What Is Near Field Communications (NFC) and How Does it Work?

Are you among the early adopters using Near Field Communications (NFC) in your daily life? Perhaps you have an Android device that is equipped with an NFC transceiver that can interact with smart tags, smart accessories, and other NFC-enabled devices. NFC is growing, and could be in the hands of nearly all smartphone users within the next two years if Apple adopts the technology.

NFC is similar to the Bluetooth technology we all know, because it allows two devices to interact with each other. In fact, at CES2014, Panasonic unveiled noise-cancelling wireless Bluetooth headphones with NFC pairing. If research firm eMarketer is right, almost 50 million Americans will be using their phones to make in-store purchases by 2016. Although NFC is not yet available on Apple devices, which command approximately 50% of the market, industry debate continues as we wait to see if Apple will throw its weight behind Bluetooth Low Energy (BLE), a technology different from NFC, which will be discussed in my next blog.

In an April 11, 2014 TechCrunch article written after the Apple investor conference, Apple’s 2014 roadmap was laid out in considerable detail by KGI Securities analyst Ming-Chi Kuo, who said they intend to include NFC in iWatch and iPhone devices. The primary use at this point seems to be as a mobile wallet technology.  On April 21, Business Insider reported that Apple’s iBeacon™ appears to be gaining traction, a development with “disruptive potential for the payments ecosystem”, using BLE technology.

NFC is a form of Radio Frequency Identification (R.F.I.D.), and is used specifically for very short-range radio transmission. NFC transmitters can communicate a few centimeters at most. Some chips are designed for smartphones and similar devices that quickly and easily transfer information between them with a simple touch. Whether it’s an exchange of business cards, a quick business transaction, or downloading literature, that close proximity ensures that the information shared is exactly the information you want to share. For example, as a consumer, if you’re making payments with a smartphone, that limited range is a key benefit. You place your smartphone up to a receiver at the register, type in your PIN and your electronic credit card is charged. In a trade show booth, NFC tags can be placed inside a document, for example. If that document interests you, you can hold up your NFC-enabled smartphone up to it and instantly receive more information.

Only time will tell.  By the end of this year, we should have a good idea of how NFC is being adopted in the market or if BLE will be technology of the future.

Stay tuned for the next blog focusing on:
-    Bluetooth Low Energy – What is BLE and Does it Have a Future?