NFC (Near Field Communication) Technology: How it works & what it means for you

May 17th, 2011

The humble mobile phone has grand ambitions to replace our entire wallet. We look at Near Field Communication technology and what it means for you.

Just a few years ago, the humble mobile phone didn’t do a huge lot besides actually making phone calls and the occasional text message. Over the last few years, everything has changed. Smartphones now give consumers access to most of the virtual world from their palm of their hand: e-mail, the internet, applications and social networks such as Facebook. Yet the mobile telecoms industry isn’t stopping there… it has ambitions to take on the real world too. If they’re successful, your smartphone will soon be your gateway to both the online and offline worlds.

In this article, we explore the technology of “Near Field Communications” or NFC for short. We look at what it could mean for you in the coming years and whether it’s worth going for a NFC-enabled handset today.

What is Near Field Communication (NFC)?

Near Field Communication is the general name given to a family of technologies allowing short-range communication (~4cm) between two objects. These two objects could be anything which can contain embedded NFC technology (e.g. a mobile phone, a credit card, a movie poster, a passport or an electronic chip reader). Allowing these two physical objects to share electronic information allows all kinds of novel and interesting applications. For example:

  • A NFC-enabled film poster transmitting show times directly to your phone (which can give you the option to set a reminder or to buy tickets online)
  • An electronic payment system whereby a NFC chip reader could wirelessly debit money from your NFC-enabled debit card.
  • The exchange of electronic business cards & contact details between two NFC-enabled devices.

There are a huge number of possible NFC applications and the mobile phone is currently believed to be the best way of deploying NFC technology across the UK. Not only do many people carry a smartphone on them 24/7, the customisability of smartphones and the ability for third parties to develop new NFC-enabled smartphone applications means that the phone is an incredibly flexible platform for NFC-deployment.

What are the possible applications of NFC on a mobile phone?

It’s most likely that the early applications of NFC will be basic applications such as “smart posters” which can transmit a web address to your phone to find out more information about a product. Indeed, NFC could take over from some of the applications we currently use barcodes and QR Codes for. Loyalty schemes such as Tesco’s Clubcard already offer smartphone applications which will display a barcode on the screen which can be scanned in place of a physical card. And occasionally you’ll see QR Codes in marketing material which you can scan to obtain further information. In both of these cases, NFC would be a faster solution without the hassle of having to use a camera to scan the barcode.

Going forward, one of the more exciting applications of NFC is an “electronic wallet”. A bit like a turbocharged version of London’s Oyster smartcard which is used for Tube travel (and ITSO which is being rolled out across the UK), but the NFC-enabled “electronic wallet” would consist of a chip which is built into your mobile phone and a range of applications that’ll allow your phone to talk to other NFC-enabled devices.

What would be the benefits of an electronic wallet?

At the moment, we all carry round huge wads of paper, plastic and metal in our wallets: debit cards, credit cards, loyalty cards, ID cards, coins, cash, receipts, vouchers, train tickets… the list goes on. Most of these items exist solely to store information (e.g. your ID card, store loyalty cards), to prove that you’ve paid for something (receipts, train tickets) or as a medium of exchange (cash and coins). Like all other physical objects, there’s a limit to the amount you can carry (nobody carries round a hundred loyalty cards), it can be slow and there are security concerns too (if you lose physical cash, there’s no way of getting it back).

Switching to an electronic wallet could mean:

  • Space. There’s no limit to the number of debit, credit or loyalty cards you can carry round. All you need is one NFC-enabled application for each card on your phone.
  • Speed. Simply tap your NFC-enabled mobile phone on a reader to pay, and you’re ready to go. No need to fumble round to find the right change.
  • Security. It’s difficult to ever recover your stolen wallet: it’s a lot easier secure your phone and also to recover a stolen phone.

London’s Oyster Card uses “tap to pay” technology which is very similar to NFC.

NFC technology will also be used for electronic ticketing. London 2012 is likely to begin using some form of NFC ticketing and payment.

What’s the current status of NFC in the UK?

NFC certainly isn’t mainstream in the UK today. There are virtually no NFC-enabled phones in circulation and even if you had one, there would be very few places you could use it.

Mobile operators are keen to encourage adoption as they want to move into the payment space with Everything Everywhere (the company which owns T-Mobile and Orange) aiming to launch an NFC payment service in conjunction with BarclayCard this summer. With an NFC-enabled device, you’ll be able to use your phone to make payments as Visa PayWave enabled stores. O2 are also likely to announce a similar service under their “O2 Money” brand.

Merchants such as McDonalds are starting to introduce NFC payment technology into their stores this summer.

Aren’t there potential security risks with NFC?

Like any wireless communication system, there are several security concerns about the possible interception of data transmitted over NFC. Although NFC has a range of around 5cm, it may still be possible for others to intercept the message if they are in close proximity. For this reason, “electronic wallet” applications should typically encrypt data.

Google’s Nexus S is one of the few phones on the market containing NFC support.

If you choose to use your phone as an electronic wallet, it is worth locking down your phone. This includes adding a screen/PIN lock code and installing a security application which would allow you to trace a lost phone or to remotely wipe it. Whilst the electronic wallet does make it more problematic to lose a mobile phone, a sufficiently locked down phone will provide good security and many people will generally notice losing their phone much faster than they would notice losing a wallet.

Which mobile phones currently have NFC support?

Google’s Android 2.3 Gingerbread contains software support for NFC but the vast majority of Android smartphones don’t have the hardware capability for it (this includes recent releases such as the Samsung Galaxy S II). The Google Nexus S is one notable exception in integrating an NFC chip.

Should I opt for a mobile phone with NFC?

Our current advice is that NFC shouldn’t be a core decision in the phone that you choose to buy. There are currently very few NFC-enabled phones available on the market and so few places where you could actually use it. Given that NFC deployment within the UK is virtually zero at the moment, it’ll take a while for it to go mainstream. In the meantime, it’s not worth restricting yourself to an NFC-enabled device: you’ll have an incredibly limited choice for handsets.

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About Ken

Ken Lo

My passion is helping people to get the most out of their mobile phone. I've been blogging at Ken's Tech Tips since 2005.

Aside from writing about mobile technology, my interests are in software development, digital marketing and physics. Outside of the blog, I work with numerous technology companies helping them to explain their product and helping them to market it to consumers. Please get in touch for more information.

Your Comments

We'd love to hear your thoughts and any questions you may have. So far, we've received 2 comments from readers. You can add your own comment here.

  1. Ikenna said:

    Thanks Ken, your site is right for me because you are directly hitting the nail on the head – exactly to the point where I need to learn many aspects of the smartphones and mobile technologies. I would like to continue to be in touch with you.
    Thanks very much Ken.

    Ikenna

  2. Samantha said:

    NFC as a technology got nowhere. QR codes – simpler – but have proven their worth due to compatibility with virtually any device. We’ve also got loyalty appssuch as Maze here in Australia for loyalty and don’t require shoppers to have NFC-compatible mobiles.

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