What is an NFC Tag?

The concept of paying for groceries or filling up your gas tank by simply tapping one small device to another may have seemed like a fantasy not too long ago. Today, this technology is widely used, thanks to near-field communication (NFC) and the smart tags that integrate with NFC.

NFC isn't a revolutionary new technology. Similar to Bluetooth and WiFi, it's a wireless communication standard. In the realm of wireless technology, NFC's closest and primary relative is RFID (radio frequency identification). RFID is especially popular with retailers and shipping companies for tracking inventory and deliveries. You might also use an RFID-enabled ID badge to tap into your workplace.

NFC operates similarly to RFID, but it’s designed for closer, more personal wireless interaction. While RFID can be used over greater distances, NFC readers have a maximum range of about 4 inches (10 centimeters). Because of this short range, NFC readers aren't ideal for tasks like RFID-style inventory tracking. Instead, NFC tags are employed in situations where exchanging small amounts of digital data quickly is essential.

Unlike RFID, NFC readers are not always dedicated devices. In fact, NFC chips are frequently built right into your smartphone’s hardware. The same technology is often found at retail checkout points. To make a purchase, you simply unlock your phone, authorize the transaction, and bring it near the NFC reader at the register.

NFC has uses beyond just payment. For example, a smart tag embedded in a political flyer could link you to a website highlighting a candidate’s qualifications. Simultaneously, you’d receive a quick biography and a photo in a text file.

At your favorite eateries, tapping your phone on an NFC-enabled menu could give you instant access to the full menu, complete with nutritional facts and enticing descriptions of the dishes. If the system is linked to a payment platform like Apple Pay or Google Pay, you could also pay without entering your credit card details.

To fully utilize the versatility of near-field communication, you need compatible hardware and software to read it. For most people, this is their smartphone or smartwatch and the apps they install. While finding, downloading, and setting up new apps can be a hassle — or even prevent you from using the technology at all — Apple introduced a helpful feature in 2020 called App Clips. By scanning a special NFC code, you can complete transactions, like renting an electric scooter or paying for gas, without needing to install a separate app. [source: Apple].

The possibilities for NFC tag applications are virtually endless. But what exactly gives these NFC tags their remarkable abilities?

How NFC Tags Function

You can refer to them as smart tags, info tags, or, in this case, NFC tags, but their fundamental design is quite similar to that of RFID tags. Both types feature a small storage memory and are equipped with a radio chip connected to an antenna.

The main distinction is that NFC tags are specifically designed to work with NFC systems. They're compact and inexpensive enough to be incorporated into a variety of products, such as posters advertising circus tours, ski lift passes, stickers, business cards, prescription bottles, and even durable labels intended for outdoor conditions.

NFC tags are passive, meaning they don’t have their own power source. Instead, they draw power from the device that scans them using magnetic induction. When a reader gets within range of the tag, it activates the tag and transfers data from it. You can learn more about magnetic induction in How Wireless Power Works.

As of now, there are five types of NFC tags, numbered 1 through 5, each with different data storage capacities, transfer speeds, and read/write functionalities. [source: Blue Bite] Type 1 tags generally hold between 93 bytes and 2 kilobytes and operate at 106 Kbps (kilobits per second); Type 4, which was previously the largest and fastest, stores up to 32 KB and can operate at speeds of up to 424 Kbps. Type 5 can store up to 64 bytes with a speed of 26.58 Kbps.

While all NFC tags are read-only, types 1, 2, and 3 are rewritable. Blank rewritable NFC tags can be purchased by anyone, and they can be rewritten thousands of times. They can also be locked so they cannot be overwritten. [source: ShopNFC] Tags with greater memory and larger antennas tend to be physically larger. Generally, the size of a tag ranges from a couple of centimeters to several inches.

Memory size and speed influence the cost of NFC tags, a crucial factor for businesses aiming to spread information widely through smart posters or flyers. In 2012, the price of tags was about 30 cents each, even when bought in bulk. However, by 2020, the cost had dropped to less than 10 cents per tag for large orders, enabling fast and extensive distribution of these tags in numerous locations and products.