What is NFC & how does it work?

NFC payment systems have managed to marvel the entire world with their ability to provide for fast cashless transactions with just a tap of a smartphone. The number of NFC mobile payment users projected as 166 million for 2018 is proof for the fact that smartphone users absolutely love this quick & easy payment system. Brands like Samsung, Apple, and Google have also provided validation to the efficiency of NFC technology by incorporating NFC based payment system in their mobile wallets. A technology that has fascinated users and brands alike is worth mulling over.

So what is NFC?

NFC is short for Near field communication, which refers to a technology that allows wireless communication between two devices using electromagnetic fields. NFC being a derivative of RFID (Radio Frequency Identification) technology is intended to provide a more secure transmission between the devices with its reduced transmission range (4cm).

How does NFC work?

Transmission of data via NFC technology requires two NFC enabled devices: a transmitting device and a receiving device. For example, an NFC tag/sticker and a smartphone. In the case of an NFC tag and a smartphone, the NFC tag is a passive device which can only transmit the data but cannot receive it whereas the smartphone is an active NFC device capable of both receiving the signals from the NFC tag and also transmitting the data to other NFC enabled smartphones.

While a Bluetooth device works identically, what makes NFC unique is the fact that it does not require device pairing and permission to transmit data. All the user has to do for receiving information or making payment via NFC technology is to tap the transmitting device with an NFC compatible smartphone.

Here are the two ways that communication with NFC technology works:

One-way communication:

It requires a passive NFC device and an active NFC device. The communication between an NFC tag and an NFC-enabled smartphone, an NFC payment card, and a card reader are examples of one-way communication.

Two-way communication:

It requires two active NFC devices. The communication between two NFC-enabled smartphones for file transfer is an example of two-way communication.

How to start using NFC?

Before you start using NFC, you need to first figure out if your smartphone device is compatible with NFC.

Check out the list of phones compatible with NFC

How to use NFC on Android devices?

You need to first enable the NFC option from your Android smartphone’s Settings for your phone to start reading the NFC tags with a tap. After you have enabled the NFC option, all you have to do is tap the back of your smartphone on any NFC tag to see the marketing campaign linked to it.

How to use NFC on iPhone devices?

The latest models of iPhone such as the iPhone XS, XS Max, and XR can natively read an NFC tag without requiring an app, while the older models would need to download a 3rd party app for reading an NFC tag.

What can I use NFC for?

Making payments

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NFC technology is most famous for its application in cashless and cardless payments via mobile devices. NFC enables businesses to assist customers in a faster purchase by letting them make payment with just a tap of their phone. NFC payment system has helped numerous retailers in differentiating themselves from competitors and delivering better customer experience.

Initiate a phone call

NFC tags can be linked to the dialer with a phone number pre-recorded to enable users in effortlessly initiating phone calls to your customer support. Sharing numbers through NFC is also a frictionless way of exchanging contacts among friends and acquaintances.

View an image gallery

NFC tags can also be linked to image galleries to help users share the photos they have clicked among their peers. Businesses can use this feature to display an array of product pictures that would help users make a better purchase decision.

View a PDF document

This feature is especially useful for students who like to share class notes among their group in PDF format.

NFC tags on posters that lead to a PDF document usually contain an in-depth document on product ingredients, a how-to guide on different ways of using a product or styling a piece of apparel, and so on.

Navigate to a location

Indoor navigation through NFC technology is a brilliant way of delivering a personalized shopping experience by helping customers to find the aisle in which the required product is placed and navigate without any hassles.

Alternatively, NFC posters and banners linked to Google maps can be placed on strategic locations to help users locate your nearest outlet with just a tap of their phone.

Launch an app

Marketers can use NFC technology to boost their app downloads by driving users to the app-store or alternatively launch their business app when a customer taps on the NFC poster to help customers shop from wherever they are at the moment.

How to use NFC, QR codes and BLE Beacons to boost millennial engagement

Start a chatbot conversation

Directing users to a URL using NFC is probably one of the basic use-cases. But, what if you could integrate a chatbot to ensure a far more engaging consumer experience?

BotXO, a software that empowers brands to build conversational AI chatbots, recently implemented an NFC powered visitor management system. When guests tap the NFC tag with their smartphones, they are directed to a chatbot that asks for their name and company and collects feedback on their way out.

Person scanning an NFC tag on a door using a smartphone.

This concept can be easily replicated and used at events, museums, schools and shopping malls to guide users, collect feedback and engage with them to improve customer engagement.

Conclusion

According to Statista reports, NFC & other contactless technologies are expected to generate a transaction value of around 190 billion U.S. dollars in 2021. Besides the contactless payment systems, we can attribute the rising popularity of NFC technology in the proximity marketing industry to its ability to deliver marketing campaigns without requiring an app.

With so many possibilities offered by NFC technology ranging from payments to proximity marketing, NFC is bound to become the new favorite technology for marketers across the globe.

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