NFC Lets You Leave Your Cash And Credit Cards At Home

Soon, smart phones will include near-field communications (NFC) wireless technology so they can be used like keys or credit cards. Users simply wave their phone near an NFC reader, or tap it, and the devices exchange data to make a transaction. Automatic paring is another emerging application.

The Radio Technology

NFC’s maximum range is about 20 cm with a typical useful range of 4 to 5 cm, which benefits security. It uses the near field rather than the more familiar far field (see “What’s The Difference Between The EM Near Field And The Far Field?”).

The far field comprises the orthogonal electric and magnetic fields that extend out from the antenna beyond several wavelengths. The waves behave as Maxwell’s equations predict where the electric and magnetic fields exchange energy and rejuvenate one another along the signal path. The field strength decreases with distance (d) by a factor of 1/d2.

The near field is within one wavelength or less of the antenna. It also consists of an electric and magnetic field, although the magnetic field is more dominant. The signal strength drops off by a factor of 1/d6, making it far less useful.

Essentially, the near field is the magnetic field produced by the transmit antenna. It can be considered the primary of an air-core transformer, and the receive antenna can be seen as the secondary winding of that transformer. The attenuation makes the overall effective wireless range very short.

NFC operates on the unlicensed 13.56-MHz frequency. It is authorized in Parts 15 and 18 of CFR 47 from the Federal Communications Commission (FCC). Most other countries have authorized it as well. The modulation is amplitude shift keying (ASK) with either 10% or 100% modulation. The transmitted binary data uses either the Manchester code or a modified Miller code to ensure transmission reliability.

Data rates are 106, 212, or 424 kbits/s depending on the coding and modulation percentage. Some NFC devices use standard NRZ-L encoding. Binary phase shift keying (BPSK) modulation is an alternative at the 106-kbit/s data rate. Typical signal bandwidth is ±7 kHz or up to ±1.8 MHz depending on the data encoding and speed.

A data rate of 848 kbits/s is also available in some devices, but it is not part of the approved standards. A faster very high bit rate (VHBR) modification to the standard is under consideration and will boost the rate to 6.8 Mbits/s for some applications.

NFC Modes, Devices, And Protocols

There are two basic operating modes for NFC: active and passive (Fig. 1). In the active mode, a battery or power supply fully powers both communicating devices. In the passive mode, one of the communicating devices is fully powered while the other is fully passive. The passive device, called a tag, derives its dc operating power from the receive RF signal transmitted by the active device.

1. NFC uses both active and passive devices. For example, a reader/initiator would poll a smart phone/target, both in active mode (a). Or, a smart phone would be the initiator polling a tag/sticker/target (b).

Radio frequency identification (RFID) tags work the same way. The passive device powers up and transmits data back to the active device using load modulation, a form of ASK with a low modulation percentage. Load modulation has the data modulate an 848-kHz subcarrier that in turn modulates the main 13.56-MHz carrier. As a result, the signal varies the impedance of the listening device, which translates to a form of ASK.

Both the active and passive devices use Manchester coded 10% modulated ASK for both 212- and 424-kbit/s operation. Active devices use the Miller code and 100% modulated ASK for a 106-kbit/s rate to ensure an initial connection. Figure 2 shows the standard NRZ-L code and the NFC coding options.

2. Binary waveforms used in NFC include the standard NRZ-L format (a), an ac Manchester coded wave (b), a dc Manchester code (c), and a modified Miller code (d). The Manchester and Miller codes provide more reliable reading and provide easy clock recovery.

The basic communications mode is half duplex, where one device transmits at a time while the other receives. The operation is “listen” before “talk.” One of the devices is an initiator that must listen on the channel and transmits only if no other signal is present. The initiator “polls” the other devices that may come near it. The other device, the target, listens and responds to the initiator according to a formal protocol.

Other modes of operation are read/write, peer to peer, and card emulation. Read/write operations are used to transmit data from one device to another with both active and passive devices. The initiator either reads or writes to a passive device. In the peer-to-peer mode, two active devices exchange data to establish a link for other transmissions. The card emulation mode works like an active device reading a passive device such as a smart credit card or tag.

