Contents
EXECUTIVE SUMMARY...........................................................................................................................2
INTRODUCTION AND BACKGROUND.....................................................................................................3
FEATURES OF NFC..................................................................................................................................4
THE NFC ARCHITECTURE........................................................................................................................5
COMPARING NFC WITH OTHER SIMILAR WIRELESS TECHNOLOGIES....................................................6
APPLICATIONS OF NFC TECHNOLOGY....................................................................................................7
BENEFITS OF NFC TECHNOLOGY............................................................................................................8
CHALLENGES OF THE NFC TECHNOLOGY.............................................................................................10
FUTURE DEVELOPMENTS OF NFC........................................................................................................11
ECONOMIC, SOCIAL AND TECHNOLOGICAL IMPLICATIONS OF THE NFC TECHNOLOGY......................11
CONCLUSION.......................................................................................................................................12
REFERENCES........................................................................................................................................13
EXECUTIVE SUMMARY
The recent surge in the use of mobile devices has been rising tremendously in the recent
years. This steady increase has consequentially increased the number of mobile devices
which support the Near Field Communication (NFC) technology. This is an intuitive
technology which permits the mobile phone to perform other functions through connectivity.
These functions include contactless payments, storage and retrieval of information and
sending and receiving of data. The major benefit to consumers is that less time will be spent
at payment tills in shopping centres while enhancing social networking. Business
organisations can reap from this technology as it will enhance their productivity and lessen
the costs of running their businesses. NFC is currently bridging the gap between the physical
and virtual worlds. Challenges identified with this technology pointed security concerns and
interest harmonisation issues as the main obstacles inhibiting its proper market proliferation.
However more research is currently on-going to cater effectively for the issues identified.
INTRODUCTION AND BACKGROUND
The growing trend in technologies has afforded convenience to the present modes of
operation for individuals and businesses alike all over the world. The use of the technological
advancements and their facilitating information technologies and systems to perform data
processing and transactional activities has obviously yielded good fruits by simplifying and
quickening the way tasks are executed. These advancements have resulted in many
successful mechanisms which are now in place and widely utilised for the purpose of
transactions. Such mechanisms include the online payment modules, mobile applications for
payments, smart cards and the Radio Frequency Identification (RFID). These payment
mechanisms were all developed and advanced towards facilitating the available payment
options for users irrespective of time and location (Ferdianti et al 2013).
Before now, customers at shopping centres enjoy only the convenience that a credit or debit
card can afford them using PoS terminals. This hitherto convenience, has now been made
obsolete by the emergence of the Near Field Communication (NFC) which has made
modern day transactions more convenient, comfortable and faster by applying digital
technologies on smartphones. As the name implies, the NFC is a short range wireless
technology that is used to exchange data between supported devices. A definition from the
NFC forum states that “NFC is a standards-based, short range wireless technology that
permits for safe two-way interactions among electronic devices that are close to each other”
(Jackson and Riordan 2014). Ok et al (2010) defined it as a short range wireless
communication technology which evolved from the RFID that facilitates convenient short
range communication between electronic devices. A more elaborate definition provided by
the Mobile Burn forum (2013) posits that it is “a short range wireless RFID technology that
makes use of electromagnetic radio fields instead of the typical direct radio transmissions
used by previous related technologies. It is meant for applications where a physical touch, or
close to it, is necessary for security purposes”. It is pertinent to be noted at this juncture, that
the two recurring words in the definitions above are “short-range and RFID”. The use of
short-range emphasises the importance of the word “near” in its name and the use of RFID
indicates that it is an advancement based on the RFID technology. However, NFC differs
from RFID in that while the latter is focused on identification, NFC is based on interaction.
