Every successful technology needs a killer app. The internet has email to thank for getting it going, and there’s no way businesses would have embraced desktop computers in the 1990s if it wasn’t for spreadsheet software.
For NFC – short for near-field communication – the obvious killer app is contactless payments. With the appearance of NFC on iPhones – after years of Apple shunning NFC – the circle is complete; almost all new smartphones can now be used to store a virtual credit or debit card, and used to make contactless payments. So why does NFC remain such an obscure technology?
NFC is a form of low-power, short-range wireless data transfer, but it’s not a new concept. Commuters have been swiping an Oyster Card, and other contactless cards, for over a decade, while many bus companies’ ticket-cards and almost all new credit and debit cards can be swiped on payment terminals to make small transactions without the need for a PIN number.
All that’s happening is an exchange of the stored details between a card or smartphone, and a reading device in a shop, when the two are tapped against each other. In fact, there’s not much difference between NFC and Bluetooth aside from the fact that NFC only works over a couple of centimetres.
But is NFC all, and only, about the mobile wallet? It seems that way, but we were promised so much more. It was supposed to mean the end of all cards, cash and keys, and though there are now hi-tech hotels around the globe that allow guests to use their phone to gain entry to their room, NFC-powered front doors on our homes are nowhere to be seen. Nor are smart parking meters, ID bracelets in hospitals, or NFC wristbands for getting into concerts and events.
That’s despite NFC hardware being very cheap and secure; it uses the same type of secure element embedded in bank cards, ePassports and national eID cards. The latest use of NFC is in smartphones and smart watches, where Google’s Android Pay and Apple Pay use the NFC chip in the latest devices to perform exactly the same data transfer, though arguably that’s even safer; phones require use of a PIN or a built-in fingerprint sensor for added security. Safe it may be, but it’s also slow to catch-on; drop-off rates for using Apple Pay and Android Pay are very high. It seems that we’re pretty stuck in our ways when it comes to cash.
So what else can NFC be used for? The next biggest use is in linking gadgets together, with NFC often used to establish a Bluetooth link between a TV and a remote control, between home appliances, or between a WiFi router, speakers and earphones and a smartphone itself, just by physically tapping them together.
Ironically it’s Bluetooth that’s responsible for NFC not penetrating deeper into society. Bluetooth beacons allow much more data to be communicated over a much wider distance without the phone owners needing to do anything. And Samsung Pay, due to appear in the UK during 2017, uses a rival data transfer technology called MST (magnetic secure transmission). Trouble is, NFC just hasn’t had much innovation around it outside of payments.
However, there is hope for the tech, and it comes in the tiny, flexible and transparent shape of NFC tags. Incoming are NFC tags with unique IDs for prescription medication that can detect when the package has been opened (and so ensuring it’s in ‘factory sealed’ state when purchased). There are also attempts to use NFC to create high-security paper documents that can only be authenticated by certain devices, and for ways to have standalone devices safely (and instantly) link to Internet of Things networks. NFC tags have also been used on bottles of Johnnie Walker Blue Label whisky so drinkers can determine their authenticity.
But the biggest story for NFC in 2017 will be back in the payments industry. Set to become standard in the next 12 months or so are card-less withdrawals, where a phone can be used to get cash from an ATM. The growth of NFC as a technology may be slower than expected, but at least it’s beginning to become a good little earner.
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