There is much confusion on how NFC differs from other wireless technologies like Bluetooth and RFID. When I went secret shopping at a cellular carrier, they told me NFC was the same thing as Bluetooth. There are some similarities between the three, but each has its own uniqueness and purpose.
Forget cables! Bluetooth allows you to connect to or ‘pair’ with your devices without the need for cables. My car has Bluetooth and I can use it to connect my smartphone to my radio, play my favorite music, and talk on the phone. Without Bluetooth, I would need to use and audio cable to transmit the data. Same applies to my Amazon Echo and shower speaker (Yes I have a speaker in my shower to hear News Talk 1037 in the morning. For my MacBook Air, I use Bluetooth to connect my mouse. All of these things used to require cables to transmit data, but Bluetooth provides a seamless way to transmit data between devices without the need for cables. Bluetooth can travel up to 10 meters and is built into most computers, smartphones, and tablets in addition to vehicles, speakers, wearables, and other devices.
Bluetooth (BLE) can be used in smartphone applications to send a message or change the behavior in someway on a smartphone. For example, if I have an app for a store and walk past that store, I may get a push notification. Unlike NFC, Bluetooth transmits data over a long range and outside of downloading an app for a retailer that uses BLE, there is not a formal opt in process. The problem with that is if you connect with a lot of places using BLE, you could be bombarded with notifications.
BLE does not allow for card emulation for applications such as payments, which is a good thing given how far the range travels. Bluetooth does allow for the transfer of data between devices or Peer-To-Peer.
RFID or Radio Frequency Identification is most commonly used for tracking inventory locations and other logistical applications. RFID tags on products can be read by a special reader devices up to 100 meters. For most uses of RFID, a special reader is involved and they tend to be expensive. On the consumer end, there is not a device to readily read these tags. The communication is also one way. This means that if I read a warehouse, I can see that I have 100 widgets for example or if I walk out of a store with a product, a bell may ring. Being a one way form of communication RFID is very different from NFC.
NFC or Near Field Communication supports two way communication like Bluetooth and is also built into well over 1 billion devices. The difference is that it offers a higher level of security and control on the consumer side. NFC has a very close range, very effective within a few centimeters. This means that those who want to engage and use NFC must touch or wave their phone over an NFC tag. This is great because you, the consumer, are opting into the interaction. This differentiates NFC from Bluetooth. NFC also has a card emulation mode, which allows for the processing of things such as mobile payments. Bluetooth cannot facilitate that.
Since NFC is close range and secure, it is great for marketing materials, exchanging data between devices securely, make payments, and a variety of other uses, where a more ‘intimate’ form of communication is desired.
NFC by design works with Bluetooth to streamline, what can be a pain in the rear process of pairing devices. As an alternative to RFID, the short range that NFC provides keeps data more secure and also can be used in billions of devices, where RFID cannot.
Below is a useful graphic from the NFC-Forum, that I found very useful in explaining the differences to consumers in the industry, who are looking into NFC solutions.