What is Near Field Communication?
Near Field Communication (NFC) is a manner of connecting two devices at very short range; within 1.5 inches, in order for the two devices to exchange information. The devices can have information read and written onto an ‘information tag’, and for example can be used by contactless card readers to process payments.
The official definition released by the NFC Forum states that NFC is ‘loosely coupled inductive circuits sharing power and data over a few centimetres’. Today, NFC is a popular method of ‘contactless’ payment technology which is emerging as a credit and debit card feature and is currently used by the UK Government’s Transport for London, in the form of Oyster cards to pay for travel around the city. The potential of NFC is so hugely vast that new uses for it and possibilities are being established all the time.
What Benefits Can NFC Offer a Smartphone User?
Two devices can share information in a way similar to Bluetooth, but without needing to ‘pair’ or prime the devices beforehand, they will simply need to be held next to each other, or lightly touched together.
NFC enabled devices can work as barcode or QR code scanners do at the moment, providing information, prices, or even linking to a website, all simply from touching the device to a NFC sticker placed in a convenient location.
Mobile handset manufacturers, like Samsung, are starting to include NFC technology in their devices. Hence, your NFC enabled Smartphone could mean that you do not have to carry a wallet anymore; you could have all your payment information on the device.
Is It Safe to Use NFC Payment Processes?
While this may initially sound risky; the old ‘all eggs in one basket’ dilemma, in actual fact it would be safer for the user. Many people already carry important information and cards in their wallet, which if lost or stolen would be immediately accessible to the next person to open it; whereas with a smartphone loaded with that wealth of personal data it is a simple matter to password protect all the data, meaning that no-one can easily access information or funds.
There are safeguards in place to protect payments. The extreme proximity required for the NFC ability to activate is, by itself, a form of protection. The credit card companies and banks that are investing in this technology will rate the safety and security of their systems and their customer’s money and information high in priority.
What Lies in the Future for NFC?
NFC will allow retailers to specifically tailor offers to customers, who will be able to pay quickly, avoiding queues at till points. Till points themselves may fall away; mobile pay stations can be brought to the customer for the payment to be actioned there and then. In a world where 79% of smartphone users consult said phones in decision making processes, retailers would be missing a large opportunity by eschewing NFC technology.
NFC enabled technology will soon be used widely on transport systems, travel cards and will be accessed through the users’ smartphone. Social media is already beginning to dip a toe into the world of NFC, particularly dating websites who are working on apps that might be able to signal that a potential match is in the same location.
The overwhelming top benefit of NFC technology will be seen to be the fact that it is ready to go; there is no software to download, no passwords to be entered, no drivers to make the devices compatible. Imagine tapping your smartphone onto a printer and, within minutes, walking away holding in your hand a photograph that you had taken on the phone.
Many top international companies are expressing enthusiastic interest in the process, from Google to Apple, through Microsoft, Amazon and even PayPal: these companies have seen the future of NFC and they want to be prepared for it. The PayPal development in particular is intriguing; they have teamed up with Bling Nation, to allow customers to pay from their PayPal account in Bling Nation stores.
We may well be stepping into a future where we need no wallet, no handbag, no keys – just your phone, preloaded with cash, tickets, tokens, coupons, and even electronic key codes – for house and car alike.
References: Wikipedia.com, nearfieldcommunicationnfc.net, startjg.com, mashable.com
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License: Creative Commons image source
This article was written by Mike, an expert in credit card processing at First Data Merchant Solutions.
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