What Are NFC Tags? A Beginner's Guide

The popularity of integrated smart devices has skyrocketed in the last five years. As we get used to connected living, technologies like Near Field Communication (NFC) are streamlining our daily routine.

nfc enabled devices and a person
A Beginner's Guide to NFC Tags

What Are NFC Tags?

Near Field Communication or NFC technology allows two NFC-enabled devices to communicate wirelessly. NFC facilitates data transfer between nearby mobile phones, laptops, tablets, and other electronics.

NFC is part RFID (radio-frequency identification) and part Bluetooth. Unlike RFID, NFC tags work in close proximity. NFC also doesn’t require manual discovery/sync as Bluetooth does.

NFC tags are embedded as a smart chip in a physical device. Source: CXJ RFID Factory

Mobile wallets like Apple Pay, Samsung Pay, Android Pay, and contactless debit/credit cards are all powered by NFC technology.

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How NFC Tags Became Popular?

NFC has been on the technology scene for years — Nokia launched the first NFC-enabled phone in 2006. But this technology only gained momentum in the last three years.

Growth of NFC as a technology — 2018-2024. Source: BlueBite

Its popularity soared when companies realized that NFC was best suited for a “contactless” future. Topped with the pandemic that mandated social distancing, usage of NFC payments increased.

Contactless payments registered a 150% increase between March 2019 and June 2020 in the US alone. Contactless tech, originally designed to handle small purchases, is now one of the most popular mobile payment methods.

Today, there are more than 2 billion NFC-enabled devices and 20% of the world’s population has access to NFC.

But what is an NFC tag? How does NFC work? What are the advantages of using NFC? Are NFC payments secure? How are businesses using NFC technology?

Let’s look at all these questions and explore some common applications for NFC tech.

How Do NFC Tags Work?

NFC tags work like any other RFID tag to communicate over radio waves. Two devices — the NFC tag and the NFC reader exchange information in NFC data exchange format.

An NFC tag sends radio waves to activate the antenna in a reader. The reader validates the information to complete information exchange.

The technology works over a very short distance — approximately 4 inches. NFC tags can work without an inbuilt battery and draw power from another device like a mobile phone.

For example, in NFC payments, encrypted data exchange happens between NFC chips to finalize the payment.

An NFC reader connects with only one NFC tag at a time, minimizing accidental transactions. Card details can be stored on NFC-enabled phones. Users can pay without carrying multiple cards in their wallets.

Business Benefits of Using NFC

Instant connection

NFC devices connect instantly for data exchange when brought closer. Because of that, NFC can be used beyond payments for identification, access control, ticketing, or any other application requiring near-field data exchange.

Also, users get instant confirmation with NFC. There is no lag, processing time, or waiting period.

Wireless exchange

All modern smartphones are NFC-enabled to connect wirelessly without any wires or external power source. Your customers or team members don’t need any extra device, wire, or a special card for access or data transfer. For example, your team members can access floors and meeting rooms directly using their smartphones without an RFID-enabled identity card.

Secure, standardized, and regulated technology

NFC data exchange occurs only between devices in close proximity. The instant and nearby connection leave no chance of remote jacking by a hacker.  

NFC connections are regulated by standard protocols like ISO/IEC 14443 A, ISO/IEC 14443 B, and JIS X6319-4. ECMA International, ETSI, and other authorities make sure that NFC is universally secure and accessible across device vendors. 

No need for network connectivity 

NFC tags can work without WiFi, 3G, or LTE connectivity. This means users can pay, transfer data, access areas, and use NFC-enabled services even while they’re disconnected from the internet. 

For example, retail outlets and small businesses use NFC-enabled POS systems to process payments and hotels use NFC in their keycards even in locations with a weak WiFi signal. Common users can use all the services without having to worry about mobile data or signal unavailability. 

