NFC - A gleam of the future wireless communication

After reading my last article on Paytm’s foray into the offline digital payment system, a friend evoked me saying, ‘like the Samsung pay or the Apple pay, how do you see the future of NFC enabled payment shaping-up in India. Moreover, will the future of NFC merely remain confined to the payment sector?’

Wikipedia defines Near-field communication or NFC as ‘a set of communication protocols that enable two electronic devices equipped with NFC chips, one of which is usually a portable device such as a smartphone, to establish communication by placing them within few centimeters of each other’. They are essentially of two types - Two-way communication & One-way communication.

In addition to voice and data connectivity services, the handheld devices are being used for a range of ancillary services. In the current plot, digitizing the payment (e.g. peer-to-peer money exchange) securely and completely will lead to an excellent, hustle free customer service. The NFC is one of the most promising technologies implemented in the mobile handsets, which is able to broaden the potential of mobile phones and enriching consumers’ experience at the same time. Additionally, application of NFC in mobile payments is highly attractive due to disparate services viz., mobile ticketing, client loyalty applications, smart advertisement applications, and physical and logical access and other functionalities. Now-a-days, NFC payment mode is widely used in the retail industry, has already been adopted in several European and Asian nations, and is being embraced swiftly in North America. Other than the payments, one-way NFC technology is finding usage in multiple arenas. For example, certain auto dealers are using NFC tags to provide digital content to their customers.

Of late, I have suggested couple of ideas around NFC technology (Tell me if you need) and had converted one in an MVPs (Minimum Viable Product). Questions were raised about the availability of NFC enabled devices. Like, with a mere 36% smartphone penetration among all the mobile users in India, NFC is a rarer technology.

Natheless, NFC will be the new Bluetooth in the days to come. Although, penetration of NFC technology is at a nascent stage now but the way it is picking up, no wonder it will be the basic ask in any mobile device in future. Currently, over 250 models (Android) from multiple brands have NFC feature available in them at a price as low as Rs 15000 (Internet). Recently, Reliance Jio has completely disrupted the hardware market by offering 4G mobilehandsets at Rs 1500. These dirt-cheap smartphones will have all the features like, Voice command and Indic language support, NFC, screen mirroring and many more.

You must also be thinking how it is different from Bluetooth. Well, it is all about power since NFC uses significantly less power. This is pivotal when we are living in an era where handheld devices are replacing physical wallets, hence making battery life a much more critical factor than ever. NFC also has a higher security level as compared to Bluetooth.

However, despite potential benefits brought in by NFC, and a high level of distribution of smart phones, the rate of penetration of the NFC based mobile payment remains slow. A number of demand and supply barriers could be attributed to this gloomy pattern. While network externalization and lack of consumer awareness act as the demand side barrier, lack of uniform technological standards could be deemed the supply side barriers. However, the protracted rate of NFC diffusion is an effect of the set of interrelated obstacles. Furthermore, the sources of these barriers are related to the consumer acceptance, the specifics of business environment and technology.

                                                                              Signing off:-Mr  R.K. Narnoli