NFC – Impact that matters, but not yet

Eric Liggett
General Manager

Some of us are already up to speed as to what Near Field Communication (NFC) is, and how it works, but others are just now catching up with the power of NFC. NFC in its basic form is a technology that allows devices to exchange data. The technology uses a short-range, low power wireless link which evolved from radio-frequency identification (RFID) technology. It allows for transfers of small amounts of data between two devices held a few inches apart or by being tapped together. The technology differs from Bluetooth in that there is no code pairing between devices. Applications using NFC are trending towards making payments for goods and services using a mobile device.

This application allows consumers to tap their phone on a payment station in a retail store, subway terminal or coffee shop. By touching the payment station with a mobile device the payment station is able to recognize your account (as well as purchasing habits and frequently traveled routes for example) and take payment through an app on your phone. In another example of how NFC tech is being used, taxi cabs in New York, Boston and Chicago are being installed with video advertising screens which use NFC. By tapping the screens with their mobile device, riders are able to download apps, information, coupons, maps, music, videos and much more.

The Japanese are early adopters of most new mobile technologies, and NFC is no different. 85% of Japanese Smartphone owners have adopted NFC, while U.S. penetration lags at 10% – 15%. In the U.S., adoption will take some time because of the technology’s obscurity. Another factor driving slow adoption in the US is many mobile phones aren’t enabled with NFC technology. If you’re an iPhone owner you probably already know this.

NFC technology will grow and change over time and we’ll see more and more applications driven by it. In order for NFC to fully blossom, it will have to become ingrained into commerce, applications and more NFC enabled mobile phones will have to be in the hands of consumers. Either way, NFC will grow rapidly, and we’ll all be able to enjoy the conveniences it provides.

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