Near Field Communication: Tomorrow Calling

Once upon a time, if you wanted to call someone, you did so from a landline or payphone. If you wanted to read a book, you grabbed a paperback. And if you wanted to pay for something, you pulled out your wallet.

But the advent of the smartphone brought a whole new way of doing things. At first, it was just the convenience of not having to hunt down a quarter and a working payphone. Then you could play games and listen to music to while away the hours.

Now, our smartphones can be used for all manner of business. Companies target us with SMS marketing, coupons sent directly to our phones, and other specials. Near field communication technology is also being implemented in more and more phones, making it easier to pay for goods and services.

Near field communication (NFC) technology enables smartphones and other devices to establish a radio connection by touching them together or bringing them within close proximity of one another. This technology hasn’t been heavily adopted in the U.S. yet, but John Devlin, an NFC analyst at ABI Research, expects the number of NFC-capable phones will nearly double this year. Mark Hung, an analyst for Gartner, predicts that growth will exceed 100 million handsets in 2012.

Visa Europe has recently certified NFC-enabled smartphones from Samsung, LG and RIM for use with the Visa payWave app. Even cars are getting in on the action; in the 2012 Consumer Electronics Show in Las Vegas, international automotive supplier Continental demonstrated NFC technology in lieu of a traditional car key.

Helmut Matschi, Executive Board member of Continental AG and head of the Interior division, explained this new technology: “The secret of success for new innovations in the automotive industry continues to be derived from ease of use, intuitive operation and a way of functioning that seems almost like magic. More and more often, the basis of these innovations is the ever tighter networking of the consumer electronics industry with the automotive industry, and the digital car key is an excellent example of that.”

While this technology is relatively new and unproven in the American market, it has already been in use in the UK for a while now, and is gaining popularity as more and more people find it to be a trustworthy way to conduct business. Already, approximately 170,000 UK consumers use eBay’s mobile app, while PayPal saw a 552% increase in mobile transactions in 2011. Google plans to launch Google Wallet in the UK this year, as well.

While many are eager to embrace this new technology, there are a few disadvantages that come with it (as there is with anything new). The first disadvantage is the cost that will be required to enable this technology, both with users and businesses. In addition, some are concerned about who will have access to their personal information. Finally, many are worried about security, and whether hackers will be able to access information, as they were recently able to with Sony.

Despite these concerns, this technology is gaining popularity in the UK, and it’s just a simple hop across the pond before it hits the U.S. Knowing Americans’ penchant for newfangled technology, it will only be a matter of time before you will start to see this in grocery stores and gas stations near you.