Near Field Communications (NFC) Revisited

A few months back I shared some thoughts about Near Field Communications, a close-range technology that enables mobile devices to communicate directly with each other to exchange information, money, commands, and more. At the time of writing, mobile money was the clear beneficiary of this tech, allowing people to buy Cokes and transfer funds with the swipe of a phone. And NFC chips had yet to be included in any major (RIM, Apple, Nokia, and Android) mobile devices. Oh, how things have changed.

At last week’s Mobile World Congress, a high-profile showcase of mobile innovation in Barcelona, it became clear that NFC has evolved dramatically over the past three months. By all measures, it’s entered the mainstream. Some examples: all of Nokia’s phones released in 2011 will feature NFC compatibility, the next iPhone edition should feature the technology, a couple NFC apps are available on Android’s Market, and Google’s commercially-available Nexus S Android phone is NFC-friendly. Finally, NFC chip manufacturer NXP expects to ship 70 million phones equipped with the technology this year alone.

The biggest commitment yet to NFC technology came from GSMA, the mobile operators’ association which sponsored the Mobile World Congress. In a statement, the GSMA outlined a plan to launch global commercial NFC services by 2012, with the cooperation of dozens of mobile operators from around the world.

But what will these phones be doing with NFC? In this interview at last week's Mobile World Congress, BlackBerry manufacturer RIM’s VP Andrew Bocking emphasized the mobile payment possibilities of NFC. But when I wrote about NFC back in November, large-scale NFC mobile payment systems weren’t really out there.

That’s no longer the case. At the Mobile World Congress conference, electronic payments giant Verifone announced the launch of its PAYware NFC-enabled mobile transaction service in Canada, the U.K., and various Latin American and Asian markets throughout 2011. And last week, Business Week reported that Google and eBay might be building their own mobile payment services using NFC technology.

But if the Mobile World Congress taught us anything about near field communications, it’s that NFC isn’t limited to mobile money. Last week Jenna Wortham of the New York Times shared some ideas about NFC’s diverse applications:

NFC can also trigger an application to start. Say, for example, you waved your phone over a chip embedded in a wristwatch, or on a card next to a phone in your house that was programmed to call a particular contact. The NFC chip would prompt the phone to begin dialing that number automatically -- a feature that could be handy in a household with small children or older relatives.

As Wortham explains, NFC-enabled phones could also help unlock vehicles, exchange contact information, activate GPS and Pandora stations in your car, help retailers track inventory, and transfer coupons from a shop window to a consumer’s phone.

I don’t mean to harp too much about the wonderful world of NFC, but it’s hard not to get excited about a technology that’s so diverse, so scalable, and so rapidly entering the mainstream. Three months ago, NFC-enabled mobile payments were tangible but not widespread. Recent announcements by Verifone, Google, and eBay will change that landscape, quickly and dramatically.

Perhaps most impressively, the near field communications revolution won’t be leaving developing markets in Europe, Latin America, and Asia in the dust -- a concern I raised in my previous report about NFC. The GSMA’s statement includes a promise to focus on “global interoperability” to ensure standards and security measures are applied in all mobile markets, with major operators from India, China, and Latin America signed on (notably absent from the agreement, however, are any leading African telecoms).

In just three months, near field communications technology has entered the market and is already flexing its muscles in the world of mobile money. The Mobile World Congress showed that the NFC momentum will continue to grow beyond this application, and a few months from now I look forward to following up with the latest NFC features that will have entered the mainstream.