Also, RFID encapsulates a broad range of different types of chip and antenna combinations
with enormously varying radio frequencies, data encoding methods for the chips and reading
distance while the NFC tags are very well defined and specified by the NFC Forum but can
be considered as a subset of RFID (Identive NFC 2013). The NFC technology is mainly
configured to be used in mobile phones for payments and is embedded with an electronic
wallet as well as for facilitating connection between Bluetooth devices hence making the
orthodox pairing of Bluetooth devices obsolete. This technology is presently being advanced
by the NFC Forum which was founded in 2004 by Sony, Nokia and Phillips. The forum
creates and develops the technical specifications that those making NFC compatible devices
and tags must adhere to (Wozniaki 2014).
Near Field Communication bases its functionality on the concept of activation and enabling
through proximity. Benyo et al (2007) posits that although the NFC concept is a simple
theory, it is shrouded with controversy as various organisations in different industries are
eager to acquire a sense of the long-term business case of the technology. It is believed to
possess the key to the future of a smarter and wireless next generation of products that
enhance the lifestyles of its users. More companies such as PayPal and Google have
started offering NFC services which indicates that more people will be willing to try this new
technology and more businesses will solicit for its use. So far, a form of the technology,
known as Felica, is popular in Japan and it is presumed that the NFC services will
commence in the United States of America as a simple contactless payment system within
the next few years (Wozniaki 2014).
FEATURES OF NFC
In order to facilitate the fast and effective transfer of data between two compliant devices,
the NFC technology connects both devices just as in Bluetooth but in this case the maximum
distance allowed for the two connecting devices is 10cm quite unlike the Bluetooth which
permits for distances up to 30 metres. However, the pairing activity required in the Bluetooth
is skipped in the NFC thereby allowing for faster and easier connection. More so, the
frequency obtainable in the technology offers data transfer speeds of 106Kbs, 212Kbs and
424Kbs. This shows that the NFC technology is a hybrid of the smartcard and the reader
which is basically implanted in the device (Febriani et al 2012). Other features of the NFC
technology include
1. It is a touch based RFID technology that operates at a frequency of about 13.56MHz.
2. It trends in a well synchronised two-way communication (read and write) manner.
3. The design of the technology is specifically meant for short distance wireless
communications.
4. It is compatible with the contactless RFID technology of today.
5. It permits easy interaction between both self-powered and non-self-powered smart
objects.
6. It facilitates faster and easier connections between two compatible devices.
7. Its functionalities do not require any line of sight for effectiveness.
8. It is backwardly compatible with RFID systems of yesteryears.
9. It operates on a communication signal interface using a general protocol flow
(Jackson and Riordan 2014)
THE NFC ARCHITECTURE
The NFC chip is quite versatile in its architecture. It can be located in several places which
includes embodiment in smartphones, inclusion in SIM cards as well as in removable flash
cards. However, the most popular location is the embodiments in smartphones which is
believed to be caused by the non-transferrable nature of mobile phones as well as the
constituent bodies of the NFC forum who are mainly mobile phone manufacturers (Wozniaki
2014). The architecture behind the functionality of this technology in mobile phones is
illustrated in the figure below
The configuration of the NFC architecture in mobile devices is displayed in the figure above
with its interactions with the external environment. The plan shows that the system is made
up of a chip which communicates with the operating system and a secure element which is
embedded with a “Mifare 4K Card” and a “Java” Card (Ruiz et al 2009). The various kinds of
interaction established between the device and its external environment are as follows
1) On touching a tag, the phone collects information and then
a. The software in the device can utilise the information obtained for executing tasks
such as VCard collection and storing contacts or for connecting and activating an
internet service through GPRS.
b. The information gotten is managed by a midlet present in the secure element
which uses it to carry out various services such as file storage in the device or in
the memory of the card phone.
2) When the device comes in contact with an NFC enabled reader, information is
exchanged which facilitates the execution of various services thus
a. Applying the NFC software in the phone or the midlet in the secure element as
means of sending out information.
b. Applying the phone’s NFC software or the secure element’s midlet as means of
receiving and managing information obtained from the reader.
c. Peer to peer communication can be established with the reader.
