NFC or Near Field Communication is the technology that allows people to touch their mobile phones or cards on some terminals in order to activate an action. For instance, this could be used to buy a cup of coffee at the local café by simply touching your phone on the point-of-sale terminal (POS) or opening the doors of a hotel room. This is not science fiction; it is already happening in San Francisco, Seattle, Salt Lake City, and Vancouver. This is the revolution that Google Wallet wants to bring to life with its “mobile wallet” system. NFC technology has generally been underused due to incompatible formats, but Android has taken it by storm…
NFC’s history
NFC has been around for a long time, but it was first introduced in mobile phones by Nokia with the release of the Nokia 6131 in the year 2006. After that Samsung, Sony, Apple, and other manufacturers started to include NFC into their mobile phones, but there was no standard usage for it. In 2011 Google Wallet launched with a clear mission: “to enable users to use their phone as a wallet”. It is now the largest NFC platform in terms of supported terminals and transactions. Other companies like PayPal have also jumped onto the NFC bandwagon a little later, but they are still playing catch up.
How NFC works
NFC is a type of RFID (Radio Frequency Identification) technology that uses electromagnetic fields to transmit data between devices. RFID tags are very small chips that can be embedded in just about anything, including labels, clothing, and packaging. When an RFID reader sends out a signal, the tag responds by transmitting its unique serial number. NFC differs from RFID in that it requires much shorter ranges (usually 4 cm or less) and operates at a higher frequency of 13.56 MHz. This allows for more data to be transferred between devices.
What are the applications of Near Field Communication (NFC)?
NFC is currently used in many different ways with the help of mobiles, NFC cards, NFC stickers, NFC tags, and NFC-Equipped devices. The following are some of the use cases of NFC technology and NFC-Equipped devices.
1. Contactless payment:
Ever since Smartphones started to support NFC, there has been a huge move in the contactless payment market. Google Wallet is leading this effort by allowing users to add any credit card or debit card into their “mobile wallets”. Other players in this field are Mastercard with their PayPass system or Visa with their payWave. Because NFC operates over very short distances of only 4 cm, it is more secure than contactless payment cards that operate at 13.56 MHz (so-called “swipe and go” cards).
2. Access management:
In the hotel industry, NFC tags are a great way to provide access to different types of services or facilities, such as hotel rooms. The NFC system for this purpose offers stored credentials on NFC tags. The tag emits a unique ID number when activated by an NFC device. This allows the hotel to quickly and easily provide access to everyone who has permission, while also restricting access to unregistered individuals. This system has been implemented by several hotels in the US.
Similarly, NFC stickers are also being used for easy authentication purposes. Some universities and offices in the US use NFC chips to allow students and faculty members to enter buildings, swipe ID cards, and log onto their computers with just one touch of a tag that they’ve already attached to their IDs.
3. Inventory management:
NFC technology is also used in inventory management systems. There are two primary ways to use NFC for this application. The first way is to place tags on products that get activated when they are scanned by an NFC device. These tags can contain coupons, links to websites, or other promotional information (such as video content). The second way of using NFC for inventory management is to embed NFC chips into products. This method allows for more data usage, while also reducing the cost of tags.
4. Guest management in hotels:
In long-term guest management, NFC tags play a very important role. These tags are embedded into the door key card and allow guests to check-in at their convenience without needing a front desk. The guest’s room number, billing information, and other relevant data are stored on the tag. When the guest wants to leave his/her room for the day, they simply tap the door with their tag to unlock it.
As far as access is concerned, NFC tags can be used for most doors requiring identification. The cards are usually linked to the guest’s data on your front desk software and allow them entry without needing staff assistance.
5. Manufacturing:
Another application of NFC is in the field of manufacturing, where it is used for tracking parts and resources on factory lines or in warehouses. For example, Walmart has been using NFC technology to track pallet locations since 2012. The company has placed over 20,000 NFC tags on their pallets and containers to quickly see where they need to be sent.
6. Education:
Some schools in the United States have incorporated NFC into their student identification cards as a way of fast-tracking students through cafeteria lines or at the gym. This method has also been implemented at some stadiums in Europe. Similarly, libraries and museums are now using NFC stickers as well as tags to provide visitors with quick access to information. The use of these technologies is decreasing wait times by making it easy for people to gain immediate access to the information that they need, such as where a certain exhibit or collection can be found.
7. Public transportation:
NFC tags are being used to create smartcards for public transportation systems, such as the TransLink card in Vancouver or New Jersey’s QuickCard. Smartcards can be linked to different types of fares and other transit payment options.
8. Asset tracking:
One of the most common applications for NFC tags is in the asset tracking industry. In this application, NFC tags are used to track the location of goods and other items that run the risk of being stolen or misplaced. For example, some hospitals use NFC to track expensive equipment such as X-ray machines. Similarly, warehouses and distribution centers use the tags to track pallets and other large shipments.
9. NFC in marketing:
Advertisers and retailers are using NFC technology more and more in their campaigns and promotions. For example, some customers may receive promotional offers for products at checkout when they complete a purchase with an NFC-enabled credit card or phone. Advertisers are also starting to use NFC tags to distribute coupons for their products, which can be activated with an NFC device.
