The Groundbreaking Introduction Of NFC Identity Verification

Have you ever questioned how tap-and-go services such as Apple Pay work? Although it may seem like new technology, it really isn’t. 

To put it simply, NFC, which stands for Near-Field Communication, is a technique of transmitting data through a wireless channel. The technology is enabled by bringing two compatible devices into proximity and actively transferring data from one device to another without the need for an internet connection. This method is quick, convenient, works automatically, and ensures higher security. For this very reason, NFC identity verification is gaining popularity in major industry sectors.

How Does NFC Work?

The technology that enables near-field communication verification is deceptively simple. Being more of an evolutionary technology, it works on the same principles of radiofrequency identification (RFID) technology which was introduced back in 1982 by CharlesWalton.

Now, to understand how it works, suppose you and your friend want to exchange a playlist while at school. Unfortunately, Wi-Fi has not been enabled on-premises, To allow data sharing between two devices in such a scenario, the following steps would take place:

1. Activated NFC in two compatible smartphones
2. Tap the devices together
3. The playlist is automatically transferred

Simple right? 

This process is particularly gaining prominence as it does not require any pairing code and is highly power-efficient compared to other wireless communication technologies, such as Bluetooth.

How Does NFC Identity Verification Work?

An NFC-enabled device can scan microchips present in credit/debit cards, passports, or ID cards. These chips are embedded with the holder’s Personally Identifiable Information (PII) such as their full name, date of birth, nationality, gender, address, date of issuance and expiry, etc. The touch-based NFC reader simply extracts these details from the document provided through a simple tap between the document and the reader.

NFC identity verification is of vital importance for institutions such as banks, fintech, and insurance firms as it provides an extra layer of security. In particular, it is crucial for eliminating synthetic identity fraud, in which imposters combine original information with fake identity details to form ID document verification that seems legitimate. This sort of fraud is highly difficult to detect through manual methods of identity verification. However, NFC-based verification solutions verify ID documents not through the content seen by the naked eye, but by scanning the information embedded in the microchip.

Benefits of NFC Identity Verification

In today’s the technologically advanced world, an increasing number of individuals are giving up credit cards as a favorable way of paying, and instead, prefer smartphone-enabled payments. Given this trend, it is of no surprise that the NFC technology market is projected to reach a value of USD 34.9 billion by 2025, up from USD 18 billion in 2020.

Apart from verifying ID documents, NFC identity verification offers the following benefits:

1.     Better Customer Acquisition

Building a loyal customer base is much more difficult when the customers are being verified through conventional methods, as it causes inconvenience by requiring end-users to physically visit a branch prior to making big transactions. 

On the other hand, NFC identity verification allows banks to streamline identity authentication during the customer onboarding process simply through touch between an ID document and an NFC reader. In this way, companies can increase acquisition rates without compromising on customer experiences.

2.     Enhanced User Experience

For businesses to sustain and retain customers in a highly competitive market, customer experiences are placed on high priority. With the help of NFC identity verification solutions, firms can equip themselves with up-to-date and convenient methods of verifying identities.

From the customer’s end, all that is required is to scan their identity documents that are embedded with a microchip against an NFC-enabled device. The chip contains authentic personal details of the holder. Within a few seconds, the end-user is verified and can continue carrying out their transactions in a friction-free manner.

Key Takeaways

-       NFC is a technique of transmitting data through a wireless channel

-          It works on the same principles of radio frequency identification (RFID) technology

-          NFC identity verification is of vital importance for institutions such as banks, fintech, and insurance firms as it provides an extra layer of security

-          Additional advantages for businesses using NFC identity verification include enhanced user experiences and a higher rate of customer acquisition.

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