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Near Field Communication - what is it and why should I care?

RFID implantable chip and sticker
By Joseph Holder on 15 Aug 2011 06:30 pm EDT
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The future that Near Field Communications (NFC) promises is nothing short of astounding. However, the obstacles lying in the path of that future are just as great. NFC is honestly nothing new; as a technology, NFC has been around since 2004. In 2005, Cingular (now AT&T) installed NFC point of sale readers as a test in Philips Arena in Atlanta. They were confident that by 2010, over half of the wireless phones in the US would support NFC. Today, there are but a handful.

It's only in the recent past that NFC became something of a hot topic. As to why, I can't help but think that it has something to do with money. Mobile payments will be the driving force behind NFC adoption in Europe and North America. The other uses of NFC - Bluetooth pairing, smartcards, file sharing - just aren't important enough to design into a smartphone for the masses. At best, the features would seem gimmicky; at worst, unnecessary.

But paying for food; clothing; and Wal-Mart with your phone may very well become a thing. A great deal of the hardware required to do this is already in place; it's all thanks to that little chip that might be in your credit card right now.

The Progeny of RFID

 

In many ways, NFC has its roots in Radio Frequency ID. In that technology, a passive sensor is bombarded with radio waves from a reader; it uses that energy to send back a plain-text string of numbers. RFID is used in a number of places like tracking pallets at Wally World (Wal-Mart to some) and tagging animals - both wild and domestic.

The next evolution of this radio frequency technology was the smartcard. Unlike RFID chips, information on smartcards is not sent in plain-text. They contain chips capable of both sending and storing information with a high level of encryption. Smartcards are used in high-security government and corporate applications, transit ticketing (like the Clipper card used at BART stations), and payments. That credit card that lets you do contactless payment at McDonald's? That's a smartcard.

Until NFC, these radio frequency solutions have consisted of passive sensors. A reader sends out a pulse of radio energy that the chip uses to send back a response. There is no power source in these chips, only a rather long antenna. NFC integrated into a smartphone brings the passive chip and the active reader into one package. More than that, the process becomes more dynamic and more secure.

What NFC can do for you

Reading Tags

Harkening back to its RFID ancestry, NFC allows you to read NFC tags. Oftentimes these tags are in the form of stickers that can be affixed to any number of items. Posters with the stickers could point you to a movie's website. Tagged items in stores could give more information about themselves. In short, NFC tags work similarly to QR codes, though there's no camera to worry about focusing "just right."

Transportation

Clipper is one implementation of smartcard-powered implementationAs mentioned before, smartcards can easily be emulated by the NFC technology found in a handful of Android devices, two BlackBerry devices, and a rumored iPhone device. The Bay Area Rapid Transit system uses the Clipper Card - a smartcard - to ticket and charge its customers for the ride. The cash balance to these cards can be added at kiosks located around the stations. With an NFC equipped smartphone and an intelligent app, users could add money right from their phone.

Bluetooth Pairing

Pairing two Bluetooth devices is easier that it once was, but it's still slightly complicated. NFC offers near effortless pairing of devices. Simply tap a Bluetooth device to your phone and the two are paired.

Pay with your Phone

Using NFC, payment at contactless card terminals will be easy 

This is the most important part about what an NFC-equipped smartphone can do. Not necessarily because it's the most powerful feature, but because it is money and commerce that will drive NFC to become more readily adopted. Without banks and merchants behind the technology, NFC will go no where.

Fortunately, a great deal of the hardware is already in place. Those contactless card readers you can sometimes find in stores today are certainly compatible with NFC systems. Smartcards - like that chipped credit card - are arguably more secure than a simple magnetic stripe, and I can see a future where mobile phone payments are even more secure than that. Logging in to an app or entering a PIN on-screen would be yet another way for banks and card issuers to verify who exactly is making this purchase.

And as much as I would like to believe otherwise, that image up there is a fake, a bit of Photoshop trickery. They're aren't any widespread NFC mobile payment options for BlackBerry... yet. 

Final Thoughts

NFC can be used almost anywhere.

We carry so many cards around with us. Some cards are used to purchase things. Other cards are used to gain access to secured areas. NFC aims to reduce that multitude of cards you carry down to zero. With all of those functions carried out by the NFC technology in a smartphone, all you need to carry with you is that device.

NFC, though more than a half-decade old, can still be considered an emerging technology. There's been precious little adoption in the mobile payments sector and thus very few phones actually support that functionality. But the times, they are a' changing.

With more mobile devices supporting the technology there will be more demand to make use of it. Increased demand will cause the technology to appear on more phones. Which will increase demand which.... You get the idea.