There are countless other uses for NFC, including sharing, receipt tracking, asset management, event ticketing, and more. But why so many industries are adopting this technology. There should be some benefits behind this rapid adoption. So let’s discuss the benefits of NFC.
Key Benefits of NFC:
The following are some of the benefits of NFC technology.
User convenience:
It offers an easy and quick way to connect to other devices or transfer information. For example, the payment process using a mobile device is much easier than paying via your credit/debit card as it does not require physical cards and all you need is a smartphone with NFC enabled wallet apps.
Environment:
NFC offers environment-friendly and efficient ways of doing several things like utilizing energy from solar panels to charge your device, switching on/off lights and appliances, etc. It also helps you reduce the consumption of paper as it replaces tickets or other such items with a digital version.
Energy-saving:
Interesting use of NFC technology is that it can be used in the form of smart tags. These tags are placed on appliances like washing machines, air conditioners, etc which once tapped with your NFC enabled smartphone will let you switch them on or off. By doing this, you can save energy and also make sure that these appliances are not left running when not in use. This helps reduce your electricity bills.
Health management:
NFC can be used to help you monitor your health status at regular intervals with the help of fitness bands that are equipped with NFC tags. These bands are able to tap into phones and give users key information on their daily activities. This helps you track how many calories you have burnt, estimate your sleep quality or even recommend a new healthy food product based on your existing diet and food habits.
Security:
NFC ensures the safety of personal as well as professional data from unauthorized access by using secure elements to store sensitive information. It can be used for authentication purposes where you need to enter a pin or password to access a system that has been protected via NFC technology. For example, you can use your NFC-enabled android phone or android device to unlock doors, enter secure areas and start your vehicle.
Efficiency:
With mobile payment services like Apple Pay and Android pay gaining popularity, NFC is now widely used in mobile payments. This helps users save time as they do not need to carry the actual credit or debit card. For business owners, it not only reduces costs but also frees up space used to store other cards.
The security of NFC-enabled mobile payments:
Many people nowadays use NFC-Enabled Payments, but how safe is it? NFC is now widely used in credit cards, bank cards, or smartphone operating systems. NFC uses radio frequencies within the electromagnetic field to gain information about objects that are not connected by wires. NFC works just like RFID, but it has the ability to transfer data between two devices at a very close range (less than 4 cm).
The security of NFC is based on a number of elements:
Cryptography:
Cryptography is a process in which data is protected by a key that only allows access to authorized users. When transferring information from one active device to another passive device, this transfer is done through an exchange of digital keys between the two devices: this exchange is performed using a unique key (PAN – Payment Account Number) and another (ATQA – Authentication Tag) generated by the card, the card reader or the mobile phone.
NFC uses encryption based on cryptography to protect data transactions:
each transaction must be associated with an encryption key that allows access only to specific applications registered in the data transmission.
The NFC Controller:
This is software that ensures authentication and application blacklisting in the event of authorization or piracy. The result is an extremely safe system. We can therefore say that not only are transactions secure, but also transfers between two NFC devices (eg phone to phone) are completely secure because all information is protected by encryption.
Current market situation of NFC and potential market of NFC:
The Covid-19 has a huge impact on the global market situation of NFC. A huge rise in the demand for contactless solutions has boosted the NFC industry. It is expected that the future market trend will continue to be towards NFC usage. According to research conducted by Allied Market Research NFC’s market share was $15,531 million in the year 2019 and it is now expected to be $54,521 million by the end of 2028. The following industries are using NFC:
- Payment Used in banking, financial technology, retail applications.
- Transportation Used in public transit, airports to opt for faster movement of user between different facilities within the airport or city.
- Public security is used for authentication and identification purposes like access control keys, building management systems, etc.
- Healthcare Used for patient data exchange, medical device management, and integration of smart devices like sensors and implants with healthcare service delivery systems.
- Automotive Used for car immobilization access control, the door unlocks, etc.
- Retail Used for inventory management, RFID tagging of products, coupon redemption.
- Defense & Aerospace Used for authentication purposes for soldiers for secure movement.
- Others The industries which are currently not a part of this list may include logistics, consumer electronics, and enterprise applications.
Currently, the market has been segregated based on components into silicon chipsets, tags, and cards & terminals. Currently, NFC is used in smartphones as most of them have an integrated NFC chip. In the market, there are several NFC products used which include tags or cards. The silicon chipsets have been further divided into multi-mode and single-mode chipsets based on their communications capabilities.
What is the future of NFC?
NFC is gaining popularity in the market with each passing day. It has the potential to become a universal technology that can be used in many fields like banking, healthcare, retail, transportation, and more. On account of this, NFC is expected to grow at an exponential rate both worldwide and domestically. This helps us understand the impending future of NFC in near future.
In the future, NFC is expected to be used in wearable devices as well. In this field, NFC has a huge scope of growth which can help it become one of the most widely used technologies all over the world. So oner or later, NFC will become the standard technology for wireless communication.
Learn more about NFC cards and NFC stickers.