Come a Little Closer: The Rise of Near Field Communications (NFC)

Near Field Communications (NFC) is quickly becoming commonplace in America. Most smartphone providers have enabled the application, and many businesses are utilizing its features, even to the point of mobile payments. So what exactly is NFC?

NFC is a system that uses RFID (tags that are placed on physical items, or ingrained in images) and allows two way communication between endpoints. Data exchange and various transactions can take place using NFC, just by bringing these tags in the proximity (4cm or less) of an NFC enabled device – like your smartphone. The major difference between NFC and Bluetooth is that NFC has a shorter range, is slightly slower, uses less power, and doesn’t require pairing.

What really makes NFC innovative is that super-small 4cm range. The short range opens up a lot of possibilities since you don’t have to worry about the signal going anywhere you don’t want it to. That improves security, so it can be used for things like processing credit card payments and unlocking doors. And it’s more flexible – for example, a poster could have many different NFC tags close together, but you would still be able to pull out your smartphone and scan just the tag you were interested in.

The application has existed for 10 years (NFC was developed by Philips and Sony in the early 2000’s) but only recently have retailers looked take NFC solutions mainstream. Many already use passive tags on articles such as clothing, allowing potential customers to scan the tag and access a webpage with more detailed information on the product. Other businesses offer discounts if the customer “checks-in” to their location, with an application such as foursquare. NFC can also be used to track buying habits (assuming the customer opts-in and signs the agreement), allowing businesses to offer customer specific discounts and promotions. More recently, businesses are considering the implication of mobile payment options . And that’s just the tip of the NFC iceberg.

Though still a relatively new concept in the United States, NFC is already quite common in Western Europe, Japan, and even Australia. Many experts believe the trend will take full effect by 2015 in the United States. Get your smartphones ready!