What is Near-Field Communication (NFC)? 10 Everyday Use Cases

26, April 2021

Identity Verification Customer Onboarding NFC E-government (eID)

Some new technologies blend so seamlessly into our lives that we often end-up regularly using them without awareness. Near-Field Communication (NFC) is one of these technologies.

What is NFC technology?

Near-Field Communication (NFC) is a set of communication protocols for a two-way wireless data transfer between two electronic devices. “Near-field” refers to the fact that the two devices have to be positioned near one another in order to communicate – with a maximum distance of 10 centimeters or less.

The onset of commercially applicable NFC technology began in the early 2000s. At this time, Sony, Philips and Nokia experimented with and built on earlier technologies and patents such as Radio Frequency Identification (RFID) technology (around since the 1980s) and invented NFC technology.

The confusion around NFC and RFID technology

The terms NFC and RFID are often used interchangeably and oftentimes incorrectly. It is excusable and can hardly be called a mistake, given that NFC is actually a specialized subset of RFID technology. Or, put strongly, Near-Field Communication is an evolution of RFID technology.

Generally speaking, both NFC and RFID technologies are forms of wireless communication – i.e. they transfer information through the air between a transmitter and a receiver via radio frequency (RF) waves. Other forms of wireless communication include amongst its ranks: AM/FM radio, Bluetooth and Wi-Fi.

There are a number of important differences between NFC and RFID and that is where some clarification between the two technologies is helpful. Mostly because it is the differences that lead to the varying use cases of each technology. If you are familiar with the difference between scanning printed barcodes and scanning QR codes, you will already better understand the different directions that these technologies have taken.

For deeper insight into these differences, take a look at BlueBite, a company that works directly with NFC and RFID technologies. A short synopsis of an infographic on their website labels RFID as “item-centric” and a technology that improves upon printed barcodes. Whereas, NFC is labeled as “user-centric” and a technology that improves upon QR codes.

RFID – As an improvement on printed barcodes, RFID does not require a direct line of sight. It has a standard read range of up to 10 meters for passive tags and 100 meters if the RFID tag is powered. Specialized readers are usually required in order to interact with RFID tags, but there is some crossover here, whereby certain NFC-equipped smartphones are able to read these tags. RFID technology is primarily used for (item-centric) supply-chain inventory tracking and for loss prevention at stores – noted by the two electronic towers prominently placed at most store exits. One of these two towers is a transmitter while the other is a receiver and when you pass between them with an RFID tag that has not been deactivated, the alarm will sound.

NFC – As an improvement on QR codes, NFC also does not require a direct line of sight. This is, however, where the differences between RFID and NFC take a hard turn. The read range of NFC maxes out at approximately 10 centimeters – which actually doubles as a feature for improved security (e.g. for payments). NFC is primarily used to add consumer (user-centric) utility to products, such as for product authentication and access to exclusive content.

A final important difference between the two technologies is that Near-Field Communication allows data to flow in both directions. This means that NFC enabled devices can exchange data, whereas RFID only works in one-direction and therefore the amount of data is limited to what an RFID tag can store – which is usually no more than 2 KB.

10 Consumer Use Cases for NFC technology

NFC technology is by now nearly ubiquitous across all major smartphone manufacturers. Nearly every new smartphone has NFC technology as a standard. Apple was one of the last companies to get on board with NFC technology and is unfortunately still only halfway there but their latest releases appear to have finally welcomed the technology.

  1. Payments – The number one use case for Near-Field Communication technology today is contactless payments with a smartphone. This use case in particular is why the maximum communication distance of 10cm is a feature rather than a hindrance. It would be terribly inconvenient if your phone accidentally paid for someone else’s purchase while standing in line at the supermarket. Google Pay and Apple Pay are the front-runners for NFC payments, though there are other companies also providing NFC payment apps. Of these, PayPal is probably the best known, but there is also Venmo, which works seamlessly with Facebook, but is not supported by most brick-and-mortar retailers.
    Other than payments, there are a number of other lesser known use cases for NFC technology. A selection of them follows below. Of course, some of the following use cases are not new and were already in use when RFID was the standard.
  2. Public transit – NFC to pay for public transit. What a convenience! Many of us grew up fumbling with coins and paper tickets, but now major urban centers all over the world are adopting NFC payment systems. Simply tap your transit card or smartphone onto a terminal, and you are permitted to ride. Public transit NFC has led to faster payment times and less platform congestion around ticket machines. NFC is also more environmentally friendly, bypassing wasteful paper tickets. Unfortunately, data privacy has been an issue as many public transportation agencies have been logging the date, time, bus route and bus stops of passengers; for example in Berlin, Germany.

5 reasons why NFC adoption will continue to increase

  1. It’s secure. NFC transmissions are short range giving the individual more control over how they interact with the technology.
  2. It’s versatile. NFC can easily be implemented across a broad range of industries and situations.
  3. It’s open technology and standards-based. Universal standards provide more choices for customers and leads to stable systems.
  4. It works with multiple systems. For example, smartphone based NFC already works with existing contactless card technologies.
  5. It has working committees promoting its adoption. NFC has a number of primarily industry-led organizations working behind the scenes to increase NFC adoption. One of these is the NFC Forum.

The NFC Forum

The NFC Forum launched as a non-profit in 2004. NFC Forum’s mission is to advance the use of Near-Field Communication technology by developing specifications, ensuring interoperability amongst devices and services and educating the market about NFC technology. The usual major technology companies are behind the NFC Forum, such as Apple, Google, Intel, MasterCard, Samsung, Sony and many others.

According to their website, the NFC Forum is currently developing specifications for a modular NFC device architecture in order to enable a consistently positive user experience. Furthermore, they are educating enterprises, service providers, and developers on how to use NFC technology to deliver impactful solutions and grow their businesses as well as developing specifications, test mechanisms, and guidelines that ensure consistent, secure, and interoperable use cases worldwide.

How PXL Vision leverages NFC technology

Another use case for NFC technology aligns with travel (use case number 4, above). Passports or other government-issued identity documents which are equipped with an NFC/RFID chip can be used for online identity verification purposes. Many passports these days already have an encrypted NFC/RFID chip built-into them with varying types of information (data) on them, depending on the jurisdiction. In some jurisdictions, the data might even be biometric in nature.

The verification of the biometric NFC chip provides the highest security in document verification today. However, not every user device has the reading capability and also most locally used identity documents, such as driver’s licenses or national ID cards, don’t yet have a chip embedded.

As an online identity verification company, PXL Vision utilizes this aspect of NFC technology where feasible, allowing individuals to remotely identify themselves by using their electronic passports or other NFC/RFID equipped identity document. Learn about this and our other online identity verification solutions by visiting our company website here.

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