperature and schedule.
- Connecting to industrial equipment using a smartphone or tablet for accessing a more complex control panel.
Is NFC Secure?
When we talk about payment from a mobile device then this thing makes some people feel uneasy. But if we talk about NFC payments then NFC payments are considered very secure payments in fact NFC payments are more secure than magnetic-stripe cards(debit/credit cards).
Magnetic stripe card data is static and NFC payment data is in the encrypted form data of NFC transactions is dynamic means this will change constantly.
Now let us take one example for clear understanding, we will take the example of apple pay and the tokenization technology used by this for securing bank details.
- After taking your credit card picture and loading it on your phone. The details are sent by apple to the bank or network that issued the card
- Then the bank details are replaced by the bank or network into a randomly generated number series which is called a token.
- Now this randomly generated number is sent to the apple back(ultra-wideband).
This proves that fraudsters can not clone the account details present on your phone into some valuable thing.
NFC payments are very secure. Apple’s fingerprint technology touch ID is used for the protection of apple pay. So no one can easily get your data even if your device is stolen by someone. Nowadays various methods of NFC payments are available in the market. Apple pay is available for iPhone users and google pay and Samsung pay are there for android users. And apart from these, some chip cards are also set up for “tap to pay” or contactless payment.
How to Pay with NFC?
If you are a business owner, then it is worth making familiar yourself with the answer to the question of how to pay with NFC as a customer.
Paying via phone setup is very easy. Nowadays mostly every mobile wallet reads the numbers given on the credit cards(which become encrypted) by the cameras of the mobile phones.
How to Accept NFC?
There is a requirement of setting up the NFC-enabled reader for accepting NFC mobile payments at your business. It is not extremely expensive. NFC payments and EMV both are accepted by the chip reader and the square contactless and they are available at just $49.
Benefits and Limitations of NFC
Following are some advantages of NFC technology:
- As compared to other wireless protocols it allows a very simple new connection setup.
- It allows access to back-end data simply.
- For different payment processors, it provides increased operational efficiency.
- It is easy to use by consumers to pay for goods.
- As compared to the traditional credit card payment system, it provides more security.
- It enables users to select dynamically from multiple cards.
Some of the limitations of NFC technology are given below:
- It is slower as compared to other protocols.
- Not so good for Tracking locations.
- It has become limited in usability for all the apps that need sensitive data on mobile phones.
- Like QR, NFC is not so easy to integrate into a venue ticketing app.
- It allows communication within a short distance only.
Difference between EMV and NFC
There is a tiny computer chip in the EMV credit cards and this chip has more sophisticated security-related features in comparison to magstripe cards. Processing of EMV credit cards is different from the magstripe cards as they are dipped in place of swiped. NFC enables the “tap to pay” for the customers as it is set up with RFID technology. There is no need for inserting NFC cards into payment readers.
For initiating the transaction customers are just required to hover or tap their card on the payment readers.
In the long and short, if we talk about the difference between NFC technology and EMV technology then both technologies provide us with a way that is more secure for processing payments. They both are accepted by chip readers and square contactless.
Differences between NFC and Other Wireless Technologies
NFC is considered as the complement of different wireless technologies such as Bluetooth, UWB(ultra-wideband), RFID, QR Codes, and EMV (Europay, Mastercard, and Visa). NFC payments are considered best for transaction authentication, door unlocking, and other wireless connection configuration.
- Readers are used by RFID and these readers are used for scanning ID tags that are available at long distances. This is considered best for use in between the more passive tags and more active readers for unlocking doors, reading toll tags, passport authentication, and inventory scanning.
- Equipped payment terminals and chips are used by EMV for making credit card transactions. It also provides the authentication of transactions but it is not dynamic and is not interactive as NFC, which provides the features of contactless payments.
- Bluetooth provides a more connection range in comparison to NFC but it is not as secure as NFC. It provides the best functionality when it connects the peripherals like headphones to the computer or mobile device.
- UWB is one of the new technologies and this technology uses pulse patterns for keeping the interference in other wireless devices also. This will work at very low power. This allows for fast data transmission without losing the accuracy of the data transmission.
- Users activate the QR code by scanning an image with the camera of their smartphones in place of a simple tap used by NFC. QR codes are easily generated by the business for allowing customers to retrieve product manuals, promotions, and web pages from the printed tags of the business. QR codes are considered less complex and can be included in the mail very easily and without any dependency on google or apple specific functionality integration
Now if we talk about the detection range, then NFC can find whether the device is next to the other device but if we see Bluetooth detection range it can identify within the room object.
Conclusion
- NFC full form is Near Field Communication. A short-range and wireless technology that is used for making a tablet, smartphones, payment cards, wearables, and many more devices even smarter for use is known as Near Field Communication (NFC).
- Smart Cards, e-wallets (payment using a smartphone), Smart Ticketing, Medicine, and Healthcare are some of the applications of NFC.
- Some of the benefits of the NFC are security, provides an easy way of payment, etc.
- There are some limitations of the NFC like it will not provide a good location tracking facility, etc.
- NFC is considered as the complement of different wireless technologies such as Bluetooth, UWB, RFID, QR Codes, and EMV (Europay, Mastercard, and Visa).
