Tech Explained: Near Field Communication

This 2-minute read helps you discover the tech behind contactless payment and smart packaging.

Have you ever wondered how contactless payment works? It uses a method of wireless data transfer called Near Field Communication (NFC). This system allows two devices in close proximity to communicate without an Internet connection. The technology involved in NFC is based on the same technology used in Radio Frequency Identification (RFID) chips.

Both RFID and NFC are based on the relationship between electricity and magnetism. The movement of electrons can create a magnetic field, and conversely, a magnetic field can create electrical current. This relationship is called inductive coupling – the magnetic field inducts a current. With an RFID tag, an electronic reader generates a magnetic field. When an RFID tag comes close to this field, electricity is induced within the RFID tag. In passive RFID, the tag must be placed near a reader to activate. In active RFID, the tags use internal batteries to broadcast radio waves to the reader. The reader picks up the tag’s radio waves and interprets the frequencies as meaningful data.

NFC builds on this technology. Once an NFC chip is activated (which can happen by turning on an app or by bringing the device containing the NFC chip near a reader), electricity flows through the chip, generating a weak magnetic field. The field then induces electricity and creates a radio field. The radio field generated by one chip interacts with the field generated by the reader. The reader can then detect and decode the information in the radio field.

The advantage of NFC over Bluetooth is that it runs on a very small amount of power. This is important, because someday smart devices equipped with NFC may replace all types of payment cards. If this smart wallet then ran out of power, it could leave users stranded. Another advantage is that an active NFC device can only communicate with one target device at a time. Other NFC devices will ignore the communication.

One security concern with NFC is someone stealing a person’s data simply by standing next to them. This requires the devices to be with just an inch or two of each other – not easy. Keeping your NFC-enabled cards or device in a protective sleeve (to block the radio waves) will prevent even this.

Today, the rush is on to develop more NFC-enabled apps and devices that will let users pay for transactions by swiping. Perhaps the most well-known are Android Pay and Apple Pay. But payment is not the only use for NFC. For example, some collectable toys now come with NFC functionality. Waving these figurines over gaming consoles allows players to enter the game, bringing the figures ‘to life’. Apps like Google’s Ice Cream Sandwich allow for the transfer of photos, contacts and directions simply by holding two phones together. At Springwise, we have seen other uses for NFC. These include implanted chips used for payment and NFC-enabled temporary tattoos. Will NFC one day be standard in almost all smart devices?