What's Next In Payments®
10:41 AM EDT November 17th, 2014


NFC -- the abbreviation for “near field communication” -- is a method of contactless communication between smartphones and similar devices that are within a certain proximity to one another (usually closer than 4 inches). Rooted in radio-frequency identification (RFID), the technology is a keystone in the ongoing evolution of mobile payments.


NFC could replace the need to carry physical credit cards at all, turning the smartphone into an all-inclusive payment device. The technology may even come to replace keys and ID badges, allowing for entry in your home or workplace. NFC chips and tags can also be used as a means of advertising or exchanging information on notice boards, food packaging, and the like. They can even be embedded into patients’ medical charts.






The predominant application today for NFC technology is contactless payment.

But it is also used in social networking situations, such as sharing contacts, photos, videos or files, and entering multiplayer mobile games.

The NFC Forum promotes the potential for NFC-enabled devices to act as electronic identity documents and keycards. Because NFC has a short range and supports encryption, it is more suitable in this regard than earlier, less private RFID systems.

Smartphones equipped with NFC can be paired with NFC tags or stickers, which can be programmed by NFC apps to automate tasks. These programs can facilitate the changing of settings on a phone, creating and transmitting text messages, launching applications, or any number of commands to be executed, limited only by the NFC app and other apps on the smartphone.

These applications are likely the most practical current uses for NFC because -- rather than relying on a company or manufacturer -- they can be utilized immediately by anyone, anywhere, with an NFC-equipped smartphone and an NFC tag.


Charles Walton is credited as the inventor of RFID, having been awarded the first patent to bear the acronym in 1983.

In 2002, RFID technology was adapted into near field communication by Sony and Phillips (then NXP Semiconductors). Two years later, in 2004, those two companies established the Near Field Communication (NFC) Forum, a group dedicated to promoting the security, ease of use, and popularity of near field communication.

In 2006, the NFC Forum produced the first set of specifications for NFC tags -- which are small objects, such as a sticker, that contain information that an NFC-compatible device (like a smartphone) can receive when waved over the tag. The same year saw the creation of specifications for the “smart” poster – which holds NFC-readable information – as well as the introduction of the first NFC-compatible cell phone, the Nokia 6131.

With the release of Android 4.4 in 2013, Google introduced a new platform for secure NFC-based transactions through host card emulation (HCE). In 2014, Apple announced its own platform for NFC-powered transactions, Apple Pay.

Return to the 100 Innovations in Payments.

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