NFC or Near Field Communications is a standards-based, short-range wireless technology that uses magnetic field induction to enable communication between electronic devices in close proximity. Based on RFID technology, it provides a seamless environment for the identification protocols that validate secure data transfer. This enables intuitive, safe, contactless transactions, access to digital content and the ability to connect electronic devices simply by touching or bringing devices close together.
It isn’t entirely new technology as RFID has been around for some time, but the agreement of standards and the formation of the NFC Forum which signed up manufacturers, suppliers and many other interested parties led to massive advancements both in the application and delivery of the technology. It’s now cheaper and easier to implement in almost any scenario and this has led to an explosion of use.
Perhaps one of the biggest areas for growth is ticketing with the launch of the Oyster card which has transformed the London transport system and is rapidly expanding across the country. From an initial sceptical beginning, this has exploded into a facet of everyday life for millions of commuters and regular travellers. In return the savings, efficiencies and myriad of new feedback and statistical data has enabled transport authorities and operators to manage and plan for ever increasing demands.
The next major advance is contactless payment which was introduced to the general public by Barclaycard. Despite the extensive primetime advertising giving the impression that this was a new age way to part with money in exchange for goods and services, the planning was long in the making as ‘chip n pin’ cards contained additional features which were lying dormant until needed.
This longer term planning gives an insight into just how carefully and meticulously large corporations are using simple technology to revolutionise our world and transform the way they do business to promote grow and continued profitability.
One spin off that may not be immediately obvious is a huge potential saving in the life-span of a card. Modern cards are not cheap to produce as the embedded technology coupled with sophisticated physical fraud deterrents keep the costs relatively high.
Imagine then the wear and tear on a card being inserted and removed repeatedly from a reading machine. This was best seen on old style cards with magnetic strips which were particularly vulnerable to physical wear and damage. The chip-based cards have improved this but there is still a certain element of stress every time they are used. Replace the insertion with a wave or brief contact and that stress factor is greatly reduced resulting in a significant increase in life expectancy. Multiply this by the millions of cards in use and being produced every day and the savings are vast.
Contactless Payment with your Mobile
So now take it a step further, in 2011, Orange and Barclaycard became the first in the UK to offer a mobile phone with active embedded NFC which allows contactless payments. Using a sim-card based level of security, this offers higher levels of security than current contactless cards as transactions can be validated in real-time and an app on the phone shows how much is used, transactions etc. This offers the consumer a configurable ‘card’ which is built into a device they probably take everywhere with them.
For the operators, the network can take a fee from the card company for brokering the transaction and the card operator saves a fortune as there is no card. Customers can control their spending and don’t need to carry cash and the retailer reduces cash handling and gets faster transactions. Simple, effective and potentially an advantageous step forward for everyone.
The extension and proliferation of NFC embedded technology is set to explode in the next 12 months particularly in the mobile phone arena. All the major operators and manufacturers will be including the potential into their devices if not being immediately activated. This opens a new world of possibilities which is not just restricted to the current applications.
The substitution of payment cards, travel cards, security tags, location devices and current technology is only the start. The real potential comes if this embedded technology is opened up to the developers so that the extensive community of Android, iOS and Windows Mobile developers can leverage this in smart apps. This would then expand the commercial opportunities and make wider access possible at relatively low cost.
Whether this is actually the future remains to be seen. Operators may see the opening of this access as a concession of rights and will look to licence the access in order to protect potentially very lucrative and long term revenue streams. At the moment, the plans continue with the technical infrastructure already in place, in terms of the mobile communications networks to handle these contactless transactions and authorisations. Capacity is another issue if the growth is, as expected, exponential.
The Real Potential
Imagine in a retail world you could offer your customers coupons, discounts, special offers and a complete electronic itemised receipt simply by them paying using their smartphone. They could pre-order online and when they pick up; a simple touch would confirm the transaction and transfer the payment. This is just in the retail world. Most offices, factories and work environments operate an RFID-based security/ID card system. Replace this with access using mobiles and the time/cost savings are significant. Not only that you could transfer information or health and safety warnings to the device as a reminder or update to operating procedures. It’s really just a matter of imagination.
Mobile handsets are only one instrument, and the technology is already being implemented in so many aspects of our lives – from coffee shop payments, travel systems, security clearance, airport travel, identification, social networking, information exchange – the list is endless. While NFC is not new technology, the massive explosion in use and application means that this is now rapidly being established as a fundamental element of both commercial and personal environments. This is a growing NFC eco-system of devices and networks which offers new avenues of commercial and revenue generation. The possibilities and potential are reflected in the massive level of investment and development around the world so that almost every aspect of human life will touch and interact with this system.