What Is Near-Field Communication (NFC)?

What Is Near-Field Communication (NFC)?

Near-field communication (NFC) is a short-range wireless technology that enhances your smartphone, tablet, wearables, payment cards, and other devices. I see it as the ultimate solution for connectivity in many scenarios.

With NFC, you can transfer information between devices quickly and easily with a single touch—whether you're paying bills, exchanging business cards, downloading coupons, or sharing a research paper.

Key Takeaways

Near-field communication (NFC) is a short-range wireless connectivity technology that lets NFC-enabled devices communicate with each other. These devices include mobile phones, tablets, laptops, and wearables. NFC started in the payment-card industry and is now expanding to applications in numerous industries worldwide.

It allows you to share content, establish or confirm a wireless connection, pair devices, connect Bluetooth-enabled devices and smartphones to other devices and computers, and establish connections between two networked machines or devices. NFC technology operates in one of three primary modes: reader/writer, peer-to-peer, or card emulation.

Understanding Near-Field Communication (NFC)

Near-field communication transmits data through electromagnetic radio fields to enable two devices to communicate with each other. For it to work, both devices must contain NFC chips, as transactions take place within a very short distance. Your NFC-enabled devices must be either physically touching or within a few centimeters of each other for data transfer to occur.

Because the receiving device reads your data the instant you send it, near-field communications greatly reduce the chance of human error. You can rest assured, for example, that you cannot purchase something unknowingly because of a pocket-dial or by walking past a location embedded with an NFC chip, like a smart poster. With NFC, you must perform an action intentionally.

In fact, even after NFC technology becomes universal, you may still need to carry a backup payment method; you cannot do much with a device whose battery is drained. Whether this is a permanent downside to NFC technology remains to be seen.

Important Note

As with any evolving technology, retailers need time to ramp up their equipment to process NFC transactions; so for now, you should still carry cash or payment cards.

How Does Near-Field Communication Technology Work?

NFC technology works by combining four key elements: an NFC microchip within a device, which acts as an antenna and receiver; a reader/writer that scans and allows NFC devices to access data; an NFC software application on the device that can use data received by the NFC chip; and an information or communications service provider that manages all device communications.

NFC is an extension of RFID technology, which relies on radio waves to track goods, supplies, and merchandise. NFC replaces RFID chips with microchips that can store and encrypt information. While RFID devices are passive and lack the ability to access information, NFC-enabled devices do.

For example, you can pay for purchases using NFC-enabled debit and credit cards. When you tap your card on an NFC-compliant payment terminal, data is transmitted between your card and the payment processing system to complete the transaction.

An NFC-enabled device can operate under three different modes: reader/writer mode, peer-to-peer mode, and card emulation mode.

Reader/Writer Mode

A reader/writer is an NFC-enabled device that manages and coordinates information sent between and received by two or more NFC devices and other devices without NFC. Examples include point-of-sale systems, cell phones, tablets, and RFID-enabled cards. In reader/writer mode, NFC-enabled devices communicate and exchange data based on instructions from the reader/writer.

Peer-to-Peer Mode

This P2P mode enables two NFC-enabled devices to exchange information directly. For example, a peer-to-peer device may exchange data with an RFID-enabled device or another NFC device without a reader/writer.

Card Emulation Mode

In this mode, an NFC-enabled device functions as an NFC payment card or virtual credit/debit card. When activated, it emulates a payment card in card readers, magnetic-stripe readers, and contactless card readers to make payments directly from your mobile device.

History of NFC

You might know near-field communication best as the technology that lets you pay retailers and others with your cell phone. NFC drives payment services like Google Wallet and Apple Pay. Although NFC is not in the Amazon Echo yet, it's a good example of where it could be useful, like tapping to pay for a pizza ordered through the Echo.

Near-field communication technology is rooted in radio-frequency identification (RFID), used for decades by retailers to tag and track products. It gained steam in 2004 when Nokia, Philips, and Sony formed the NFC Forum, a nonprofit committed to bringing NFC to all aspects of life. In 2006, the Forum outlined NFC architecture, providing a road map for new products.

