NFC: Google Wants Your Wallet. And That's a Good Thing.

Wednesday May 25th 2011 by Mike Elgan
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Google’s promotion of NFC, or near field communication, is expected to dramatically change mobile commerce.

Thanks to Google, everybody's talking about NFC this week. The company is expected to make a big, ground-breaking announcement tomorrow.

People are talking about NFC, but the things they're saying are generally wrong. NFC is exciting technology, but not for the reasons people think it's exciting.

NFC stands for "near field communication." It's a wireless technology similar to Bluetooth, but with a much shorter range — about an inch and a half or less. That short range is the key benefit. A wireless technology very short range means that you can control what you connect with, without having to plug anything in.

Here's what you need to know about these three letters and how they're going to change the world.

Google Isn't Announcing Android Support for NFC

Android already supports NFC. Android 2.3, also known as "gingerbread," has native support for NFC. The Nexus S smart phone sold by Sprint, runs gingerbread and has an NFC chip in it. Expect a majority of Android handsets to follow suit.

Google is expected to announce tomorrow a mobile payment system, as well as some partnerships with companies that support that system. Companies include Sprint, Mastercard, Citibank and VeriFone (which makes the machines that can read NFC chips), as well as retailers like Macy's and American Eagle Outfitters and Subway. The payment system is expected to be rolled out in five cities: New York, San Francisco, Los Angeles, Chicago and Washington, D.C.

So if you live in the right city, and have the right credit card and shop in the right store, you'll be able to use Google's system if it occurs to you do so.

That's exciting news not because it ushers in the NFC era instantly for everyone, but because it's a real first push into that ushering. Google deserves credit for pushing forward while everyone else holding back.

NFC isn't new technology

The technology is about 10 years old. The Dutch company NXP Semiconductors, a co-inventor of NFC technology and the leading maker, expects to ship about 70 million NFC chips this year. NXP is an interesting company. They're the guys who make that crazy wireless light bulb Google highlighted at Google I/O.

NFC has been around for a while. What's new is that we're reaching the bend in the hockey stick for NFC growth. Like electricity 100 years ago and the Internet 20 years ago, NFC is a technology that has been around for awhile without affecting people's lives, but that will spark a thousand revolutions that will change everything.

NFC isn't going to change everything quickly

If you're an Android using early adopter initial target area to patronize the businesses Google has partnered with, your in luck! Google's announcement this week will change your world.

But for the average consumer out there, NFC isn't going mainstream suddenly or soon. The technology will creep into general use slowly over the next five years.

Payments aren't the most exciting thing about NFC

Industry giants like Google push commerce because that's their business. The most exciting applications for NFC are virtual business cards, universal authentication and sync.

Right now business people still practice the barbaric ritual of exchanging contact data on slices of tree pulp. The human has to later read the data and type it in to a contact database, or scan it and hope the optical character recognition software doesn't make a mistake.

NFC will enable people to simply bump phones together and have their contact information exchanged in both directions.

Currently, we have to have a different password or PIN for every business, website, service — you name it. NFC enables us to use either biometric identification or opinion or password on our device, and have the device authenticate us. This would make authentication both far more convenient and far more secure.

As devices proliferate, wouldn't it be great to simply set your phone on top of your tablet or your PC and have those devices synchronize? Combine the password thing with the sync thing and you can imagine the future of using the computer.

You simply walk up to any PC or terminal, set your phone or iPad on a special place-in device, and it will synchronize anything you preauthorized it to sync with. It will also authenticate you for anything you do on that device, such as visiting websites, checking your bank account and so on.

The iPhone 5 will not have NFC

The Apple rumor mill predicted back in March that the upcoming iPhone 5 would support NFC. According to a variety of reports, that isn't going to happen.

Apple tends to be conservative on these things and probably won't sell NFC phones before they have a bulletproof way to make a lot of money from them.

When they do embrace it, I'm sure they'll do it big, and try to turn the whole world into an App Store. But for now, Apple's competitors such as Google, Research in Motion, HP and Microsoft will probably all beat Apple to market with phones that support NFC.

NFC will not enable wireless pick-pocketing

People hesitate about embracing new technology, especially wireless technology that involves hooks into bank accounts. But NFC isn't especially insecure. On the contrary, it replaces spectacularly insecure things like credit cards and passwords.

Yes, virtual pickpockets will be able to hold the device close to your phone, even through the fabric of your pocket, and get within range of that NFC chip. However, security for the chips is pretty good and will always require some kind of on-screen approval, pin, password or biometric scan.

NFC isn't only about cell phones

The technology requires a reader and a "target." Targets do not need to be powered. That means NFC chips can be installed into clothing, keys, stickers — just about anything.

The world's embrace of NFC technology is long overdue, in my opinion. I'd like to see us get there a whole lot quicker.

Google's announcement tomorrow represents a bold push in that direct. When Google adds more cities, more partners and more options, I just might dump my iPhone and buy an Android device.

Google wants you to throw your wallet in the trash. And it's about time somebody did.

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