Even after a decade since the term Near Field Communication (NFC) was introduced, I still have clients, advisors and prospective customers ask me if NFC can be used to track physical location or operate at multiple meter ranges. Although NFC is considered a subset of Radio Frequency Identification (RFID) in the hierarchy of electrical engineering applications, there are several distinctions that make them suitable to different applications.

NFC is designed to realize a fundamentally different set of features than those supported by traditional UHF RFID. The most critical thing to understand when thinking about NFC is that the short range (10 cm or less) is a feature of the technology, not a limitation. With proximity a prerequisite for proper functionality, NFC can address all the applications that the earlier commercially mature technologies could not, and with proper security. In early implementations, security was not a required feature since low cost chips were essential to the technology’s commercial success. The target market was Electronic Product Codes, (EPCs) with systems designed to support extended range, fast read cycles and tag singulation. Since security would break both the budget for tag cost and electrical power, it wasn’t a feature of early RFID systems.

One simple explanation I find helps explain the difference is that RFID is a wireless barcode, and NFC is a wireless smartcard.

Banks were driven to develop secure messaging capabilities for plastic cards because mag strips could be cloned and therefore financial accounts could be compromised. The first major innovation in this area was the smartcard, or what is known as ‘chip and pin’. Since financial institutions couldn’t wait until the technology was contactless, chip and pin systems became quite prevalent before NFC took hold. Governed by the ISO 7816 standard, chip and pin cards rely on power provided by the reader terminal’s contacts, making public encryption algorithms possible.

Over time, technology has progressed and the power required to perform cryptographic operations was reduced to the point where chips harvesting power from the radiative near field could complete them. NFC was born, another type of RFID designed to address security. By focusing on proximity tags that would be held close enough to the reader to draw sufficient power for sophisticated computations, designers could use authentication protocols that followed Kerckhoff’s principle of open architecture. Combined with the general trend of lower power, smaller size and reduced cost of electronics, the focus on proximity cards put NFC on track to be the only technology that could power secure contactless transactions. By limiting the communication range to 10 cm, there is additional security since attackers must be within this distance to mount an attack.

As a solutions provider and integrator, my experience with NFC began after the trail was blazed by countless engineers, developers and contributors that reared the technology to maturity. Now with NFC ubiquity just over the horizon, countless applications of contactless technology will become viable. NFC has succeeded in addressing the security and privacy concerns common in RFID technology and consumers will soon trust it the same way they trust e-commerce sites to protect their credit card information. Contactless transactions will be used for situations we can’t yet foresee or believe. After all, it was once thought that people would not buy a book over the internet.