Near Field Communications: The Current Path and the Road Ahead - UL.com

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Near Field Communications: The Current Path and the Road Ahead - UL.com
Near Field Communications:
The Current Path and
the Road Ahead
Near Field Communications: The Current Path and the Road Ahead - UL.com
Near Field Communications

Near field communications (NFC) is a wireless communications technology protocol
that enables devices positioned in close proximity to one another to share information.
Because it is generally more secure than other wireless technologies, NFC has been
widely adopted as a protocol for financial and payment applications. However,
the future for NFC-enabled technologies extends beyond financial transactions to
encompass a host of additional uses, including wearable technologies, secured location
access, transportation applications and even improved healthcare delivery. As such,
devices incorporating NFC technologies are poised for explosive growth in the years
ahead.

This UL white paper provides an overview of NFC technology, its benefits and its
potential future uses. Beginning with a brief review of the technical foundations of
NFC, the paper identifies the current and anticipated uses for devices incorporating
NFC technology as well as the projected market growth of NFC-based applications. The
paper then reviews the requirements of standards applicable to NFC-equipped devices,
and concludes with some recommendations for manufacturers seeking to leverage NFC
technology in their products.

How Does NFC Technology Work?
NFC-enabled devices operate on the carrier frequency of 13.56 MHz, a segment of the
electromagnetic spectrum reserved worldwide for unlicensed use by industrial, scientific
and medical (ISM) electronic devices. Historically, ISM frequencies have been utilized
primarily by devices that generate powerful electromagnetic emissions, and that are
therefore typically immune to electromagnetic interference. However, more recently,
ISM spectrum has been allocated for use by low power communications technologies,
such as wireless local area networks and cordless phones.

NFC works through the process of electromagnetic induction. In electromagnetic
induction, a device emits a small electrical current to create a magnetic field that
bridges the physical gap with another device in close proximity and enables the
transmission of data. At the other end, the receiving device converts the magnetic
transmission back into electrical impulses so that the data can be decoded and verified.

Unlike other wireless communications protocols that rely on radio transmissions instead
of electromagnetic fields, NFC is intended for use between devices that are within
close proximity to each other. The maximum operating range for NFC-enabled devices
is less than 20 centimeters (less than eight inches), although the optimum operating
distance is typically about 4 centimeters (about one and a half inches). This compares
with Bluetooth-enabled devices, designed to communicate at distances of 10 meters or
more, and Wi-Fi-based communications devices that can operate at distances of more
than 100 meters.

The limitations in their effective operating range help to make NFC-enabled devices
inherently more secure than those utilizing other communications protocols. Further
NFC devices transmit data at relatively low rates, generally from 106 to 424 kilobits per

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Near Field Communications: The Current Path and the Road Ahead - UL.com
Near Field Communications

second, and use less than 15 milliamps
of power. These lower data transmission
rates can result in reduced energy
requirements to assure accurate and
complete communications.

NFC-enabled devices are typically
designed to operate in one or more of the
following three modes:

• Card emulation mode—In card
  emulation mode, an NFC device acts
  much like a smart card, and can be used
  to store data, to conduct transactions
  such as contactless payments or to
  gain access to secured areas like hotel
  rooms.

