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What is NFC: Digital Payments and Communication

  • Akansha Sharma
  • Oct 07, 2023
  • RFID
What is NFC: Digital Payments and Communication

Modern age technologies and resulting digitalization of the banking system is helping us improve the traditional time-consuming process of money transfer. In India, the revolutionary UPI (Uniform Payment Interface) coupled with QR based payments have changed how mortar and brick businesses work. The technology has become so prevalent that UPI annual transactions in India have crossed billions. NFC is another such technology that has completely changed the banking system and digital payments.

NFC is not a new technology though. The first NFC-based payment process was recorded in South Korea in 1995, when the bus transportation association issued a NFC-based Upass card for passengers. NFC is a demanding technology that has revolutionized the mobile payment transfer system. It is also helping in speeding up the payment process, with its unique capability of contactless payments. NFC is the technology that can be, as an IoT communication standard, the ultimate connectivity solution.

NFC is also popular for sharing data, establishing a wireless connection, connecting devices, and smartphones, tablets, and laptops to establish communication between two networks or smart devices.

 What is NFC, and how does it work?

In 2004, Nokia, Philips, and Sony collaborated to form the NFC Forum, which brings NFC technology in front of us. In 2006, the NFC forum outlined the architecture of NFC technology. Then Nokia released its first NFC-enabled phone in 2007.

Near-field communication (NFC) is a short-range wireless technology that requires a distance of 4 cm or less to initiate communication. It shares a small amount of data between an NFC tag and a supported device or between two devices.

NFC has payment services like Google Wallet and Apple Pay, which are the best examples of contactless payment methods. Just tap to pay, and take away your wanting things that you just bought or ordered.

NFC transmits data through an electromagnetic radio field to enable two devices to establish a connection with each other. It works by combining four key elements:

1. NFC microchip in a device that works as an antenna and receiver.

2. A reader or writer that scans the environment and allows an NFC device to access data

3. A software application that uses scanned data to perform various mathematical operations receives data from the NFC chip.

4. An ISP (information service provider) manages all device communication that occurs through the ISP.

Popularity of NFC in various aspects of daily life

1. NFC in Smartphones

2. NFC in the transportation system

3. NFC in the retail sector

4. NFC in the navigation system

5. NFC in the healthcare sector 

1. NFC in Smartphones: Smartphones are popular among all of us, and implementing NFC technology on smartphones can directly increase the number of users. Enabling NFC-based payment applications on smartphones that can allow users to make transactions without handling any physical cards. Assistant-based applications on a smartphone, in which an NFC tag can signal an assistant app when we tap, such as a screen reader, text-to-speech translation, and magnifiers. 

2. NFC in Transportation System: Transportation is a vital task for everyone in their daily lives, and NFC can help the transportation system by making it more accessible to everyone. Implementing an NFC-based payment system for public transport simplifies fare payments for passengers without any challenges. The bus/train station that follows NFC technology is one more advancement that can help the transportation system. NFC tags can provide audio announcements, real-time navigation maps, and travel updates for travelers, who are physically challenged (vision or hearing).

3. NFC in the Retail Sector: NFC-supported shopping can improve the shopping experience for everyone; it can provide audio navigation information to find a particular product in a big retail store, product information, and discount offers on that product. NFC payment options, like mobile wallets, can reduce the duration of the time-consuming checkout process.

4. NFC in the Navigation System: NFC-enabled public spaces, buildings, universities, and other infrastructure can help an individual as an assistant who guides them by providing audible directions and location information. It can help a newcomer find offices, classrooms, and cabins easily.

5. NFC in the Healthcare Sector: NFC technology can benefit the healthcare sector by providing support in patient identification. NFC-based wearables like wristbands or cards can help in identifying the patient and can access their medical records, which allows doctors to personalize the treatment, which allows the healthcare sector to be more efficient and accessible.

To conclude, NFC provides a promising improvement in accessibility across various sectors while enhancing our quality of life. Near-field communication is helping various users by simplifying and accelerating the payment process. Today, hundreds of millions of cards and readers are using NFC technology in their daily lives by securing networks, monitoring buildings, preventing theft, and toll booths.

Frequently Asked Questions?

Q1) What does NFC do on a phone?

 NFC on a phone enables a touchless payment method. It allows one to share and receive information through wireless protocols, interact with an RFID card (a card with a microchip), and be used with other supported devices like room keys, wallets, etc.

Q2) Is NFC harmful?

There is no such evidence that suggests that NFC is harmful to use. It operates at a frequency of 13.56 MHz, which is a low frequency. The level of radio frequency emitted by NFC technology is so low that it is not considered harmful to your health.

Q3) Is it possible to hack NFC communication?

It is possible to hack into a device using NFC technology, although the chances are relatively low because it operates over a short distance of less than four inches. So, an attacker needs to be in close circumstances to access it. However, if an attacker can establish an NFC connection with a device, they still need permission from the user to access their data. It is always a good idea to update your device with the latest security patches. So, it will protect the device from various threats.

Q4) What are the benefits of NFC?

1. It ensures more security than traditional credit or debit cards for payments.

2. It allows users to choose from multiple cards for payments.

3. Furthermore, it has a simple setup to establish a connection between smart devices.

4. It is a difficult thing to intercept NFC communications.

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Oct 07, 2023

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