Analyses of information and disbursement of the requests sent by the device is carried out
by a service manager which is usually connected to the reader (Ruiz et al 2009)
The three modes of operational standards for the NFC technology as identified by Ok et al
(2010) are;
a. The peer to peer mode which permits mobile devices to exchange data by merely
touching two NFC compliant smartphones together.
b. The read/write mode which allows an active device to gather up information from a
passive one such as transferring data from an NFC tag to a mobile device and vice
versa.
c. The card emulation mode which forms the foundation of utilising a smartphone for
the purpose of contactless payments. This characteristically heightens its potential
for contactless commerce. Here, data is transferred from a mobile device to an NFC
reader.
COMPARING NFC WITH OTHER SIMILAR WIRELESS
TECHNOLOGIES
When compared to other similar wireless technologies, NFC has a faster set-up time and
better usability, more functionalities and an overall best consumer experience. Madlmayr et
al (2008) in their comparison of NFC with Bluetooth, RFID and WiFi pointed out that the fast
and automated connection attribute of NFC gives it an edge over the other wireless
technologies. However, NFC can be used to automatically set up a Bluetooth or WiFi
connection. In this case, it will serve as an enabler of Bluetooth or WiFi. Dubey et al (2011)
also performed some comparative studies of NFC with other similar technologies and their
findings are presented in the table below.
As can be seen from the table above, the features of NFC are somewhat similar to that of
the RFID. This proves that NFC originated from the RFID technology but as earlier
mentioned, their main difference lies in the fact that while NFC is based on interaction, RFID
is focused on identification.
NFC TECHNOLOGY APPLICATIONS
The NFC Forum (2014) pointed out that the edge NFC has over other connectivity
technologies is found in the fast and easy modes of operations inherent in it. It is expected
that this feature will popularise this technology for the purpose of transactions. Based on
this, the up to date applications of the NFC technology are classified into four which are;
1. Touch and Go – This is basically used to gain access to events or transport means. It
utilises the storage and retrieval functionality of the technology whereby the device
which contains the access code for such events are brought close to an NFC reader
which recognises it and grants the bearer access to the function. This application
further encompasses the capture of simple data which entails getting information
from a smart poster (Blog NFC 2014; Falke et al 2007).
2. Touch and Confirm – This application is the most popular of the NFC technology
functionalities. It advances the utilisation of mobile payments (from a mobile wallet) in
which the bearer is required to confirm the transaction by confirming it with a
password or merely accepting it (Blog NFC 2014; Falke et al 2007).
3. Touch and Connect – This application uses the peer to peer operation mode to
facilitate the exchange of data between two NFC enabled devices. Social networking
is enhanced by this application (Blog NFC 2014; Falke et al 2007).
4. Touch and Explore – This application allows the user to explore the various
functionalities that the NFC technology has on offer (Blog NFC 2014; Falke et al
2007).
BENEFITS OF NFC TECHNOLOGY
The popularity that the NFC technology is gaining is not unconnected to the benefits (actual,
presumed and potential) that it has on offer for its current and intending users. Based on
this, many researchers in this field have come up with various advantages that the users of
the NFC technology stand to gain from it. The NFC communication website (2014) theorised
three main benefits of NFC to include
1. Ease of Use – This is by far the most obvious benefit of this technology as the
contactless payment systems it has created and developed facilitates its ease of use.
This will eradicate the need to go around with multiple credit cards and eliminate the
rigour of searching for the right credit card to use during purchases. More so, this
technology eliminates the loss that may arise from holding physical tickets and
subway passes. Finally the ability to store details of reward cards and coupons into
an NFC enabled phone takes away the hassle of carrying multiple cards and
coupons around. This enhances shopping and gets rid of or alleviates the
bottlenecks that are constant features of major shopping centres.
