Thursday, 7 March 2013

NFC - A primer

Buzz seems to be growing around Near Field Communication (or NFC for short). Last week it was announced that Samsung had been given a global licence to use Visa’s payWave mobile app [1]. This could be a turning point in the use of NFC and so I thought I would take the opportunity to provide a quick overview of the technology.

What is NFC?
Put simply, NFC is a set of standards for wireless communication that enables the transfer of small amounts of data over very short ranges without the need for physical contact.

NFC is not new, it encompasses RFID (Radio frequency identification) technology which has been around since the 70s or 80s. Back in 2007 the Future Store Initiative mapped out a whole host of applications for RFID chips such as smart shelving in supermarkets enabling real-time tracking of stock levels [2]. However by and large these ideas haven't graduated to the mainstream due to the expense of the chip manufacture. Therefore for your average person on the street the most common exposure to this sort of technology has been through ticketing schemes like the Oyster card.

Why NFC? Why Now?
It is the smartphone revolution that is driving growth in use of NFC. NFC offers an advantage over QR (quick read) codes because the content can be updated easily and no extra software is required to interact with it. Moreover a scanner doesn't have to be opened giving more immediate access to content and tags can be used to automate more complicated tasks.

What can NFC be used for?
NFC has a wide range of applications, however as currently most tags can store only very limited data they tend to be better for linking to information. This means they are great for sharing links to websites, or giving phones simple instruction sets to automate tasks. The capacity of tags can however be a real limitation. The amount of information stored on your typical business card would exceed the capacity of many of the tags on sale. Of course there are ways around this, such as linking to centrally hosted information.

What are the barriers?
Perhaps the biggest barrier to NFC currently is a lack of awareness and understanding. We have run a number of projects looking at how receptive consumers would be to using NFC. Most people, once introduced to the concept, liked the idea. However very few were organically aware or had previously used NFC. In fact in a recent internal Panelbase survey of over 1,000 smartphone owners, 72% weren't sure if their phone had NFC capabilities.  This compared to only 2% who were unsure if their phone had Wi-Fi and 9% who were unsure if their phone had bluetooth or not.

Another barrier is whether people will keep NFC enabled. NFC offers significantly less battery drain when switched on than bluetooth. Manufacturers also it seems have made it less obvious to know when NFC is enabled (there is no little icon like there is for bluetooth). However the poor performance of smartphone batteries means that many consumers want to squeeze whatever extra juice they can out of their device and NFC may be the first thing to go. This means to interact with an NFC tag the user would have to re-enable NFC first.

Finally a major barrier is that there remains some uncertainty about the willingness of major mobile companies to fully support contactless payments with both Apple Passbook and Samsung Wallet not supporting NFC.

Will it catch on?
There is no doubt that there is a lot of potential for NFC to become mainstream. If companies and consumers alike put stock in NFC then it could be huge.  However if not, it will end up sidelined in the same way QR codes have been to an extent. What happens with contactless payment technologies is likely to have a major influence. 

One thing is certain, 2013 is going to be a crucial year for the future of NFC.

Dan Siddle
Research Innovation Specialist

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