The multiple NFC standards, designated NFC-A, NFC-B, and NFC-F, define several slightly different transmission technologies. Each specifies a different data rate, modulation, coding, or operational mode (see the table). The initiator polling device attempts to detect the specific mode of the responding device and then configures itself to the appropriate technology to complete the transaction.

Also, the NFC standards define four basic types of passive tags from Type 1 to Type 4. Each type has a different memory capacity and matches one of the popular standards. Types 1 and 2 have 96- and 48- byte to 2-kbyte maximum storage and operate at 106 kbits/s. Types 3 and 4 run at 212 or 424 kbits/s and have either 1 Mbyte or 32 kbytes maximum, respectively.

The NFC standards further specify a message encapsulation format called the NFC Data Exchange Format (NDEF) to use in the normal course of operation. Each transmission is called a message, and each message comprises one or more records (Fig. 3). A record includes the desired payload plus a defining header, which has identifier, length, and payload type fields. The payload is typically a URL or a data type defined by the standard NFC Record Type Definition (RTD) file.

3. Also called a message, the NFC Data Exchange Format (NDEF) comprises one or more records. A record includes the desired payload plus a header comprising identifier, length, and payload fields.

NFC Standards

Most of the basic NFC standards were derived from RFID and smart card standards. They have become formal International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) standards, including those standards originally developed by participating companies:

  • ISO/IEC 14443A (NXP, formerly Philips MIFARE)
  • ISO/IEC 14443B (Infineon)
  • JIS X6319-4 (Sony FeliCA)

The RF NFC standard is ECMA 340 (European Association for Standardizing Information and Communications Systems). It is designated NFCIP-1 or Near Field Communication Interface and Protocol. ISO/IEC adopted this standard as 18092. There is also NFCIP-2, called ECMA 352, and ISO/IEC 23917.

The NFC Forum (, a non-profit promotional group of companies, establishes and maintains a wide range of related specifications and standards related to NFC. It also provides testing and certification programs to promote interoperability of NFC devices. EMVCo, a joint business venture of Europay, MasterCard, American Express, and Visa, manages and maintains specifications for smart cards, point of sale (POS) terminals, ATMs, and related devices.

NFC Security

If NFC is to be used in lieu of credit card payments or access to critical facilities, the transmitted data must be secure. NFC has inherent security simply because its very short range prevents signals from traveling too far. However, that doesn’t mean NFC systems can’t be hacked. A high-gain directional antenna and sensitive receiver could eavesdrop on NFC signals at considerable distance, although the hacking receiver setup may not be that inconspicuous.

Security risks also come from other forms of hacking. For example, data corruption could occur when false data is transmitted to an NFC reader or other enabled device. Data also can be modified during transmission. During “man in the middle” attacks, hackers access the transmitted data and change it before retransmitting it. These attacks aren’t likely, but they are possible. The best way to protect the data from these forms of corruption is to encrypt or otherwise use techniques to secure the radio channel. Virtually all NFC radios are encrypted.

“Although NFC standards are already well defined and developed, additional progress is needed in point-of-sale infrastructure integration to fully realize the technology’s potential,” says Ron Vetter, IEEE Computer Society member and founder of Mobile Education LLC. “Because mobile payments will likely be the big driver for NFC, addressing customer concerns with security and privacy will also play an important role in how rapidly the technology is adopted.”

NFC Applications

NFC has many potential uses. However, the primary target application is mobile payments. Instead of using a credit card, customers at stores and other venues will use their NFC-embedded smart phone as the payment device. Users will be able to pay at restaurants, retail stores, parking lots, theaters, sports stadiums, and specialty shops as well as on buses, trains, taxis, and perhaps even airlines worldwide with just a swipe of their phone.

Access is another potential use. People who are authorized to enter secure buildings, facilities, and areas will use their smart phone as an electronic key. NFC also could be used to access homes, car doors, and computers.

Simple data exchange is another possibility. The peer-to-peer mode would allow phones or other devices to exchange data. Business card information could be transferred between phones. Data also could be sent between laptops and printers. Data rates are too slow for video or digital camera data transfers, but the potential will be there as higher rates become available.

