What is NFC and How Does It Work?

NFC payments

If you have been paying attention to the payment systems that you use on a daily basis to buy goods and services, you might be familiar with the concept of NFC. Generally speaking, NFC is used in the world of payment technology to allow two devices, usually a phone and a credit card terminal, to communicate in order to effectuate contact-less payment transactions.

Near Field Communication (NFC) refers to the technology that allows connected devices to communicate with each other without physical contact or configuring a connection. Over time, people have widely adopted NFC following its increased application in nearly every aspect of life. It comes with a plethora of benefits for both enterprises and individuals when it comes to data transmission. It uses methods that are established with near field communication standards to provide wireless communication between connected devices. The NFC Forum is responsible for enforcing these standards that were set in 2004 by Sony, Philips, and Nokia. These standards include FeliCa and Bluetooth, which use smart credit card processing technology and an integrated circuit to provide contact-less communications.

NFC standards are the guidelines that device manufacturers follow to ensure their devices are compatible and can work on different technologies. Manufacturers can also use NFC to increase compatibility and security of their wireless communications, especially when using different transmission methods associated with NFC technologies to transmit payment processing data. Near Field Communications technology communicates with other NFC-enabled gadgets using radio frequencies. It uses a technique referred to as a reader or interrogator to transmit radio frequencies between gadgets that are equipped with NFC technology. It’s this radio frequency that allows a mobile device to communicate with other gadgets that are NFC-enabled. An NFC-enabled device can be any mobile device such as electronic advertising posters, payment processing terminals, digital signage, tablets, or smartphones. In short, NFC technology utilizes Peer to Peer (P2P) technology to allow two devices that are compatible to communicate and exchange data with each other.
 

How Does NFC Work?

 
NFC technology is a derivative of radio frequency identification or RFID technology, which is a wireless communication technology that uses electromagnetic fields to transfer data. Some of the products that RFID is frequently embedded into include information technology, inventory tracking technologies, credit card processing machines, passports, and tollbooths. NFC technology allows devices that are close to each other to communicate and exchange files using any of NFC technologies, which include Type B, FeliCa, and Type A. While all these technologies function in the same way, their features are slightly different with the technology used in Japan.

Devices equipped with near field communication capability can either be one way or two way. One way NFC-enabled devices contain a tag, which has the information and data that other NFC-enabled device can use to communicate with one another. Unfortunately, a one-way device can’t read data or share it with another gadget. However, two-way devices that are equipped with NFC technology can read information and transmit it to other NFC-enabled gadgets. That means a gadget such as a tablet PC or smartphone can use a one-way device to read data from an NFC tag and exchange it with other devices that are equipped with the technology.

NFC technology utilizes encryption to transmit data using a secure channel and enhance data security. It’s a reliable technology when receiving or sending critical information such as the number of a credit card during a transaction. Users are recommended to install antivirus software on their device or use strong passwords that are difficult to crack when using NFC-enabled devices to transmit highly sensitive data. The reason for the increased adoption of NFC technology is its ease of use and convenience. The NFC forum continues to develop new standards to allow for the future expansion of the technology. Soon, people can expect to see NFC technologies applied in public venues such as professional buildings, malls, shopping centers, and transportation hubs. Automobile manufacturers have already begun to install NFC technologies in vehicles to increase the convenience of the automobile owners.

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