Do you know what NFC (Near Field Communication) is?

Many of us may not be familiar with the name, but NFC is still one of the technologies that we use more or less on a daily basis. Perhaps you have an Oyster card for touching in and out of underground stations in London? Or do you use the contactless payment function on your bank card when you do your shopping? Are you maybe even one of the early adopters of Apple Pay or Android Pay on your smartphone?

These are all examples of NFC at play in our daily lives. But what does this technology mean for potential opportunities when it comes to business and software? Let’s take a look at how NFC technology can help businesses drive new and exciting functionality.

How NFC works

NFC is a form of short-range, contactless communication (also referred to as “proximity technology”) between two compatible devices. One of the devices can be passive, which means that it requires no power source, while transferring data to and from an active device a few inches away.
In a contactless payment scenario, the card is the passive device and the card terminal is the active one. By emitting a signal that looks for NFC compatible devices nearby, the card reader can pick up on the card being shown – and establish an instant connection to it.

There can also be scenarios where there are two active devices communicating with each other – as in the case of a smartphone communicating with a card reader using a bank card emulator to process a payment.

What are the main benefits of NFC?

  • The speed
    The pairing between devices is faster than Bluetooth, which means that there is an almost instantaneous connection.
  • The flexibility
    Many NFC tags are so thin they can be easily embedded into plastic cards, paper, stickers, fabric, signs or walls. They are also very durable and weather-resistant.
  • The growth

In 2016, 25% of smartphones included NFC as a feature. This may be a small number, but we can expect it to grow exponentially over the next few years as people upgrade to new phone models for this and other features.

How is NFC being used commercially?

Although we are seeing NFC being used in many different ways, analysts believe that we have only just started scratching the surface of how proximity technology can impact and improve daily life and business.

These are some examples of current NFC business applications.

  • Smart tags. There are several types of programmable tags available in the market, for pairing with NFC-enabled mobile phones – the best known example probably being Sony’s Smart Tags. These are tags that can be programmed to instruct the phone to perform any function, such as mute the sound, turn on an alarm, disconnect from WiFi, or play music.
  • Embedded advertising. Nokia has showcased NFC tags in various ways, for marketing purposes. Examples include embedding tags into movie posters for showing previews on a mobile, and using tags in clothing labels to display a mobile website with full range of colours and styles. They also placed NFC tags in street advertising, giving GPS directions to local restaurants.
  • Smart packaging is becoming a strong channel for customer engagement. Johnnie Walker and Diageo recently delivered a forward-thinking approach to NFC marketing through their Smart Bottle concept, connecting the consumer with product information, recipes, videos, promotions and more. The tag could also be used for tracking items through the supply chain.
  • Secure entry. Hotels have been trialling NFC technology for room keys for several years, both using access cards and smartphone access – although this is reported to be notoriously difficult to manage from a security standpoint.
  • Workforce Management. There are applications for tracking security patrols and other field workers using NFC-enabled phones with tags distributed across a specific site. Scantech Solutions were among the first to launch a full scale security workforce management application using NFC at various patrol sites.
  • Payments and loyalty points. As mentioned earlier, NFC is the key technology used in prepaid travel ticket systems such as Oyster card and many others. However, over the last five years, the “mobile wallet” has also become increasingly popular with the development of payment solutions in the form of Apple Pay, Android Pay, Barclaycard PayTag, EE Cash on Tap and more. There are also various trials for collecting and spending loyalty points using NFC mobile technology. (Although mobile payments are already considered by many to be safer than using a credit card, these are predicted to increase in popularity as security solutions for payments become even more refined.)
  • IoT (Internet of Things) and maintenance. The hardware around us is becoming increasingly “smart”, with the ability to communicate with the Internet as well as other devices. Adding NFC into the mix means that maintenance and support teams can track and log performance of even the smallest piece of equipment with the quick touch of a smartphone.

Identifying businesses opportunities using NFC

So what are the key factors that have played into the popularity of NFC applications, and how can we build on those to create new, successful innovations?

NFC success factors

  • The application must be easy to use, in order to encourage uptake – particularly if it involves performing a task in a way that is new and different. As an example, mobile wallet integration and rapid payments will only be used if they are quick and easy for the user to understand.
  • One of the strongest benefits of using a smartphone as an application platform is the potential to carry out a wide range of transactions conveniently from a single device. Avoid designing a “one-trick pony” when functionality can be bolted on to make the application stronger.
  • The typical NFC tag is incredibly durable and can withstand extreme temperatures. This means it can be used in all weather conditions for very long periods of time – so tag location is no obstacle.
  • The social factor. Communicating with friends, sharing information, and playing games are aspects of application development which continue to grow. A solution that can successfully harness these elements will be able to compete on a much higher scale.

Of course, as with anything, a business solution is only ever as good as its execution. You may have a great commercial idea that seems to be perfect for using proximity technology, but without a foundation of intuitive, well-designed software it may never become successful.