As usage of Near field communications is poised to increase in North America, Sync takes a look at what NFC is, and explains how it will affect the way people use their phones.
It’s the past, present, and future of payments. NFC is the past because it’s far from new, the present because it’s already rolling-out, and the future because it really could become a standard feature on mobile devices.
Near-field communications (NFC) is a wireless technology that shares information between nearby devices, typically a few centimetres. NFC creates secure, short-range transmission of information, and the technology is coming to mobile phones. With NFC, someone can place a phone centimetres above a register and instantly pay for an item. There’s no fumbling for a wallet or entering a pin code; just swipe and go.
Japanese vendors have supported NFC in phones for years, and this form of contact-less payment is finally jumping to North America thanks to major pushes from Apple and Google. Apple is rumoured to be adding NFC chips to the next version of the iPhone, and the Nexus S from Google also supports it. And while I’m sure everyone is intrigued by the prospect of paying for groceries, near-field communications will do more than just turn your phone into a credit card. Consider these three major use cases for NFC.
Pay for petrol and pizza securely
NFC chips in phones will let customers make purchases by putting their phone directly over a receiver and having the payment deducted from a corresponding account. Apple, Google, PayPal, and virtually all banking institutions will embrace this technology because mobile phones are becoming indispensable to our lives. Some people grab their phones before they grab wallets, so this will merge elements from the two. Because money is the great motivator for companies, they will want to be involved in the way consumers spend it.
You may naturally worry about security, but it’s called near-field for a reason. NFC allows your banking info to be sent only 3-20 centimetres, so it’s unlikely that criminals will be able to intercept your account while they are hiding 20 feet away. However, researchers have found that there’s risk of “eavesdropping” to extend the range of NFC signals, so companies provide additional security by encrypting all data sent (the same way you see SSL tags when banking online).
Instantly exchange contact information
The common networking ritual is to meet, find common ground, and exchange business cards before walking away. Put those business cards back in your pocket; your phone can handle that. NFC will provide a way for people to swap contact information in seconds by placing phones within close proximity. Bump already provides virtual exchange through an app, but this would not require the awkward physical contact of tapping fists to send the information. Users would place mobiles closely to send phone numbers, email, website, Skype, Twitter, and much more. And if you refuse to get rid of physical business cards, NFC in phones can scan for information embedded into cards and still store that information digitally.
Storing your transit card data
Japan has a developed mass transit system that supports NFC. Travellers in Japan can enter the train station by placing the back of their smartphone on-top of a reader that recognizes he or she has valid credits on a card. Instant access is granted, which will be valuable when someone is running to board a train before it leaves the station.
NFC makes it possible to add, monitor, and use money or credits on a transit account. It puts all activity into a central location that you are likely to always have with you and rarely ever struggle to locate. Montreal hired a company to create subway cards that use NFC, but this technology could find its way into your phone, too.
Near field communications will be a major game changer in mobile phones. Of course, everything is considered a major game changer in today’s tech climate, but NFC truly presents a rare opportunity. The growing adoption of smartphones and the promise of billions of dollars give strong incentives for companies to invest in this technology. You will be able to scan a piece of paper and be directed to a website, pay bills, or even manage reward cards from your favourite restaurant. In many ways, NFC will make your mobile phone a mobile wallet.