Basically, NFC evolved from a combination of existing contactless identification and networking technologies, but was designed to offer simplicity in connectivity while establishing high levels of reliability. Unlike RFID applications, NFC has a higher level of standardization, interoperability, and security.
Additionally, NFC is capable of both sending and receiving data. Compared to the Bluetooth process in which one device needs to contact (ping) a nearby device and formulate a compatible protocol to achieve connectivity, NFC is more intuitive.
In other words, NFC does not require a device to seek permission before making a connection with a nearby device; the two NFC-enabled devices can communicate so long as they are within close proximity.
NFC has superior networking functionality and dependable security features that qualify it for use with transaction payment processors. In fact, in Japan the popular NFC-enabled phone of mobile operator DoCoMo is referred to as “osaifu keitai” – meaning “wallet phone.” Estimates indicate that more than 10 million wallet phones are currently in use throughout Japan, with a significant expansion projected for this year.
NFC can be configured to work with all electronic payment formats (debit or credit transactions). An NFC tag is the component that allows devices to communicate with each other simply by being put close together.
NFC APPLICATIONS EXPAND
Although mobile devices are the most common host for an NFC chipset, the technology is not limited to mobile devices as some suppliers have begun placing chips in plastic cards, smart cards, wristwatches, and key rings.
NFC is distinguished from other wireless interfaces by its ability to connect, even to proprietary configurations, using a set of standard interoperative, seamless networking technologies. The primary uses of NFC are:
- Connectivity of electronic devices (wireless components);
- Digital content access (ability to download content from a smart tag);
- Ability to conduct contactless transactions (payments, access, and ticketing).
When an NFC device, such as a mobile phone or smartcard, is within close proximity of a reader, data exchange will take place. Most often, data transfer takes place as soon as the NFC chipset is passed or swiped over a reader.
NFC OFFERS ELECTRONIC WALLET
With NFC payment technology, the amount of the purchase can be immediately deducted from the consumer’s bank account or charged against a deferred form of payment. NFC devices can be linked to a bank account so money can be debited directly from a user to the retailer.
Alternatively, NFC cards or phones can be stocked up in advance with credit to be used as payment. Similarly, NFC devices can be used for proof of purchase as in the case of admission ticketing. The certificate of purchase is stored on an NFC chip and redeemed by simply pointing the NFC device at the entry gateway.
Unlike other technologies, NFC provides global interoperability of contactless identification and interconnectivity. NFC operates in the 13.56-MHz frequency range, over a typical distance of a few centimeters. The underlying layers of NFC technology are based on ISO, ECMA, and ETSI standards.
NFC technology is supported by major communication device manufacturers, semiconductor producers, network operators, information services firms, and financial services organizations. An important feature of NFC is its automatic compatibility with all forms of contactless cards and readers, even legacy media, deployed worldwide. Given that the NFC transmission range is so short, NFC-enabled transactions are inherently secure; additionally, physical proximity of the devices also reassures the consumer of maintaining control of the process.
Products with built-in NFC dramatically simplify the way consumer devices interact with one another, helping speed connectivity to receive and share information, including fast and secure financial transactions.
NFC provides intuitive, simple, and safe communication between electronic devices. NFC is both a “read” and “write” technology.
AUTOMATIC NETWORK COMMUNICATION
Bringing two NFC-enabled devices in close proximity of one another will initiate an automatic network communication configuration. NFC-enabled devices are then able to exchange and store data – including personal and financial data, text and voice messages, photo and video images, and MP3 files – without user intervention.