Convenient and affordable technology 

Using NFC tags for digital transformation  — contactless payments, access control, or identification is easy and affordable for any business. You can buy NFC tags online and create dedicated NFC apps to digitize your business.

For example, you can use NFC for easy and contactless access to your gym or health center. Users can download a mobile app, pay online, and scan their digital token (on their smartphone) to access the facilities. In the post-COVID world, this can be a game-changer for any customer-facing business. 

Reduced carbon footprint

NFC is an eco-friendly solution that can minimize the carbon footprint of any business. Recyclable NFC tags made using paper are reducing the use of plastic for access tokens/cards.

Businesses like hotels or banks can minimize the usage and waste of plastic cards, tickets, or tokens for access control.

How Businesses Are Using NFC Tags?

NFC offers many opportunities for companies that want to digitize experiences or facilitate access. Businesses all over the globe are using NFC for several use cases and applications. 

NFC solves several pain points for businesses across multiple industries. Source: TechSpot

Contactless payments

Contactless payments are the most prominent use case of NFC technology. NFC makes transactions easy, secure, and fast  — something both consumers and businesses want.

NFC-enabled devices have fueled the contactless payment revolution, especially post-COVID.

Consumers don’t need anything extra (PIN or signatures) for small transactions. Plus, as NFC is a more secure way to pay  — transactions happen instantly and users are not required to share real card information every single time.

Take the example of Google Pay. The app allows users to make contactless payments to millions of merchants globally via their smartphones.

Google pay is an all-in-one NFC-enabled payments app. Source: NFCW.EXPO

Ticketing

A smartphone can be used as a ticket for concerts, movie shows, or even transit tickets using NFC technology. Many businesses, operators, and even public transportation services have added NFC technology to their ticketing operations.

In Washington, WMATA  — the government agency that controls public transport announced an upgrade to SmarTrip. The NFC-based solution will allow commuters to directly walk up to the metro gates and use public transport via an iPhone or Apple Watch.

NFC-enabled devices will work as an access token and people can get on the bus or metro without needing to load their SmarTrip cards with money. Payments will automatically be made using Apple Pay or Google Pay.

NFC-enabled iPhone and Apple Watch for public transport in Washington. Source: WMATA

Identification and access control

NFC can be used to identify team members and people who access select areas or floors.

People can use their smartphones for identification and access control. No need to carry an additional card to open doors at the office. Just use a mobile phone to access different areas.

FAQs 

How close do you have to be for NFC to work?

NFC works effectively within a 4-inch radius. Devices must be within this range for NFC to work. The proximity makes NFC safer and more secure than other similar technologies for applications such as contactless payments.  

Which is better: RFID or NFC?

NFC is an evolution from the RFID technology and both have distinct use cases. NFC offers a two-way communication channel while RFID offers one-way communication. NFC devices can act as readers and tags while RFID needs readers and tags separately. NFC and RFID can’t be directly compared because both have different applications. While NFC is widely popular for contactless payments, RFID is more suitable for asset tracking.

How can I increase the NFC range?

NFC is meant for communication with nearby devices. You cannot increase the range of NFC tags. There are other technologies for higher range but NFC cannot work over a long distance as it was designed for near field communication only. 

Are NFC payments secure?

Yes. NFC payments are more secure than paying via other mediums. Tokenization and encryption protect you from unauthorized payments and access. The contactless nature, inherent NFC functionality in mobile phones, and the close-range make NFC payments quite secure and reliable. 

What are the benefits of NFC payments?

NFC payments are easy and quick. You don’t need to carry a card or wallet to buy anything — you can use an NFC-enabled smartwatch, for example. Plus, NFC works with existing infrastructure. They’re more secure than card payments as transactions happen in an instant with an NFC-enabled device like a smartphone. 



NFC has been a practically dormant and slow-moving technology for the last ten years. But with rising interest in contactless tech, the NFC has been brought back closer to the spotlight. NFC is a secure contactless solution that is a good fit for various use cases and NFC apps.

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