NFC (Near-Field Communications) is designed to operate over very short distancestypically less than 4 cm. Early uses of the technology in mobile phones and other mobile devices more or less mirrored RFID applications such a swiping (or, more appropriately, tapping) an NFC-enabled phone near a reader to gain quick access to a technical conference.
The technology always promised to have far more potential than a RFID tag, for course, and now NFC is being positioned by mobile network operators (MNOs), financial institutions, and mobile phone designers and manufacturers as a key enabler of over-the-air financial transactions.
Unlike most wireless technologies, NFC provides end users with a quick, intuitive, and easy way to access services. It does not, for example, use a complex and sometimes unsuccessful handshaking protocol like Bluetooth's. Encryption and other security methods have been built into the NFC standard.
Although its protocols are different, it can still be viewed as a smarter, more secure variant of RFID or smart card from a simplistic implementation perspective. The major difference in the new application known as Mobile NFC is the over-the-air (OTA) link to retailers and financial institutions.
Adding that functionality and the secure communication required for purchases, however, makes Mobile NFC not simply another technology or application but a ecosystem.
NFC has also been identified as a key sector for payment solutions by Amex, Mastercard and VISA. Demonstration deployments are already underway in Europe and similar contactless technology deployments are already widely used in public transport systems around the world.
Mobile NFC is defined as the combination of contactless services with mobile telephony. A mobile phone with an integrated, a hardware-based secure identity tokenthe most likely candidate is the UICC or Universal Integrated Circuit Card provides the ideal platform for NFC applications.
The market research firm Strategy Analytics has forecast that mobile phone based contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011, According to a white paper published in February 2007 by the GSM Association.
To date, about 14 mobile network operators, who together represent 40% of the global mobile market back NFC and are working together to develop NFC applications. They include Bouygues Tlcom, China Mobile, Cingular Wireless, KPN, Mobilkom Austria, Orange, SFR, SK Telecom, Telefonica Mviles Espaa, Telenor, TeliaSonera, Telecom Italia Mobile (TIM), Vodafone and 3.
NFC was approved as an ISO/IEC standard on December 2003. In March 2004, Nokia, Sony and NXP formed NFC Forum to advance NFC development. A patent licensing program for NFC is currently under development by Via Licensing Corporation, an independent subsidiary of Dolby Laboratories.
NFC operates within the globally available and unregulated RF band of 13.56 MHz and has three data transfer rates: 106 kbit/s, 212 kbit/s and 424 kbit/s.
The technology has two communication modes: Active and passive.
In passive mode, the initiator device provides a carrier field and the target device answers by modulating existing field. In this mode, the target draws operating power from the initiator's electromagnetic field.
In active mode, both the initiator device and the target device communicate by generating their own field. In this mode, both devices typically need a power supply.
The passive element's receiver is only required to acknowledge its presence when polled, confirm availability to enter communication, and acknowledge receipt of data. NFC's active mode on the other hand, requires both nodes to be engaged and negotiate the exchange.
While most applications require that both NFC nodes be active, the "active/passive" mode will be useful for communicating with un-powered devices, like contactless cards.
An NFC transaction always follows a straightforward sequence of Discovery, Authentication, Negotiation, Transfer, and Acknowledgment. NFC's link layer includes a secure authentication procedure and anti-collision mechanisms that preclude a third party from hacking the link. Figure 1 illustrates a typical NFC interaction.
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Figure 1: Typical NFC communication system.