How Near Field Communication Works

The Power of NFC

While NFC technology can do many things, the task most people think of tends to be making payments with a smartphone. It's a clear, easy to understand scenario. You've finished shopping and you walk up to pay for your purchases. You whip out your smartphone, hold it up to a receiver at the register, type in a quick PIN to identify yourself and the purchase charges to your electronic credit card.

There are already applications that make this method of payment compelling. In 2011, Google announced Google Wallet and Google Offers, a pair of products that take advantage of NFC technology. The basic function of Google Wallet is what we just talked about -- replacing your physical credit card. But it can also store other information like customer loyalty cards and special offers.

Here's an example. There's a particular coffee shop I go to frequently. To encourage customer loyalty, the shop has a policy that for every 10 cups of coffee I buy, I get a free cup. But that means I have to carry a card with me so that the barista can punch it every time I buy some coffee. If the coffee shop starts to accept Google Wallet -- and if I have a phone with NFC capability and the Google Wallet app -- my technology can keep track of everything for me. I just have to use my phone to make the purchase and it will register how many cups I've bought since my last free one. When it's time for a free cup, the phone will send that information to the store and I won't be charged.

But feeding my caffeine addiction isn't the only thing NFC can do. At CES 2012, Yale Lock demonstrated another use for NFC. The company had built special electronic locks that use NFC to lock or unlock doors. Holding your phone up to a pad on the door sends a signal from the phone to the lock. The lock disengages and you can get inside. Great, now we've eliminated the need to carry credit cards, loyalty cards and house keys!

Another potential use is in marketing. It's possible to incorporate an NFC tag inside a poster, for example. So if you see an ad for something that interests you, you can hold up your smartphone with an NFC chip up to it and receive more information. The main disadvantage to this type of marketing is that you'll have to be very close to the poster to receive the signal.

Other potential uses could include using NFC to communicate health records or synchronize data between devices. In the future, a profile on your smartphone might let you pass through airport security seamlessly as you navigate NFC stations. Only the limitations of the technology itself will determine what we can or can't do with it.