Since the announcement that Apple will be entering the digital wallet arena, many shoppers are taking a second look at the platform. This renewed interest, in turn, raises many additional questions: What is NFC technology? Is it really secure? What else can it do? The truth is, NFC technology has been around for several years, and may even be something that you’re already using.
First of all, near field communication (NFC) is a short-range wireless technology that allows two NFC enabled devices to communicate over a distance of 10cm or less. It is based on Radio Frequency Identification (RFID). There are two modes of NFC: Active Mode and Passive Mode. Active mode is when both devices create their own signal and use that to communicate. A passive device, on the other hand, merely contains information that an active device can read. Passive NFC tags (typically small stickers or fobs) are readily available for purchase and can be programmed to work alongside your NFC enabled phone or tablet to do things with a quick tap. Neat things, like turn on the light when you come home or silence your ringer and set your alarm when you place the phone on your nightstand. An NFC tag can also be programmed to contain your business card information. If you carry the tag in your wallet, you could then wave your wallet near a client or new contact’s NFC enabled device and effortlessly share the information.
NFC communication, like all forms of digital information transfer, does carry some risks. Because information is transferred “though the air,” there is the possibility of this information being snatched. Though enterprising criminals tend to love a challenge, the fact that the transmission of NFC waves can only take place over a span of about 4 inches would make snatching this data especially challenging. Advanced protection in the form of password protection, encryption, finger print scans, etc. are typically utilized with NFC communication. It is important to note, however, that the NFC standard puts the responsibility of this additional layer of security on whoever uses it. Meaning, for instance, that if you intend to use Apple Pay, you will be relying on Apple to encrypt and keep your account information safe.
Despite legitimate concerns regarding security, the possibilities for this innovation are virtually endless. Additionally, the infrastructure to support this new technology is already in place. Many existing Android devices already have NFC capabilities, and though currently locked to Apple Pay, NFC now comes standard on every iPhone 6. Modest estimates show more than half of all smartphones being NFC enabled by next year. Pair that with the fact that writable NFC tags can be purchased for as little as 50¢, and you have a technology which is well within reach of 863 million users.
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