NFC and mobile payments go hand in hand. Where one succeeds, the other will soon follow. And with it, comes all the gimmicky, geeky goodies that NFC promises to bring.

Sources: Near Field Communication: A Quick Guide to the Future of MobileHow will NFC get its piece of the $4 quadrillion payments pie?RFID Tags and Contactless Smart Card Technology: Comparing and Contrasting Applications and Capabilities [PDF]

Topics: NFC Editorial

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Near Field Communication - what is it and why should I care?

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It is believed NFC will be boosted in London by the 2012 Olympics since already there are some 60,000 sites in London that accept NFC payments, and there will be increasing efforts to increase that number as London 2012 nears

I use to laugh at thing like that but I cannot anymore because everything is coming true about the NWO. Cashless society, tracking and control over our money is right here in our faces.

Technology is a double edged sword.

This is a cool video. Thinking about this, you could use it for hundreds of things if they start implementing it in society. Would be nice to go to an ATM and just use my phone instead of my card to get money out.

No disrespect intended, but its really funny that one of its biggest potentials and most likely first wide spread use of NFC would be to remove the need for cards and cash, and the one example you give is to get cash from an ATM(which is still wicked.) lol

Nice Video.
Good Now i dont have to carry all stupid plastic card with me at Gym, Office,Home,Sobeys,Shoppers,Safe Way....ETC the list goes on and ON...i have a case on my car only with points card from all the retails shop's and when ever im going shopping i pull the card.
Finally No more Plastics one Phone can Handle all.

Identity theft just got 1000x's easier. I wear a wallet chain so I cant get pick-pocketed, now I'll start wearing a phone chain, or maybe one of those retractable lanyard chords.

All the more reason why Security is also the future. That said, security is only as strong as the end user.

I can envision in the future when stuff like this is common practice that personal IT policies will become the norm and some of the more extreme ones used by Gov (such as phone wiping/locking if it gets out of range of a end user) will also need to become standard.

Not necessarily. One easy security measure I can think of is to be able to remotely do a security wipe if your phone gets stolen.

In the end its the same as if your wallet gets stolen.....besides, people have their information scattered anyway; various bank accounts, credit cards, school, work, email, blogs, apps......security is as security does. Nothing is completely secure.

wow this is insane, i never thought nfc would be this crazy. living in boston i never knew you can do the charlie card system with nfc, that changes everything!

Only problem you have now is finding a universal payment carrier. Hoping for a third party such as square to come in and fill the gap.

Because the carriers want to control where the payment information is stored. The carriers want it to be stored on the SIM card which they control and RIM wants it to be stored on the device. It's all about making the interest on the transaction handling.

I like the idea where u can use blackberry to make payments.
But on another issue, what if your phone get stolen?? how woulld this work? can people just go on a blackberry stealing spree and then end up with a shopping spree?

Exactly, I'm way too paranoid for something like this.

Besides outright theft of the actual device, how about if someone just "borrows" it briefly to pay for their nice new pair of shoes? How would you explain that to your bank or the credit card company?

Bank: "Was your phone stolen?" You: "well, no, actually." Bank: "Hope you enjoy your new pair of shoes."

Meaningless stuff like bus schedules, great. Money stuff? No way.

im going to assume it'll be like if someone stole your wallet or cc. cancel your cards and its no like your phone will have physical cash in it like a wallet does. dont forget bb 7 phones are shipped with bb protect on them so its easy to lock your phone and wipe it clean

I live in San Francisco and I'd love to not have to carry around my Clipper Card and just use NFC on my phone :)

I believe it can do it.
But not quite necessary since you could also just scan the barcode. (The same as putting both devices close)

I do like the idea, but I personally might hold off using the Credit Card / Debit Card until I see a good consistency of a proven record. I'm sure we've all been victims of scams personally where they clone a Credit Card or even the popular Debit Card. Not sure what security stands behind this and if any security exploits will arise upon popular demand.

Also, did anybody notice in the film that Sarah is a friendly girl, lol. I found it pretty funny but all jokes aside why the Nokia flip phone !!! that was killing me SoFTLy :pokerface:

It is exciting times, BlackBerry rolling out NFC before its smartphone competitors, now let's get App developers backing up NFC, shoring up this lead!

Great. Lose my phone, lose my cards and money too. With my existing cash value smart card providers "Not responsible for values of lost or stolen card", I'm sure it would extend to NFC apps.

Problem with this I see is we would need our mobile devices constantly charged. Also losing the phone will definitely be the end of the world