2. Versatility – One of the most important aspects of near field communication
technology is perhaps its versatility. The ease of use is important to convince people
to stick with the technology, but it needs to cover a variety of uses for the popularity
of this technology to really gain grounds. Customers can check out a store, purchase
and load tickets to events on their smartphones, board the subway, read information
from a smart poster and perform many other tasks all from a single device. <any
people already own smartphones and with the power that NFC brings to it, these
individuals can get almost everything they need at the tip of their fingers without
having to lug around ticket shops or parking passes. This technology can even
connect with friends easily to share information, play games and transfer data. NFC
strives to encapsulate both work and play which happens to be a vital factor in the
creation of its success.
3. Security – The idea of putting all information (credit and debit cards, photo IDs,
tickets and keys) sounds dangerous at an initial glance. But a meticulous look at it
shows that it is quite safer than wallets and purses/handbags. This is because a thief
will have instant access to the contents of the purse or wallet when it is stolen but not
for a smartphone which is usually protected by passwords for privacy and security
reasons. No criminal can use such cards if the phone cannot be unlocked.
Additionally, NFC often creates a secure channel for communication and makes use
of data encryption when sending information from one device to another. This
militates against the activities of hackers from stealing the information stored on it.
Finally, the storage of information on one device cuts down the risk of losing or
misplacing a credit or debit card while juggling or switching between cards for
different purchases. It is a lot harder for a criminal to swipe a smartphone than an
actual credit or debit card. Furthermore, the use of GPS to locate some smartphones
has made the tracking down and recovery of lost smartphones with its embedded
data more possible and faster than trying to recover a lost wallet, purse or credit
card.
Ok et al (2010) presented a comprehensive result from their study of the benefits and future
scenarios of the NFC technology based on the three modes of operations. The summary of
their findings is presented in the table below which shows that there are many potential
applications of NFC technology ranging from access control to gossiping.
CHALLENGES OF THE NFC TECHNOLOGY
The major setbacks with this technology are mostly security inclined. The overall consumer
perception of this product is that its ease of use and effectiveness can also be explored if it
falls into the wrong hands. Some of the perceived challenges of this technology are
described below
a. There is an issue of cloning in using this technology. The fact that it can be cloned
easily renders it vulnerable to the activities of cyber criminals. This is further
complicated by its ease of use whereby little or no confirmation is required to pull out
a transaction once a connection is established. This singular reason can make
business organisations to shy away from using this technology for business critical
solutions. This implies that the NFC technology, to an extent, does not benefit
business enterprises (Jackson and Riordan 2014). Madlmayr et al (2008) listed
seven cases that are vulnerable to attack which are relay data transferred over the
radio frequency, transactions over NFC peer links, skimming of applications in the
secure element, issues emanating from the fixed unique ID, managing in-device
security, phishing and denial of service.
b. Another disturbing challenge to the usage of this technology is that of uncontrolled
surveillance. The instantaneous connection nature of NFC hardly offers the user the
choice of controlling when, where and how to make use of it.The implication here is
that users have to be vigilant in order not to trigger unwanted transactions (Jackson
and Riordan 2014). Furthermore, Siira and Tormanen (2010) regard tag
management as one of the main challenges when creating an application with free
tag implementation.
c. Another obstacle stalling the proper adoption of this technology for payments is the
scarcity of NFC-enabled check out systems. Also, NFC will heighten the competition
in the global credit card sector which can lead to a lack of standardisation (Identive
NFC 2013). Benyo (2009) further pointed out that another major stumbling block to
the rapid proliferation of this technology in the market is that there is no business
model for key stakeholders that will be able to cater for potential conflicts and
harmonise diverse interests. More so, Juntunen et al (2010) identified some critical
issues that can affect the commercialisation of NFC technology to include scarcity of
handsets that support the newest standards, vague revenue logics and limited
number of current NFC services that are appealing to the consumers.
d. The idea of putting so much information on a single device means that much
importance will be attached to it. Any loss of such device due to carelessness or
activities of hoodlums will have grave consequences on the consumer. Even if the
finder/thief cannot get access to the information stored on the device, the process of
recovering such information will be devastating on the owner (Identive NFC 2013;
Jackson and Riordan 2014).
e. Another pending issue with this technology is that users cannot make use of their
devices for other functions when a near field communication is taking place.
