History/Evolution of the Near Field Communications Technology

Near Field Communication is a form of the radio-frequency identification (RFID), which has been in use since the 1920s (Gratton, 2007). RFID is employed in reading information from such tools as transponders and tags, which can be attached on products or even on people (Gratton, 2007). Such tags and transponders are integrated circuits that bear small antenna that can be attached to various materials. Based on the information stored on such tags or transponders, the reader, using radio waves, can access information that, for instance, identifies the product or the individual to whom the tag is attached (Gratton, 2007).

NFC, which was developed in the 1980s, is a subset of RFID that limits the range of communication to within a 10 cm-radius (NCF Forum, 2012). It operates at a frequency of 13.56 MHz (Toegl & Hutter, 2011). In contrast to RFID, which does not have standardized protocols, NFC is developed based on specifications outlined by international standards bodies such as ISO (international Organization for Standardization) and ECMA (European Computer Manufacturers Association) (Toegl & Hutter, 2011). Accordingly, employs specific coding, data rates, protocols and data modulation concepts recognized across board.

Benefits that the Technology Provides or Promises for Business

Businesses stand to gain from NFC technology, for instance, by enhancing their understanding of consumer purchasing behavior. Gratton (2007) for instance argues that retail joints such as supermarkets can use NFC to understand consumer behavior more. By attaching such technology to loyalty cards that supermarkets give to their customers, the supermarkets could mine data about consumer purchasing behaviors by collecting data on products that customers purchase. However, use of NFC in such a manner could result into customer concerns about their privacy thus reducing the uptake of the technology (Gratton, 2007).

Another use of NFC is in monitoring product movement. In this respect, NFC can monitor products as they are moved from a warehouse to the retail points, thus averting theft along the way (Gratton, 2007). The use in such a manner involves integrating tags to products stored in a warehouse thus allowing capture of product details whenever they are moved from a warehouse through a checkout point that has a device that is NFC-enabled.

NFC has found other potential uses in payment solutions. One of these has been the evolution of mobile payments following the integration of NFC in mobile phones. Sonny’s Felica exemplifies the use of the technology to allow mobile phone users to shop and buy tickets using their phones instead of their credit cards. Felica is a wireless payment and ticketing system that allows customers to purchase products such as cinema tickets using their phones (Gratton, 2007). When customers arrive at the checkout point, they can make their payments by passing their phones across a wireless NFC-integrated reader, which retrieves their information and transmits it to online systems that allow for verification and authentication of customer payment details. Such convenience provided by NFC allows businesses more avenues to acquire new customers and provide better payment options to retain existing customers.

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