NFC Technology Turns Your Smartphone into a Wallet

During a recent Business Development Institute Social Marketing conference presentation on Quick Reference (QR) Codes, my co-worker asked a question about how NFC will affect the use of QR Codes. The speaker had no idea what he was asking and thought he was talking about the National Football Conference .

Near Field Communication (NFC) has been receiving a lot of hype lately, and although it has been around since 2004, many speculate we will soon be using this technology to pay for things via our phones instead of credit cards.

So What Exactly is NFC?

NFC is a technology that gives mobile devices the ability to transmit and receive data. Mobile devices that have NFC chips installed can make payments via credit cards, store brands membership IDs, and coupons. They can also be used for file sharing, electronic business cards, mobile gaming, and more.

How It Works

According to the NFC Forum,

“NFC is a short-range, standards-based wireless connectivity technology, based on Radio-frequently ID (RFID) technology that uses magnetic field induction to enable communication between electronic devices in close proximity. It provides a seamless medium for the identification protocols that validate secure data transfer. This enables users to perform intuitive, safe, contactless transactions, access digital content and connect electronic devices simply by touching or bringing devices into close proximity.

NFC operates in the standard unlicensed 13.56 MHz frequency band over a distance of up to around 20 centimetres. Currently it offers data transfer rates of 106 kbit/s, 212 kbit/s and 424 kbit/s , and higher rates are expected in the future.

For two devices to communicate using NFC, one device must have an NFC reader/writer and one must have an NFC tag. The tag is essentially an integrated circuit containing data, connected to an antenna, that can be read and written by the reader.”

What Devices Have NFC?

There are a number of phones that currently have NFC installed on them, and many more will be available soon, including the highly anticipated Galaxy Nexus Android 4.0, Ice Cream Sandwich.

Why Should I Care?

With major companies like Google, Amazon, Apple, and Microsoft exploring the possibilities of NFC, consumers and business will likely start piloting this platform soon. Google has already started to launch Google Wallet, a mobile payment system currently available on the Sprint Nexus S 4G. In addition, NJ Transit recently announced that they will be enabling travelers to pay for their fares with NFC phones equipped with Google Wallet at selected stations and on a number of bus services.

Tell us what you think. Would you use your phone instead of your wallet?