Will Smart Homes Become the Next Fulcrum for the NFC Market after Mobile Payment?

Engendered in 2002, near-field communication (NFC) stands out from among other wireless connection technologies. With an operating frequency of 13.56 MHz, maximum speed of 848 kbps and typical communication distance of 10 cm, it is a safer and more controllable wireless communication technology in comparison to the others. Supplying power to either one of two NFC devices establishes a two-way data interaction. The other device may remain in a passive state without power consumption, highlighting NFC’s obvious advantage in low power consumption.

Market responses to NFC applications, however, have been lukewarm thus far. According to Research and Markets, the global NFC market is expectedly to rise rapidly to US$47.43 billion by 2024. Two main catalysts for this projected growth are the universalization of NFC terminal devices and the rapid adoption of mobile payment.

Market reports released by ScientiaMobile showed that, from 2015 to 2018, the proportion of NFC-enabled mobile phones produced by the world's top 12 smart phone manufacturers has continued to grow, and that NFC has become a standard feature in mid- to high-end mobile phones. Huawei, for instance, has increased their share of NFC mobile phones from 38% to 71%, while the latest NFC technology is a new selling point of Xiaomi's flagship phone, the Mi 9, that was launched last month. These developments show that the client hardware environment for NFC applications is gradually maturing.

Although QR code payment, in China primarily offered by Alipay and WeChat, still dominates the mobile payment market, NFC payment has found its foothold and began expanding its territory. Now, it has become routine for urban commuters to use NFC on public transport. For example, the NFC-based QuickPass offered by China Unionpay has accumulated as many as 120 million users within just one year of launch, while other major mobile phone manufacturers and operators are also establishing their own payment ecosystems to break the monopoly of QR code payment. With this rise in user awareness and prevalence, developers will no doubt be highly motivated to pursue technological breakthroughs.

In fact, the scope of NFC applications is not just limited to mobile payment. Technically speaking, NFC defines three different communication and interaction modes, namely:Reader/Writer mode: In this mode, a NFC-supported device obtains information or initiates an operation through interaction with another device. The initiating device may read data from the other device or write data into that device.

• Reader/Writer mode: In this mode, a NFC-supported device obtains information or initiates an operation through interaction with another device. The initiating device may read data from the other device or write data to that device.
   
• Peer-to-Peer mode: Also known as P2P mode, it allows files to be exchanged between NFC devices or enables consumers to earn membership points whenever they make a purchase.
   
• Card-emulation mode: This mode allows an NFC smartphone to “emulate” a contactless smart card that meets the ISO/IEC-14443 standard and be “swiped” as a smart card on infrastructure that supports contactless smart cards. Applications can include ticketing, access control, traffic, tollgates, payment, and so on.

As such, the NFC payment in smartphones that we are familiar with only utilizes the card emulation mode. The potentials of NFC technologies are far from fully realized, but what exactly will it take to trigger the exponential growth of NFC applications? It is generally believed that the smart home market may be an important domain for NFC development.

 
Figure 1. Typical NFC application scenarios in smart home appliances (Source: NXP)

Let’s try to imagine some of the roles that NFC could play in future smart homes based on its technological features.

Device pairing: An increasing number of home appliances require pairing with mobile phones, such as the wireless Bluetooth headsets and speakers that we are familiar with. However, the cumbersome process may be daunting to users. Now, one simply needs to place two NFC-enabled devices in close proximity to each other and they will be paired instantaneously without conflicts. 

Network debugging: Adding new smart device nodes to the smart home network will become a frequent demand in the future. Since NFC can trigger other wireless connection protocols, a simple touch on a NFC node device and home gateway completes the device networking for your Bluetooth, ZigBee, Wi-Fi or other connection devices. What’s more, this will prevent “unwanted” nodes from being added to the network to achieve better use experience and higher security.

Human-machine interface extension: Due to limited resources or function requirements, the IoT devices in many smart homes do not feature user interfaces with higher graphic displays, making the human-machine interface user-unfriendly. If NFC functions can be integrated in home appliances, then a mobile phone screen can be converted into an extended human-machine interface for home appliances simply by placing an NFC mobile phone in close contact with the device. This will enable users to effortlessly perform more complex setups and controls of home appliances.

Anti-counterfeiting certificate for accessories: When it comes to home appliances that require frequent replacements of accessories and supplies, such as the water dispenser, it is always a concern if we have bought counterfeit parts or supplies. Home appliance manufacturers can have NFC anti-counterfeiting tags built into the accessories which, upon being installed in the main body of the appliance, will be authenticated by the NFC card reader within the main body. These tags can also automatically complete configurations for the accessories and supplies, monitor their usage status and send prompt reminders on maintenance and replacement to users.

User identification: A personalized NFC tag that is “attached” to a user can enable home appliances to process personalized setups based on the user's preferences. For instance, to use a treadmill shared by the entire family, each family member can complete NFC data interactions and set up personalized treadmill parameters simply by touching the treadmill with an NFC mobile phone or a wearable device.

Maintenance and upgrade: How did we use to deal with home appliance malfunctions? Calling the customer service to request maintenance used to be the first thing that comes to mind, but it’s an option that’s costly for home appliance manufacturers and users alike. With NFC, users can read the device failure information by placing an NFC mobile phone close to the device. The information can then be transmitted to the home appliance manufacturer for diagnosis and determination of subsequent maintenance plans. If the device is a node device with I2C interface, the firmware can even be undated and upgraded via the NFC communication channel.

To achieve the full realization of NFC applications in smart homes, NFC technology manufacturers invested massive amounts of research in product design. In addition to basic NFC solutions such as “card reader + tag,” manufacturers have also integrated functions such as MCU and extension interface into NFC to meet broader application requirements.

 
Figure 2. Different application development requirements have their respective corresponding NFC products (Source: NXP)

In the meantime, to further reduce the “distance” between NFC and target applications, an increasing number of NFC solutions have been developed, including tested hardware solutions as well as related software libraries, on the basis of which commercial NFC products and solutions can rapidly evolve simply through secondary development.

 
Figure 3. The NFC card reader module solution developed by Avnet can quickly integrate NFC technology into smart meters and other related applications to add the required mobile payment function (Image source: Avnet)

 
Figure 4. Diagram of NFC card reader module solution system developed by Avnet (Image source: Avnet)

So far, the exponential growth of NFC applications in the smart home market has yet to be sparked. The growing prevalence of NFC products and the technology’s promising start in the market of mobile payment have nevertheless given people enough faith to “await” its ultimate market triumph by doing what they can and letting “time” determine the final outcome.