• Reader/writer mode—In this mode, an
  NFC-enabled device can detect and           Current and Anticipated Uses                 and location devices. NFC technology
  read information stored on external,                                                     is even being explored as a possible
                                              for NFC
  NFC-compatible tags, such as those                                                       mechanism for wirelessly charging
                                              As a communications protocol, NFC
  embedded in labels or on smart                                                           wearable devices and apparel.
                                              is particularly well-suited for use in a
  posters.
                                              number of diverse applications where       • Access control—NFC-enabled devices
• Peer-to-peer mode—In peer-to-peer           close proximity between NFC-enabled          are already being used to provide users
  mode, an NFC device can communicate         devices is predictable. Current and          with access to secure areas, such as
  with other NFC-enabled devices in close     anticipated uses of NFC technology today     office buildings and parking garages.
  proximity to quickly exchange data          include applications in the following        For example, some institutions have
  as well as confidential and/or private      areas:                                       implemented NFC-based identification
  information.                                                                             systems that provide students with
                                              • Payment transactions—Perhaps the
                                                                                           building access and even allow
Some advanced NFC devices, such as              most widespread current use of NFC
                                                                                           them to pay for meals, all with a
the current generation of smartphones           can be found in contactless payment
                                                                                           single, NFC-enabled identification
and tablets, are capable of working             devices, such as key fobs, cards
                                                                                           card. More advanced NFC access
in all three modes. At the same time,           and readers. These devices enable
                                                                                           control applications allow users to
dedicated NFC tags and sensors typically        consumers to quickly and securely
                                                                                           lock or unlock computers and other
operate exclusively in read-only mode.          process payments for purchases,
                                                                                           electronic devices containing private or
This flexibility provides manufacturers         enhancing self-service options and
                                                                                           confidential information.
with the freedom to design NFC-enabled          reducing staffing needs.
devices in accordance with the specific                                                  • On-demand information retrieval—
                                              • Wearables—NFC is a primary
requirements of unique applications,                                                       When installed in retail settings,
                                                communications protocol used in
fostering the development of new                                                           NFC technology can help consumers
                                                wearable technologies, including smart
NFC-based products and supporting the                                                      instantly retrieve product information
                                                watches and wrist bands, shirts, caps
deployment of the Internet of Things (IoT).                                                and specifications from point-of-sale
                                                and other apparel items, and tracking

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Near Field Communications: The Current Path and the Road Ahead - UL.com
Near Field Communications

  displays without assistance from sales         applications, NFC-enabled diagnostic          to “do not disturb” mode and queue up
  personnel. For retailers, NFC tags issued      tags can monitor a patient’s vital signs      a favorite music playlist.
  to frequent customers can be used to           such as body temperature or blood
                                                                                             • In the car—Similarly, an NFC tag can
  collect shopping data and to incentivize       glucose levels, with information directly
                                                                                               be programmed to activate Bluetooth
  specific purchasing behaviors. On the          accessible by health care professionals.
                                                                                               connections with an automobile’s
  street, NFC-enabled posters can provide        NFC tags can also be affixed to patients’
                                                                                               sound system and to play podcasts or
  directions to places of interest, or           charts to provide direct access to their
                                                                                               audio books.
  detailed information about real estate         medical records for more efficient
  listings.                                      retrieval by physicians. These and other    • In the office—An NFC tag positioned at
                                                 applications can help to increase the         a workstation can automatically mute
• Workplace collaboration—NFC short
                                                 efficiency of care and reduce mistakes.       a smartphone or place it in vibrate only
  range communications are ideal for
                                                                                               mode. The tag can also be programmed
  exchanging content between devices
                                               Beyond these applications, using                to launch specific work-related
  in close proximity. In meetings, for
                                               NFC-enabled tags can considerably               applications.
  example, participants can quickly share
                                               expand the usefulness of NFC
  and review important documents                                                             • In your wallet—Instead of carrying
                                               technologies. Some creative and practical
  without the need to print out paper                                                          paper business cards, an NFC tag can
                                               examples include:
  copies. This capability can help to foster                                                   be programmed to contain all relevant
  greater and more timely collaboration        • At home—An NFC tag positioned                 contact information and instantly
  between employees, increasing the              near the main entrance can change             scanned by others. Physical business
  speed of decision-making and other             smartphone settings for home use,             cards with embedded NFC chips can
  action steps.                                  such as disconnecting Bluetooth               help recipients locate your website, or
                                                 connections, enabling Wi-Fi, and              download information.
• Travel—Passports, other forms of
                                                 increasing the ringer volume.
  personal identification and plane                                                          • At nighttime—Finally, NFC-enabled
  tickets can be easily and conveniently       • At the gym—When attached to a sports          tags in the bedroom can easily switch a
  stored on NFC-enabled devices and              equipment bag, an NFC tag can be set          smart phone to “do not disturb” mode,
  presented as required. In fact, some           to automatically switch a smartphone          set a wake-up alarm, and dim the lights.1
  airlines are already experimenting with
  the use of electronic boarding passes
  sent to NFC-enabled smartphones for
  efficient scanning and processing. These
  applications can help speed passage
  through travel portals and customs, and
  facilitate reticketing when necessitated
  by itinerary changes in route.