Nokia released the first NFC-enabled phone in 2007, and by 2010, the telecommunications sector launched over 100 NFC pilot projects. In 2017, New York City's MTA phased in NFC for subway fares, and the rest is history.

Benefits of NFC

There are several benefits to deploying NFC technology. NFC-enabled devices can replace cards or cash for transactions. Since they can store multiple credit cards, you don't need to carry them all; instead, access your virtual wallet on your device to pay.

NFC uses 128-bit or higher encryption for security and privacy. It uses tokenization instead of storing credit card info, so no retailer sees your number. Sharing content, goods, and money with friends is easier when you grant access to your device—for example, sending a file via peer-to-peer happens immediately.

NFC can deliver targeted ads to your device. When you tap an ad, it customizes based on your interests, location, or other info.

NFC Drawbacks and Security Risks

Although NFC offers many advantages, it has drawbacks and risks. NFC devices rely on battery power, so they must be charged periodically. You might forget to charge before a purchase, and if power runs out during a transaction, it could fail.

In peer-to-peer mode, since devices store personal info, they're vulnerable to breaches like cybercrime and digital pickpocketing. Hackers can try to access devices with malicious software or create mimicking tokens.

With pay-by-phone being a primary use, digital pickpockets could intercept payment info from unsuspecting users. To protect yourself, ensure your devices have the latest security like 128-bit encryption and two-factor authentication. If you lose a device or suspect compromise, change passwords and disable sharing features.

NFC: Beyond the Payment Process

With expanding uses, NFC goes beyond simplifying payments. Hundreds of millions of contactless cards and readers worldwide use NFC for securing networks, monitoring inventory, preventing auto theft, tracking library books, and running toll booths.

NFC is in cards we wave at subway turnstiles and buses. It's in speakers, appliances, and devices we control via smartphones. With a touch, NFC sets up WiFi and Bluetooth in homes.

Fast Fact

The first use of NFC was for contactless payment systems. NFC-enabled cards were introduced in the early 2000s, allowing payments by holding the card near a terminal.

NFCs Offer Near- and Long-Term Solutions

NFC proves useful in numerous industries with far-reaching implications. In healthcare, NFC-enabled wristbands track vital signs; you tap the band on a phone, and data goes to the doctor's office for autonomous monitoring. In hospitals, NFC tracks patient locations and treatments in real-time via wristbands.

In airlines, Japan Airlines in 2012 allowed NFC phones for boarding gates instead of paper passes, shortening boarding time for a 450-person plane to 15 minutes from 40.

In hospitality, hotels manage access without physical keys; hold your phone to the door. NFC can send room access to your device in advance, plus functions like booking and skipping check-in.

What Does NFC Do on My Phone?

Enabling NFC on your phone lets you make touchless payments. It also allows sharing or receiving info wirelessly, interacting with RFID cards like transit cards, and using with other devices like room keys.

Should NFC Be on or Off?

Because NFC draws battery power and poses security risks like digital pickpocketing, you should usually turn it off when not in use.

Is NFC Dangerous?

There is no evidence that NFC is harmful to your health. It operates at 13.56 MHz, a low-power frequency. While some RF radiation can have effects with long-term exposure, NFC's level is too low to be harmful.

Can You Be Hacked Through NFC?

It is possible to hack via NFC, though unlikely today. NFC works over short distances, less than four inches, so an attacker needs to be close. Most devices require user approval for connections, so tricking you is needed.

Even if connected, attackers need to exploit software vulnerabilities, which depends on the device. Keep your device updated with security patches and be cautious with unfamiliar connections.

The Bottom Line

NFC is wireless technology for short-distance data exchange, used in contactless payments like Apple Pay, access control, and marketing. It operates at low power and isn't harmful. It's as safe as WiFi or Bluetooth, but enabling it drains battery, and hackers could exploit it from close range. Keep NFC off when not needed.