Pairing, which is the process of getting two wireless devices talking with each other, is one of the more promising uses. It’s usually necessary in establishing communication in Wi-Fi and Bluetooth systems. By incorporating NFC in these devices with pairing drivers, the connections would take place automatically without user interactions. Nothing is more aggravating that having to pair two radios before use. NFC is a real solution to this maddening problem.

Reading tags or smart stickers is another interesting application. Inexpensive read-only tags can be placed on almost any item so a smart phone can read it. The tags may provide a URL for additional information, or they may store text and graphics for advertising. Promotional posters can provide enhanced data from a tag. Maps could be accessed. Tags on products for sale could provide specifications, features, and price information.

The Mobile Payment Option

The industry seems focused on making NFC the key to “cardless” payments, but it will take more than the seamless wireless link. The credit card companies, banks, cellular carriers, and retailers will have to cooperatively assemble a massive system that will make these payments possible. That system is slowly beginning to emerge.

In fact, there are multiple efforts to build an e-commerce system that all can use. A single standard does not seem possible. The goal is to capture all of those millions and billions of transactions and dollars and get a piece of the action. The current mobile payment effort is all about making money and controlling that flow of funds. Collaboration among players results in new organizations and systems. It appears as though several will coexist in the e-payment realm.

The first major payment system was Google’s Wallet. This cooperative effort between Google, MasterCard, and Citigroup emerged over a year ago, but it hasn’t been widely used. There are more Google Android phones with NFC than any other type of phone, so some activity has occurred.

Another major effort, Isis, is a collaboration of the cellular carriers including AT&T, Verizon, and T-Mobile. Trials are expected to occur in Salt Lake City, Utah, and Austin, Texas, anytime now. The Merchant Customer Exchange amalgamates large retailers like Wal-Mart, Target, 7-Eleven, Best Buy, CVS, Lowe’s, Royal Dutch Shell, Sears, and Sunoco. Other major vendors like Apple, Amazon, and Microsoft have not announced e-payment options.

More than 140 separate e-payment initiatives are in play. Most won’t survive or will operate only in a narrow sphere of influence. The larger efforts will pay off eventually. In addition to garnering a part of the revenue, most of these ventures also want to gather customer data for market research and to further enrich themselves with targeted ads, coupons, and other sales efforts.

The smart card, an alternative to NFC payment, has been around for many years, and its use is continuing to grow. Smart cards have a built-in chip with a processor and read/write interface that interacts with readers at retail and restaurant sites. Contacts on the embedded chip let the reader connect to the card. The smart card is more secure than traditional magnetic strip credit cards.

The major standard for such smart cards is EVM, a joint venture of Europay, MasterCard, and Visa. The organization managing the EVM effort is called EVMCo. American Express, JCB International, MasterCard, and Visa jointly own EVMCo. Most popular credit cards use the EVM standard, which is based on existing ISO/IEC standards 7816 for contact cards and ISO/IEC 14443 for contactless RFID chips.

“Today there are numerous trials on NFC for mobile payment and other mobile commerce activities that are being held by mobile network operators as well as by players like Google, PayPal, and retailers like Starbucks. New players like Target, Wal-Mart, Best Buy, and CVS are also looking to launch NFC payment services,” says Jagdish Rebello, director of consumer and communications at IHS iSuppli.

“These trials are aiming to raise customer awareness for the technology, improve the user interface, and sort out the business model as various nodes in the value chain seek to profit from NFC and develop new offerings that take advantage of the technology. As these issues work themselves out, NFC is well poised to be a key enabling technology in the near future,” Rebello says.

Designing With NFC

Adding NFC to a smart phone, designing an NFC reader terminal, or specifying an NFC tag is a relatively simple process. The biggest challenge lies with the phone designs as the NFC represents one more radio that must added to an already impressive collection of wireless devices typically including several cellular radios, Wi-Fi, Bluetooth, GPS, and even FM in some cases.

Finding the space is the key problem as the low 13.56-MHz frequency requires larger components. The chips are tiny, but the antenna is a printed-circuit board (PCB) loop or an inductor on a ferrite core that must be tuned and matched to the chip. This requires the most space. The extra power consumption may also be a problem in some designs. The design boils down to selecting a chip and squeezing it and the antenna into available space. Large retail reader designs are easier since they offer the most space and can use improved antennas as well as ac supplies.