• Healthcare—Perhaps the most
  promising applications for NFC
  technology are in the field of
  healthcare. NFC-enabled applications
  include sensors that make it easier for
  patients to check in for examinations or
  renew prescriptions. In more complex

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Near Field Communications

These are just some of the many               the technology becomes more widely            required to detect and select the
examples of how NFC technology                available through retailers, and more and     appropriate communication modes
is currently being applied to create          more consumers become comfortable             required to reduce the potential for
greater efficiencies, improve the flow of     using NFC-based payment options.              interference with other NFC-enabled
information and enhance people’s lives.       According to one projection, at least         devices, such as contactless card
No doubt, the future will see a continued     five percent of the nearly 650 million        readers. The current version of ISO/IEC
explosion in the development of               NFC-enabled smartphones will be used at       21481 was published in 2012, while
applications that leverage NFC protocols.     least once a month to make contactless        the current version of ECMA-352 was
                                              payments at retail outlets by the end of      published in 2013.
The Projected Market for NFC                  2015. This is a 10 fold increase over the
Technologies                                  percentage of NFC-enabled smartphones       These standards are based on the current

The promise of significant future growth      making contactless payments in              radio frequency identification (RFID)

in NFC-enabled technologies is borne          mid-2014. 6                                 standard, ISO/IEC 14443, Identification

out in market projections. Overall, the                                                   cards—Contactless integrated circuit
                                              These statistics provide strong evidence
market for NFC is expected to grow at a                                                   cards—Proximity cards, as well as
                                              of the major market opportunities that
compounded annual growth rate (CAGR)                                                      the technical requirements of Sony
                                              NFC technology is expected to provide
of more than 43 percent by 2019, from                                                     Corporation’s FeliCA RFID smart card
                                              in the near future to manufacturers and
just $1.07 billion (USD) in 2012 to more                                                  system. As a result, devices compliant
                                              application developers.
than $13.5 billion (USD) in 2019.2 This                                                   with ISO/IEC 18092 and ISO/IEC 21841
                                                                                          are backward compatible with RFID
projection parallels a separate estimate of   NFC Standards and
a more than 50 percent CAGR during the                                                    systems, potentially providing broader
                                              Specifications                              and more rapid acceptance in the
same period for NFC chips, the integrated
                                              Internationally-accepted standards for      marketplace.
circuitry incorporated into mobile devices
                                              NFC communications protocols and data
and point-of-sale terminals to support                                                    In addition to these internationally-
                                              exchange formats include the following:
NFC capabilities.3                                                                        accepted standards for NFC technologies,
                                              • ISO/IEC 18092/ECMA-340, Near Field        the NFC Forum has been in the forefront
The future expansion of the NFC
                                                Communication Interface and Protocol      of developing NFC technical specifications
market forecasted in these projections
                                                (NFCIP-1)—These identical standards       for more than a decade. Originally formed
is predicated in part on the continued
                                                define NFC communications modes,          in 2004 by Nokia, Sony and Philips
growth in the number and type of
                                                including modulation schemes, codings,    Semiconductors, the NFC Forum now
NFC-enabled devices. Annual global
                                                transfer speeds and frame format of       includes hundreds of member companies
shipments of smartphones equipped with
                                                the RF interface. The standards also      and organizations from around the world
NFC technology are expected to top 2.2
                                                defines initialization schemes, and       committed to expanding the deployment
billion by the year 2020, up from just 750
                                                a transport protocol that includes        of NFC technology by developing and
million projected shipments in 2015.4
                                                activation and data exchange methods.     promoting interoperability specifications
And NFC-equipped smartphones will
                                                The current versions of these standards   for most NFC devices and applications.
constitute 64 percent of all smartphones
                                                were published in 2013.
shipped by 2018, up from just 18 percent                                                  At present, there are 20 adopted
penetration in 2013.5                         • ISO/IEC 21481/ECMA-352, Near Field        specifications that have been developed
                                                Communication Interface and Protocol-2    by the NFC Forum, as well as an additional
Contactless payments using NFC
                                                (NFCIP-2)—These identical standards       four candidate specifications awaiting
technology will also continue to be
                                                specify the technical mechanism           final adoption by Forum membership.
a major driver in market growth, as

