You may have heard of the acronyms RFID and NFC, but do you know what they stand for, how each technology is used, and the differences between the two? This infographic will provide more insight into both types of technology and how they affect the world of payments.
What is RFID?
Radio-frequency identification, or RFID, is a technology that uses radio waves to relay identifying information from an electronic tag placed on an object to an electronic reader.
RFID tags are used across a wide variety of industries, often to track inventory. In manufacturing, products such as automobile parts or garments can be tracked through the manufacturing process and through shipping to the customer using RFID tags. RFID tags can also be used to identify baggage and cargo at airlines. In retail, RFID tags are often attached to items as an anti-theft method - when leaving the store, customers must pass near an RFID detector. If the RFID tag hasn’t been removed by the cashier, the alarm will sound.
RFID chips can even be implanted into animals, such as a pet microchip that can be scanned to identify a lost dog. RFID technology is used for this because it can be used effectively at large distances.
What is NFC?
NFC, or near-field communication, refers to technology that allows enabled devices that are near each other to wirelessly share data. NFC technology evolved from radio frequency identification (RFID) technology, and is more fine-tuned. NFC has become a popular term in the payments industry in the last couple years with an increase in contactless payments via mobile wallets. NFC payments have increased in popularity because they provide a quick and simple way for consumers to pay, saving them time at checkout.
What is the Difference Between NFC and RFID?
While RFID technology can be used over long distances, NFC technology is limited to small distances. RFID tags can generally be scanned at distances of up to 100 meters and do not require a direct line of sight to the reader. NFC generally requires a direct line of site to the reader, and also requires the communicating devices to be within a few centimeters of each other.
One-Way vs. Two-Way
RFID enables a one way wireless communication - typically an RFID tag sending data to an RFID reader. Although only capable of one-way communication, RFID devices can be active or passive. Active RFID devices have their own power source, whereas passive ones do not have their own power source and are powered by a reader.
NFC is capable of both one-way and two-way communication, meaning it can act as both a reader and a tag. This allows NFC to be used for more complex interactions such as peer-to-peer (P2P) data sharing as well as card emulation.
- One-way communication: One-way communication requires an active NFC and a passive NFC device. An example of one-way communication is the interaction between an NFC-enabled smartphone being used for payment and a card reader.
- Two-way communication: Two-way communication requires two active NFC devices. One example of this is the communication that occurs between two NFC-enabled smartphones during a file transfer.
Volume of Data Read at One Time
RFID tags can be read quickly in batches, making the technology a good fit for tasks such as inventory management. In contrast, only a single NFC tag can be scanned at one time, making NFC a good fit for contactless payment transactions.
RFID can operate at 3 different frequency ranges, allowing the technology to be tailored for different uses:
- Low Frequency (LF): 125-134 kHz, with a range up to 10 cm
- High Frequency (HF): 13.56 MHz, with a range up to 30 cm
- Ultra High Frequency (UHF): 856 MHz to 960 MHz, with a range up to 100 m
NFC, as a more honed subset of RFID, operates within the High Frequency (HF) range of the RFID frequency spectrum.
RFID technology is generally used for identification. Examples include:
- Asset tracking
- Race timing
- Attendee tracking
- Inventory management
NFC technology is generally used for communication. Examples include:
- Contactless payment
- Information/data sharing
- In-store check-ins
- Post-sale product experiences (such as scanning QR codes on posters for additional product information)
Growth of RFID and NFC Technology
With the number of RFID devices in use estimated to hit 35 billion in 2020, the technology will continue to grow and drive innovation. Planned improvements include creating RFID tags and readers that can not only determine if a retail product is in stock, but even tell which shelf it’s located on.
As far as NFC goes, two billion NFC-enabled devices (such as smartphones) are in use today - meaning that over 20% of the world’s population has access to NFC technology.
With RFID and NFC technology continuing to expand, and contactless mobile payments continuing to grow as a preferred payment method, ISVs need to be able to offer the latest payments technology within their software solutions in order to stay competitive in the ever-evolving payments landscape. Global Payments Integrated supports all major digital wallet, NFC and EMV contactless solutions, allowing consumers to pay using contactless cards or the personal devices they carry with them daily. Contact us today to learn more.