Multiple vendors offer chips. Most of the larger semiconductor manufacturers have some NFC component including RFID tags. The leader in this space is NXP (formerly Philips Semiconductor, one of the founders of NFC), with an estimated 80% market share.

One of the most widely used NFC devices is the NXP PN65K. This two-chip module includes the NFC transceiver and controller combined with a Secure Smart Card controller for security. The transceiver’s 8051 microcontroller complies with all NFC active and passive modes and standards. The two chips communicate over the S2C or NFC-WI (sired interface) bus.

The PN65K also includes SPI, I2C and UART interfaces. The read/write range can be up to 50 mm with a larger antenna and sufficient power. The Smart Card Controller uses a Public Key Infrastructure (PKI) co-processor and a dual triple DES encryption key coprocessor.

NXP’s PN544 is pin-compatible with the PN65N module but can work with other secure chips. It also supports the NFC-WI wired interface standard ECMA373 for connecting external chips. The NXP PN547, an improved version of the PN544, features a longer read/write range, a smaller footprint, and 50% less power consumption.

Broadcom’s BCM20791 and BCM20792 are made with 40-nm CMOS. These NFC controllers are among the smallest (4 by 4 mm) devices with extremely low power consumption. They’re designed to interface with SIM cards or non-SIM security chips to provide secure transmission. They’re also designed to pair with Broadcom’s BCM4330 Bluetooth, Wi-Fi, and FM combo chip for handsets.

Texas Instruments offers a line of ICs designed for NFC reader terminals. The TRF7970A is an NFC/RFID transceiver IC in a 5- by 5-mm, 32-pin quad flat no-lead (QFN) package. It complies with all NFC standards including NFCIP-1 (ISO/IEC 18092) and NFCIP-2 (IISO/IEC 21481), as well as IDO14443A/B and FeliCa. Designed to work with TI’s MSP430 microcontroller or an ARM MCU, it has programmable output power of 100 mW (20 dBm) and 200 mW (23 dBm). It offers SPI and parallel interfaces and a 128-byte FIFO as well.

The austriamicrosystems AS3911 NFC reader IC conforms to all NFC standards including the EMVCo payment system (Fig. 4). It features a capacitive sensor and requires only 5 µA to wake up in the presence of a tag. The chip also has fully automatic antenna tuning to optimize performance. Its 1-W output power eliminates the need for an external power amplifier. And, it supports the VHBR draft amendment to the 14443 standard, allowing a data rate to 6.8 Mbits/s.

4. The austriamicrosystems AS3911 features dedicated control logic implementing all the basic NFC standards for a reader. It uses an external 27.12-MHz crystal, has an SPI external interface, and complies with the faster 6.8-Mbit/s VHBR standard. Best of all, its 1-W transmitter eliminates the need for an external power amplifier.

Based on the Microsoft Windows Phone 7 platform, the Nokia Lumina 610 smart phone uses INSIDE Secure’s MicroRead v.3.4 NFC controller and Open NFC protocol stack software (Fig. 5). Also, INSIDE Secure’s SecuRead NFC platform recently went through the EMVCo Platform Security Evaluation Process and is now certified to work with 1.3 billion EMV-compliant cards and tags. It comprises the SLE-97 embedded Secure Element from Infineon, a GlobalPlatform-compliant Java card operation system coupled with the INSIDE MicroRead NFC controller and Open NFC protocol stack.

5. Based on the Microsoft Windows Phone 7 platform, the Nokia Lumina 610 smart phone uses INSIDE Secure’s MIcroRead v.3.4 NFC controller and Open NFC protocol stack software.

Meanwhile, INSIDE Secure’s MicroPass 4101-2K NFC tag complies with the NFC Forum’s Type 4 tag requirements with 2 kbytes of memory. This is enough to store long URLs, business cards, phone numbers, or Wi-Fi or Bluetooth pairing information and other application data that can be read by an NFC-enabled device.