Currently, this is being sorted out so that the device’s light and/or vibrator can be
applied for notifying users of the status and progress of the exchange (Kostakos and
O’Neill 2007).
f. Finally, the success of this technology is highly dependent on its rate of adoption
both by the consumers and traders alike which will facilitate the development of the
required infrastructure. Much sensitisation exercises still need to be conducted to
create enough awareness that will make NFC a success as the ignorance level for it
is still quite high (Ondrus and Pigneur 2007).
FUTURE TRENDS OF NFC
Despite the truth that the prescribed uses of this technology are still at an embryonic stage, it
is pertinent that its future developments are noted. Some of these are mentioned below.
1. Enhanced application of Google wallet – Consumers of the Google wallet application
will be able to integrate this technology for storing credit card and loyalty card
information which can then be used at enabled terminals for transactions (Febriani et
al 2012). In a bid to keep up with the competition, other credit card companies will
emulate this thereby enhancing payments for goods generally.
2. Remote control – Febriani et al (2012) opined that “another future potential use for
NFC also includes the ability to control devices around the home. It will facilitate
easier unlocking of a house and the turning on/off of utilities when an NFC-enabled
device is passed over the sensors of such appliances and this needs to be preceded
by encoding the NFC-device with the appliance’s operational codes”. Although it is
argued that more havoc should be expected if such devices fall into the wrong hands,
its ease of use and safety measures makes it worth considering.
3. Social Benefits – Contact details are easily exchanged with the use of the NFC
technology. Its market proliferation will definitely change the way contact details are
swapped and eliminate the rigours of manual exchange of details as well as enhance
social networking (Chandler 2013). Additionally, the peer to peer mode will facilitate
gossiping in the future as identified by Ok et al (2010)
4. Mapping – It is expected that this technology can be mapped to other protocols of
communication in order to enhance the logical link control that accompanies
segmentation support and addressing (PC Advisor 2013). The implication of this
anticipated functionality is that connectivity will be quicker, more secure and more
advanced.
ECONOMIC, SOCIAL AND TECHNOLOGICAL IMPLICATIONS
OF THE NFC TECHNOLOGY
Economic – This technology will boost the operations of business organisations thereby
increasing their productivity. Till clerks will be able to serve more people within a given time
and costs will be lowered as less people will now be required to do the same jobs that more
people did previously. More so, physical activities like over-the-counter ticket purchase will
be reduced. Increased productivity and reduced costs implies bigger profits for the
organisations.
Social – As previously identified, this technology enhances socialisation by easy swap of
contact details and gossiping. Such activities which are normally done covertly will be
enhanced by NFC as no other party, except those invited, can get access to what is being
discussed. The implication here is that people will talk less when socialising.
Technological – The obvious technological implication here is that more mobile phone
makers will integrate this technology into their devices. This is expected to extend to tablets
and any other handheld device. Also, more research on how to improve this technology will
be conducted and newer versions, which will rectify the flaws in the older ones, will be
produced and upgraded to.
CONCLUSION
This report has exhaustively studied the emergence and proliferation of the NFC technology
in the technological and business world of today. Findings show that NFC the potentials of
this technology are enormous and is already breaking new frontiers in the technological
world of connectivity. Although the potentials are currently not optimally harnessed, it still
leads in comparison to other similar technologies. The usefulness of this technology ranges
from the fast and easier contactless payment, enhanced storage and retrieval of information,
sourcing of information from smart posters to easy sending and receiving of data from
enabled devices which facilitates social networking activities. However, some issues have
been identified with the emergence of this technology which hinder its proper adoption to
include security concerns, uncontrollable surveillance and tag management, harmonisation
of diverse interests for adopting the technology, multitasking issues, limited awareness of the
functionalities of NFC to the limited availability of NFC compatible devices. Nonetheless, the
future of the NFC technology appears bright as more research are currently being conducted
which will correct the issues identified and make it the trail blazer in the technology world of
fast connectivity.
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