If you visited the recent Mobile World Congress in Barcelona, you couldn't have missed the "NFC Experience."
Attendees were invited to use NFC-enabled phones as their entry badge, pay for food and drinks, get information across several NFC tags on posters, exchange contact information, etc. The city of Barcelona was made NFC-aware, with many information "tags" across the most important venues, and several thousand stores and restaurants were equipped with contactless handsets to handle mobile payments.
NFC has existed for more than 10 years, as an evolution of RFID technology. Billions of NFC-enabled cards and millions of readers are in use today, mostly for payment cards, transportation, and secure access. Despite this, we're only really starting to scratch the surface of NFC deployment and use, especially with consumers who sometimes don't even know they're using it with devices like subway fare cards. The developers at MWC would like consumers and enterprises to see some of the major advantages of NFC.
One of those advantages is speed. In comparison with Bluetooth or other protocols, the connection between two NFC devices is automatically established quickly (in less than a tenth of a second). The only requirement is proximity between devices.
The other big advantage is security. Contactless technology found on today's credit cards uses the same encryption and security found on the Chip+PIN payment cards popular in Europe. The security is so strong that credit card providers VISA and MasterCard allow NFC "wallets" such as Google Wallet to be considered as "Card Present" instead of the typical "online" transaction, lowering fees and security cost.
I had a conversation with Pedro Martínez, European business developing manager of the business unit identification of NXP. He was very excited about where NFC was headed:
2012 was a successful year for NFC, with more than 100m devices [in use]. For 2013, [the] latest analyst reports predicted approximately 280m units, and we also believe that the success story of NFC will continue, as we have encouraging signs and encouraging order levels from a number of different customers…NFC has become a standard feature in 2012, and this will be reflected in NFC shipments.
Right now, Martinez points out, the growth of NFC is mostly hardware-driven but to reach the consumer, things will have to change. "2012 was the year of OEMs, now we are entering the year of applications," Martinez said, "[This year] we will see many mobile wallet rollouts, mainly driven by MNOs... application developers and service providers will leverage this to bring NFC applications to markets."
The growth of consumer applications and digital wallets will hopefully allow retailers and financial services companies to make better use of the security and speed advantages of NFC. Better and safer credentials aren't the only advantages. As you can see from my personal experiences at MWC, there are lots of advantages to the way service can be conducted with NFC.
Thanks to the strong encryption in NFC devices, it is possible to use the NFC-enabled phones as security badges. There is real advantage to using a connected device as opposed to a small card or badge. At the Mobile World Congress, I was able to get access to the conference with a secure badge in my phone. I had to upload a picture and certify my badge with my ID when I received my credentials. Once that was done, I was able to use special express security lanes, and I was able to enjoy the show without juggling more badges or payment cards. I was able to use the device most business leaders use the most to manage all the transactions from ID to purchases in a single item.
With NFC use skyrocketing, it is time for CIOs to take a closer look. OEMs are on board and consumers are walking around with devices that have capabilities they may not even be fully aware of. It represents a great opportunity to tap into a secure, fast, new way of serving them before someone else does.