NFC Technology – Everything You Need To Know

UPCOMING TECHNOLOGY – NFC Technology (Near Field Communication Technology) will bring in the ‘next level’ convenience and sensibility to the way we exchange information. This technology can easily be scaled up to many areas of applicability, which is what makes it another add-on into the list of ‘Next-Big-Things’. Now, lets look at some of the key aspects of NFC Technology including what it is, how it works, NFC in the market place and it’s future.

Image credit – BlueBite

What is NFC?

NFC stands for Near Field Communication and as the name suggests, the key for this technology lies in devices being in close proximity or contact with each other. Once devices have established the proximity, which is enabled very quickly (0.1 sec), the communication is enabled. The distances in terms for NFC must be very small, usually less than an inch and as such it is different from comparable communications like Wi-Fi and Bluetooth for which there are natural comparisons.

How NFC Technology works

Near field Communication operates through short wave radio transmission. Devices that operate NFC technology like smartphones or PDAs, are equipped with an NFC chip. The process of communication between the chip in one device and the chip in another device is an electronic process called inductive coupling. This coupling is a development of an earlier technology, Radio Frequency Identification (RFID). With RFID, the technology had a ‘send and receive’ process and was used in a one directional format. NFC takes this process to the next level and allows two way communication between NFC Technology enabled devices.

NFC in the Marketplace

The current scope of NFC services is in its infancy in terms of market launch and proliferation. The global range of the product is sporadic and there are a variety of test locations which have embraced this technology, the key markets of USA and Japan are showing a steadily growing rise in the number of transactions as the technology takes hold. In recent surveys, a growing number of people have stated that they would much rather pay using their phone than carry cash. The scope is of demand is being trialled in some key market areas in Europe and Asia with a growing body of evidence revealing general product in performance in France, South Korea, Turkey, United Kingdom and Tanzania.

France offers the earliest evidence of information with NFC technology in operation, during the early May 2010. There, NFC has been used for purchases of civil services like transportation information and ticketing, similar services have been used for the system in South Korea from later in that same year. More recent progress of the technology can be seen in Turkey where, from early 2011 in Turkey up to 55,000 separate retail processes could be operated using the system. A more limited facility (15,000 outlets) mainly through banks and mobile phone companies has been in evidence in the UK through 2011 and Tanzania.

The statistical data on the number of Near Field Communication transactions globally illustrates a growing trend for usage, but one which is only at the tip of the iceberg if general predictions are to be believed. According to statistics released by Juniper Research Visa has issued 20,000,000 NFC enabled cards and Google Wallet can currently operate at 311,000 locations globally. Predictions for the number of transactions to be made using NFC devices over the coming couple of years show a sharp increase to a plausible 50,000,000 global transactions by 2014. The bulk of these will occur in Europe, US and Asia.

Brands already incorporating NFC

It is also estimated the more than 1/10th of the smart phones sold globally were NFC ready devices with many of the major brands including Blackberry, Nokia, Google and Samsung employing the technology in a range of their handsets. In addition to the handsets. the technology is a part of MasterCard and it can even be found in the Wii controller. Although this claim is yet to be verified, it is rumoured that Apple has come on board and has planned to have NFC as part of iPhone 5 and iPad 3.

Emerging markets

The growth of NFC technology is not limited to developed markets either with the rise in usage occurring in a number of emerging markets. A recent report for Financial Firm Citigroup stated that there were,

40 million mobile money users exist in Africa – the lion’s share of this is attributable to the over 20 million users of Safaricom’s M-Pesa offering in Kenya.

A further report by Communications Commission of Kenya highlighted this growing trend,

The continued growth is an indication of subscribers’ preference to mobile money transfer, which could be attributed to accessibility and affordability even to low-income earners who form the bulk of the unbanked population.

The Future of NFC

Near Field Communication is here and set to be the next big thing. Watch out for stores in your locality promoting the use of paying by handset. With key players like Google and Apple preparing themselves for this market, it is inevitable that the NFC Technology (with the era beginning with NFC Phones) will become a part of our society.