A Near-Field Communication chip (NFC chip or NFC chipset) is a silicon component or Integrated Circuit (IC) that can be used in different ways, depending on the targeted application.

When connected to an appropriate antenna, an NFC chip enables short-range, wireless communication between two devices. This provides an additional layer of security, as only devices within close proximity of each other can communicate via NFC.

For instance, the NFC technology can allow contactless communication between:

A payment card and a payment terminal.

Two electronic devices.

A smartphone and a consumer product.

The NFC chips embedded in each component of the system make the wireless communication possible. For example, an NFC chip can be embedded in a banking card and a payment terminal, or in a passport, where it is used to store biometric data.

How does an NFC chip work?

An NFC communication system includes two separate parts: an NFC reader chip and an NFC tag. The NFC reader chip is the active part of the system, because as its name suggests, it “reads” (or processes) the information before triggering a specific response. It provides power and sends NFC commands to the passive part of the system, the NFC tag.

The NFC technology is frequently used in public transport, where users can pay using their NFC-enabled ticket or smartphone. In this example, the NFC reader chip would be embedded in the bus payment terminal, and the NFC passive tag would be in the ticket (or the smartphone) that receives and replies to the NFC commands sent by the terminal.

There are three types of NFC chips: NFC readers, NFC tags, and NFC controller chips