Finally, Marvell’s 88W8897 combination chip for smart phones includes NFC in addition to its 802.11ac Wi-Fi as well as Wi-Fi Miracast and location engine (Fig. 6). Other vendors are adding NFC their combo chips too.

6. Marvell’s Avastar 88W8897 incorporates 802.11ac 2×2 MIMO and beamforming to produce upwards of 867-Mbit/s data streaming for video. It includes additional Wi-Fi features in addition to Bluetooth 4.0 and NFC radios.

Where Is NFC Headed?

The predictions for the use and growth of NFC e-payments are very positive. As the use of smart phones continues to grow and as the incorporation of NFC into these phones increases, the potential for e-payment grows. Today, just over 50% of the U.S. population has a smart phone, but most do not have the NFC component. Apple’s next iPhone is expected to include NFC, though.

According to Jagdish Rebello of IHS iSuppli, only 12% to 15% of current smart phones feature NFC. He indicated that there were 106.471 million devices with NFC in 2011 and 232.507 million projected for 2012. He estimates this will grow to 989.142 million by 2016. More phones with NFC will obviously boost the e-payment movement.

Market research firm Gartner estimates that the value of e-payments will grow from $172 billion in 2012 to $600 billion in 2016. Gartner also expects the number of global users to grow from just over 200 million this year to more than 400 million in 2016.

In its new market reports, Juniper Research projects total mobile payment transactions to hit $1.3 trillion by 2017, mostly thanks to physical goods sales. Yet even then, mobile sales of physical goods would still only account for 4% of all global retail transactions by 2017.

NFC tags and stickers may prove to be very popular. Made of plastic or paper, they include the NFC/RFID chip that will provide some useful text, graphic, ad, map, or URL. As more smart phones get NFC, the use of these stickers will grow. They are cheap enough to be used on a wide range of items or in strategic locations. The sticker movement may be as big if not bigger than the payment function.

There are several reasons why NFC payment rollout is so slow, though. First, there’s a small number of NFC-enabled smart phones. Eventually, though, most smart phones will include an NFC radio. Second, who will enable all those NFC smart phones? Which payment service will consumers select? The public still needs to be educated about NFC. Consumers then must select a service, and selection alone is confusing when so many options are available.

Furthermore, retailer point-of-sale terminals must be upgraded to include NFC readers. It’s an expensive conversion. Who’s going to pay for it?

Finally, NFC e-payment must offer some major benefit. Consumers won’t have to carry as many credit cards, and transactions won’t take as long (see “Credit Cards Aren’t Obsolete Yet”). But is that enough to convince the masses to switch to NFC payments? Many consumers don’t want to include their financial information on their phones, even though NFC is just as safe as their credit cards. In the end, traditional credit cards won’t disappear completely, but e-payments still will account for many transactions.

For More Information

With nearly 200 member companies, the NFC Forum is a non-profit organization devoted to promoting NFC, maintaining standards, and providing testing and certification for interoperability.

What’s Next in Payments, located at, is devoted to news about payment options including NFC.

Credit Cards Aren’t Obsolete Yet

Slowly, technologies using near-field communications (NFC) are rolling out on smart phones for mobile payments. But credit cards are still king for many consumer transactions. In fact, Square is giving credit cards a boost. Its unique accessory for smart phones and tablets allows almost anyone to accept credit cards for payment (see the figure).

The Square accessory plugs into the headphone or microphone jack on iPhones, iPads, and most Android smart phones and tablets, turning them into credit card readers with a wireless link to Square, which handles the transaction.

The Square dongle plugs into the accessory jack on most Apple iPhones and Android smart phones. It includes a credit card reader and the software to implement a cellular connection back to Square, which handles the transaction.

Anyone can sign up for Square. It works with Mastercard, Visa, American Express, and Discover. Square asks for a 2.75% fee per charge, which is lower than the usual 4% to 5% charged by other companies. Many major retailers like Starbucks now use Square, which not only should keep credit cards in competition with NFC, but also might increase their use.

PayPal’s similar PayPal Here also plugs into smart phones and tablet so users can swipe credit cards. PayPal collects 2.7% per transaction. Other payment options from various companies use SMS texting, QR codes and bar codes, and special apps of all sorts. NFC has lots of competition.