You may be familiar with the acronyms RFID and NFC, but understanding their differences can quickly get overwhelming.
As a business owner, both RFID and NFC can have use for your payment processing. However, these uses are different and require thorough clarification before understanding which suits you.
During my last decade of studying and running businesses, I’ve frequently encountered RFID and NFC. I can confidently guide you through their differences and purposes.
Without further ado, let’s get started!
What is RFID (Radio-Frequency Identification)
Radio-frequency Identification (RFID) relays distinguishing information from electronic tags to electronic readers using radio waves.
RFID tags appear across dozens of industries for inventory tracking and payment purposes.
Some of these industries include:
- Automobile parts
- Garment shipping
- Public transport and tolls
- Asset management
- Animal identification
- Access control for buildings and tourism
Regarding inventory, RFID tags allow the shipped items to be tracked throughout manufacturing and shipping to ensure they arrive safely and adequately at their destination.
If you’ve never heard of an RFID tag, you’ve likely come across one without knowing what it is. RFID tags are often placed on garments in-store to prevent theft. These tags then trigger RFID detectors when someone tries to leave the store without having the RFID tag removed through purchase.
Benefits of RFID
RFID tags offer many benefits, including the following:
RFID systems are highly secure. It takes specialized equipment to read RFID data, which is challenging to hack. As such, any lock systems using RFID technology are practically guaranteed to stay locked as long as the RFID is active.
The convenience of RFID is a significant benefit, as well. All it takes to unlock security systems using RFID is the presence of a small and handy RFID key. These keys are usually about the size of a business card, so they’re easy to store.
Finally, and most importantly, RFID technology is diverse. RFID locks, for example, come in a wide range of sizes that can fit many different types of doors and furniture. Alternatively, though, RFID can be used for theft protection. This technology has many other uses because security is always in demand.
Drawbacks of RFID
While RFID does offer a host of advantages, there are a few key disadvantages to look out for when settling on a system:
- Power malfunctions
- Expensive setups
- Slight hassles
One major disadvantage of RFID tags is power shortage issues. When power outages occur, RFID tags are known to malfunction, which can lead to a loss of identifying information. This potential is a major source of uncertainty.
RFID systems are also expensive to set up, not to mention their complexity. As such, these identifying tags are not without hassles.
Another common RFID hassle in warehouses is the inability to scan single items. In some instances, this works well, as many items on the floor can be scanned simultaneously, saving time. However, things can get complicated if you’re trying to scan items from a single shipment.
Near Field Contact or Near Field Communication (NFC) is a technology that allows multiple devices, like an iPhone and a payment processor, to communicate when they’re close together.
If you’ve ever conducted a contactless payment, you’ve had to use NFC. The most common instances of NFC are Apple Pay, Android Pay, and Samsung Pay.
Benefits of NFC
NFC is known primarily for four factors:
NFC makes payments without using your wallet or credit card highly convenient. All you need is your phone.
NCF technology is also versatile — its uses don’t stop at payment processing. It’s also used for public transportation, contactless keyfobs, and inventory management.
Finally, NFC is known to be more secure than credit cards or other payment forms. Your bank information is protected under multiple passwords if your device gets stolen.
Drawbacks of NFC
Like RFID, NFC has a few drawbacks worth considering when deciding whether to invest in one of these systems.
Firstly, NFC technology can be pricey, particularly if you’re trying to deploy it for major-scale operations.
Also, like RFID, NFC isn’t free of security threats. It’s not a perfect system and is susceptible to being hacked — though it isn’t likely.
NFC Vs. RFID
RFID operates according to three different ranges of frequency:
- Low Frequency: 125-134 kHz, with a 10 cm range
- High Frequency: 13.56 MHz, with a 30 cm range
- Ultra High Frequency: 856-960 MHz, with a 100 cm range
NFC tends to operate within the high-frequency range in the RFID frequency spectrum.
Both RFID and NFC technologies can have uses for communication.
NFC technology is used for communication between two devices for things like contactless payments, in-store check-ins, and data sharing.
RFID technology, alternatively, communicates information about the location of a tag.
One Way Vs. Two Way
RFID and NFC differ when it comes to the channels of their communication.
RFID can only handle one-way communication, often in the form of an RFID tag with an RFID reader. Not all RFID devices have a reader — in this case, they’re known as active RFID devices with their own power source.
On the other hand, NFC is capable of one-way and two-way communication. It can perform the roles of both a reader and a tag. An example of two-way NFC communication would be a file transfer between two smartphones.
While RFID tags require readers to extract data, NFC can store far more than simple identification information. It can hold a maximum of 4KB of content, which can consist of text, URLs, and even media.
The best way to remember the different uses between RFID and NFC is that RFID is for identification, while NFC is for communication.
As such, RFID is used for things like the following:
- Tracking assets
- Timing races
- Tracking event attendees
- Managing inventory
Meanwhile, NFC can be used for:
- Contactless payments
- Data Sharing
Nearly every central inventory or warehouse uses special RFID tags for item tracking.
These tags can ensure that damaged items don’t get past the supply chain, track their locations, and ensure they’re in the right condition. These tracking capabilities can seriously streamline calculating inventory turnover.
A well-tracked inventory turnover can offer profits for your small business, too.
Other examples of RFID use include:
- Car rentals
- No-swipe tickets at amusement parks
- Robbery-proof chips at casinos
The most common NFC example is contactless payments, but they also have a host of other uses.
For example, NFC-enabled business cards are gaining popularity as a way to expand and market your business.
NFC can also be used for access authentication, venue check-in, unlocking car doors from apps, and transit card payments.
NFC and RFID are constantly expanding, and it can be hard to keep up with the evolutions of these two wireless links.
I hope this article provided some much-needed clarification so you can be more sure which system is relevant to your purposes.
Do you have any questions? Let us know in the comments below!
Frequently Asked Questions
Neither RFID nor NFC is inherently better than the other — they both have different purposes. RFID is often used for inventory tracking, whereas NFC is more common for payment processing.
NFC is not the same thing as RFID, but it is a subset of the same type of frequency-based technology.
NFC readers can read some RFID tags.
NFC offers two-way communication and functionalities that RFID does not, such as payment processing.
RFID has limited features and is best suited to security systems or inventory tracking.