No-Contact Pay Is on the Rise Thanks to Near-Field Communication Technology

July 04, 2020 by Kayla Matthews

COVID-19 has many businesses trying to eliminate card and cash contamination.

As the COVID-19 pandemic continues, workplaces around the world are making purposeful changes to keep people healthy. As part of this effort, companies are increasingly gravitating toward contactless payments to minimize contact with potentially contaminated cards and card readers.

Contactless payments are made possible mainly through near-field communication (NFC) or radio frequency identification (RFID) payments. NFC technology is a subset of the RFID used in applications like grocery store scanners.

Whereas RFID information only flows in one direction—from the RFID tag to the device that reads it—NFC offers a two-way transfer of data with embedded chips, such as a smartphone and a payment reader.


A Closer Look at NFC Technology

An NFC chip acts as one part of a required wireless link. It activates when the chip comes close enough so that the receiving device recognizes the signal and completes the connection. An NFC-compatible device must operate at the 13.56 megahertz operating frequency. It also has a wire coil that acts as an antenna and a low-power microchip.

Most modern smartphones have NFC technology inside, but a user must activate it to make the chip work. The settings on the phone usually include an option to turn NFC tech on or off. In this case, the phone is the active device while a product (such as a payment reader) is the passive object—also called an NFC tag. 

The tag does not need a power source, and it only activates once an active device comes into range. Once that happens, electromagnetic induction creates a current in the tag. The active device generates a magnetic field via the wire loop accompanying the phone's chip. 


The basic structure of data transmission with NFC

The basic structure of data transmission with NFC. Image used courtesy of Rohde & Schwarz

Once the passive device gets close enough to the active device's magnetic field, the electrons in the passive device's wire coil start producing a current that matches the one in the transmitting smartphone. This process creates the power necessary for the passive machine, allowing it to sync with the phone and send or receive data. NFC-enabled devices do not require Wi-Fi to work, and there is no need to pair them. 

NFC payments also have a secure element chip protected by a digital signature either associated with the active device's chip or a cloud-based system. Many analysts assert that NFC is an extremely safe payment option. Even without that digital signature, a hacker must be close enough to the active device to turn on the technology and make the transmission happen.


NFC Tech in Action

RFID tech works at a distance of several feet, but NFC only functions within a few inches. Sometimes, this short-range poses a limitation. On the other hand, it boosts security by eliminating the chance of a person unintentionally authorizing a payment. 

The active device in an NFC transaction is not necessarily a phone. A recent development from NXP, the mWallet 2GO, put the technology into a watch strap. Wearers hold their wrist near the passive payment reader. The mWallet 2GO also offers data protection and encryption to protect people against a wide variety of potential attack types meant to compromise personal information. 


Montblanc's TWIN smart strap includes NXP's Wallet 2GO technology

Montblanc's TWIN smart strap includes NXP's Wallet 2GO technology. Image (modified) used courtesy of NXP

NXP also envisions a future where people use NFC technology in smart cities. They could use it to pay for parking or gain entry to buildings, for example. 

Promotional materials can serve as passive devices, too. For example, a movie poster may have an NFC-enabled sticker on it, allowing a person to aim their phone at it and get information. Another option is to use NFC to transfer data between two phones. There's even a shirt called the CashCuff that lets people pay while wearing the garment by holding their arm up to a passive reader. 


A Promising Technology

NFC-enabled payments happen substantially faster than buying something with cash or a card. Data transfer occurs much slower than some other transmission methods. Its maximum transfer rate of 0.424 megabits per second is less than a quarter of Bluetooth's maximum speed.

Even electrical engineers who don't primarily work on payment technology will likely find themselves becoming more familiar with NFC soon. The technology has vast potential and supports consumers' desire for frictionless data transfers.



Do you have experience with NFC? How do you think this technology may affect IoT device designs in the future? Share your thoughts in the comments below.