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Near Field Communications

These specifications include protocol          this way, certification fosters the broader     and certification under the Forum’s
technical specifications, data exchange        adoption of the technology and further          certification program. However, the goals
specifications, tag type technical             supports the goal of universal interoper-       of the NFC Forum’s certification program
specifications, record type technical          ability.                                        are complemented by regularly scheduled
specifications and reference application                                                       NFC Forum-sponsored “Plugfest” events,
                                               Products seeking NFC Forum certification
technical specifications. Specifications                                                       which are open to both members and
                                               are evaluated by Forum-authorized
and requirements applicable to specific                                                        non-members of the Forum. At Plugfest
                                               testing laboratories located around the
devices are set forth in the current version                                                   events, product developers can evaluate
                                               world for compliance with NFC Forum
of the NFC Forum’s Device Requirements                                                         and verify the interoperability of their
                                               specifications, including radio frequency
document (v1.3, effective January 2014).                                                       product with other NFC-enabled products
                                               and protocol interoperability. Companies
                                                                                               and technologies, in a safe testing
The NFC Forum also maintains active            whose products are found to meet
                                                                                               environment that simulates real-world
relationships with other groups                specification requirements as a result
                                                                                               conditions.
and consortiums involved in the                of this evaluation and testing are then
development of standards and technical         authorized to display the NFC Forum
                                                                                               Summary and Conclusion
specifications for wireless technologies       Certification Mark on product packaging,
                                                                                               The market for NFC technologies will
and their application. These groups            as well as on sales and promotional
                                                                                               grow dramatically in the coming years,
currently include the Wi-Fi Alliance,          materials. NFC Forum-certified products
                                                                                               driven by the broader use of NFC in more
the Bluetooth Special Interest Group           are also eligible to apply the Forum’s
                                                                                               diverse applications, an increase in the
(SIG). The NFC Forum also works closely        N-Mark to their product to indicate
                                                                                               overall number of NFC-enabled devices,
with consortiums focused on industry-          the contact point on the product that
                                                                                               and greater acceptance by consumers.
specific applications of NFC, such as          will trigger a connection with other
                                                                                               At the same time, demonstrable in-
the EMVCo (credit cards and credit card        NFC-enabled devices.
                                                                                               teroperability with existing NFC
terminals), the Consumer Electronics for
                                               NFC Forum certifications are granted for        technologies will be critically important
Automotive (CE4A) Consortium and the
                                               the life of the product, and subsequent         for companies seeking to take advantage
Japan Automotive Software Platform
                                               recertification is necessary only when a        of market opportunities in this area.
and Architecture (JASPAR) Consortium.
                                               change in the product’s design affects          Therefore, thorough pre-market testing
These alliances allow the NFC Forum to
                                               its radiofrequency interoperability. In         is highly recommended as a method for
closely coordinate its own specification
                                               addition, specific NFC protocols for digital,   determining compliance with applicable
development efforts with those
                                               LLCP and SNEP that have been used               standards and specifications. NFC Forum
addressing complementary technologies.
                                               within a previously certified product can       certification can also provide prospective
                                               also be “inherited” for use in a second         customers with documented evidence
NFC Forum Certification
                                               product without the need for additional         of interoperability with other NFC
In addition to developing technical
                                               testing (analog test results from a             technologies, and may be a prerequisite
specifications for NFC technologies,
                                               previously certified product cannot be          for meeting NFC technology partner
the NFC Forum sponsors a voluntary
                                               inherited).                                     requirements.
certification program for NFC-enabled
devices and applications. The purpose of       A list of all NFC Forum-certified products      Through its active participation in the
the certification program is to provide        are maintained in a publically-accessible       NFC Forum, UL is committed to the
manufacturers and developers with a            directory available at the NFC Forum            continued development and widespread
mechanism for formally demonstrating           website (www.nfc-forum.org).                    deployment of NFC technologies in
their product’s compliance with NFC                                                            support of the Internet of Things (IoT)
                                               Only companies who are members of
Forum specifications and requirements. In                                                      ecosystem. UL senior technical experts
                                               the NFC Forum are eligible for testing

