New generation smartphones: Changing Device Interaction with Native NFC Capability
By: Desley Mooij
Tags: Blockchain, Smartphones, Payments, Retail, Nfc

The guy just ahead of you waved his smartphone and paid for his coffee at Starbucks, and that’s not all! Remember the other day when that lady walked out with her groceries through Walmart’s Mobile Express lane without standing in the queue. As absurd as it may look to someone not using mobile wallets, this is pretty much the future of mobile payments.

NFC- Near-Field Communication is transforming mobile payments throughout the world.

NFC or near-field communication is a communication technology that allows transfer of data between two devices by bringing them within 4 cm of each other. The technology is increasingly available in most of the latest smartphones, courtesy of the fact that top smartphone companies back two of the top 10 mobile payment solutions.

A Brief Overview of the NFC Technology

In simple terms, it’s a peer-to-peer data transfer technology done over radio waves by keeping the two devices close to each other, with one of these devices being a smartphone or smart device and the other is usually a passive electronic tag. As far as the history of NFC goes, it is a successor of the radio-frequency identification (RFID) technology, with NFC being specifically designed for smartphones.

NFC and Smartphones

NFC, or rather RFID, was first patented in 1983 but, the technology didn’t see any significant innovation until the early 2000s. However, ever since the establishment of NFC forum, the technology has seen a major uplift, and in fact, it’s a part of most of the modern smartphones.

As of now, there’s a vast list of smartphones that support NFC technology, including brands like Apple, Google, HTC, Samsung, Sony, Huawei, Microsoft, and Nokia among others.

One of the latest development is in that of Apple’s iPhone devices. Apple has in-built NFC feature since the launch of iPhone 6, but it was added to facilitate payments through Apple Pay only. In its latest iOS 11 update, Apple extended NFC tag reading abilities for its iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X devices. While Apple doesn’t have native NFC scanning ability, requires an app, it is quite likely to introduce the feature in upcoming models.

Android phones have fared better, regarding the adoption and evolution of NFC, with features like Android Beam available since the release of Android 4.0. Android Beam takes NFC to a new level, allowing users to transfer photos, files, and videos, by using both NFC and Bluetooth services. A majority of medium to higher smartphone models come with in-built NFC chips, allowing users to enjoy features like tag reading, mobile payments, and data transfer.

Use Cases of NFC/RFID

While smartphone mobile payments are the most common use of NFC at the moment, the technology itself holds immense potential for future. Some of its use cases have already received mass appreciation, including

Mobile payments: One of the primary applications of the NFC technology is in the mobile payment industry, and it has seen massive growth in the past couple of years. A report from GSMA expected mobile payments to reach $1.3 trillion in 2017, driven partly by NFC and similar identity management services.

Public transportation: NFC has already made its way in the public transportation domain, with countries such as the U.S, Germany, and Canada being some of the early-adopters of the technology.

Smart devices (Apple watch): Smart device industry is another primary adopter of the NFC technology, with products like Apple Watch, which allows its users to make Apple Pay payments by just tapping on it.

Advertisement signboards: Battersea’s digital dog campaign run using RFID tags is one of the best examples of using RFID technology for billboards. The uses of NFC-backed sale boards in real estate is another favorite use case.

Retail industry: The retail sector is aggressive adopting NFC/RFID technology, with players like Amazon, Macy’s, Neiman Marcus, and WalMart using RFID/NFC technology for multiple functions.

The automotive industry is using NFC extensively in the past couple of years, although its primary adoption is seen in luxury brands only. The keyless vehicle entry system is one of the best examples of NFC in the automotive industry. More than 5.19 million automobiles with NFC-enabled systems are likely to exist by 2021.

What’s even more exciting is to see innovative implementations of NFC technology with other cutting-edge technologies such as blockchain. Seal, a blockchain-backed product authentication platform, combines the features of NFC technology with blockchain, creating the best of both. One of the potential use cases for Seal’s blockchain-powered NFC platform is product authentication, allowing users to access product information with a simple scan. All the details of the product are stored on Seal’s blockchain, ensuring zero tampering while facilitating easy product verification. Since the blockchain works as a distributed ledger, any data stored on it is almost impossible to tamper.

Future of NFC Adoption

NFC is solidifying its feet in multiple industries. In addition to its current usage, NFC has strong potential for handling concerns such as counterfeiting. According to some estimates, the global fake goods trade is worth close to half a trillion dollars annually, and it’s not limited to a single industry. NFC could be an active countermeasure against counterfeiting, allowing customers to access product information instantly. Seal’s blockchain-enabled NFC tag reading capability is one such deterrent against counterfeiting. It stores product information on the blockchain, and access to this info is available on scanning with a smartphone.

With the lower cost of installation and management, mass adoption is inevitable in future. What’s interesting is to see how different industries use the enormous potential of NFC technology through technological breakthroughs in future.