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Near Field Communications

serve in key leadership positions in                24 August 2015. http://trendblog.            [6] “Contactless mobile payments
NFC Forum technical working groups,                 net/creative-and-useful-ways-to-use-               (finally) gain momentum: TMT
marketing working groups and Tiger                  nfc-tags-with-your-smartphone/.                    Predictions 2015,” Deloitte Touche
Teams, including the NFC PlugFest                                                                      Tohmatsu Limited, no date. Web. 24
                                              [2] “Near Field Communication (NFC)
working group and the Minimum Level                                                                    August 2015. http://www2.deloitte.
                                                    Market—Global Industry Analysis,
of Interoperability working group, as well                                                             com/no/no/pages/technology-
                                                    Size, Share, Growth, Trends and
as the Healthcare Use Case Committee                                                                   media-and-telecommunications/
                                                    Forecast 2013-2019,” Transparency
and the Automotive Committee. UL is                                                                    articles/tmt-pred-contactless-mobile-
                                                    Market Research, 24 July 2014.
also involved in the Forum’s Certification                                                             payments.html.
                                                    Web. 24 August 2015. http://www.
Committee, specifically in the areas of NFC
                                                    transparencymarketresearch.com/
Functionality and Bluetooth Connectivity
                                                    near-field-communication-market.
Testing.
                                                    html.
UL is also one of just two NFC Forum-
authorized testing laboratories in North
                                              [3] “Global NFC Chip Market 2015-2019,”                For more information
                                                    Technavio, 2 September 2015. Web.
America, authorized to test and certify                                                              about UL’s NFC and wireless
                                                    2 September 2015. http://www.
technologies for compliance with all NCF
                                                    technavio.com/report/nfc-chips-                  technologies testing and
protocols, including RF analog, digital,
                                                    market.                                          certification services, contact
LLCP and SNEP. UL can also conduct
NFC tag type testing, and provide             [4] “NFC-enabled Handset Shipments                     ConsumerTechInfo@ul.com
device manufacturers with engineering               to Reach Three-Quarters of a Billion             or +1-510-771-1000
evaluations and pre-testing for products            in 2015,” HIS Technology, June 29,
under development. Finally, UL has                  2015. Web. 15 September 2015.
extensive experience with wireless and              https://technology.ihs.com/533599/
contactless technologies, and can conduct           nfc-enabled-handset-shipments-to-
compliance testing at locations through             reach-three-quarters-of-a-billion-
North America, the European Union and               in-2015,
Asia.                                         [5]   “NFC-Enabled Cellphone Shipments
                                                    to Soar Fourfold in Next Five Years,”
References                                          IHS Technology, 13 February 2014.
[1] For these and other uses for NFC                Web. 24 August 2015. http://press.
    tags, see “18 Creative & Useful                 ihs.com/press-release/design-
    Ways to Use NFC Tags with Your                  supply-chain/nfc-enabled-cellphone-
    Smartphone—2014 Update,”                        shipments-soar-fourfold-next-five-
    trendblog.net, 8 February 2014. Web.            years.

                                                                   ©2015 UL LLC. All rights reserved. This white paper not be copied or distributed
                                                                   without permission. It is provided for general information purposes only and is
                                                                              not intended to convey legal or other professional advice. 10/15 NG

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