By Mary Catherine O'Connor

Aug. 1, 2006—Mobile phones already have plenty of muscle: Many can snap digital photos, play music or video games and send and receive e-mail. Now a growing number of handset hardware manufacturers, software developers, banks, credit-card organizations and mobile telecommunications companies are joining forces to beef up mobile phones with a new technology—near-field communication (NFC), which will let users make payments, gather information and eventually exchange data with other mobile electronic devices.

The NFC Forum, an industry group founded by Nokia, Philips and Sony to promote the technology's adoption, is working to standardize NFC protocols. The technology is based on high-frequency (13.56-MHz) short-range RFID tags and interrogators that comply with ISO air interface standards 14443, 21481 and 18092. An NFC RFID tag is integrated into a cell phone's circuitry and can function as a passive tag or an interrogator, depending on the application.

Nokia was the first company to add NFC capability to its mobile phones. The 3220 model (above) is designed for consumers.

When an NFC-enabled phone is presented to an RFID payment terminal, it acts as a passive tag, sending encrypted account information to the terminal the same way an RFID bank card or credit card is used to make a payment. The phone acts as an interrogator when it needs to collect data, such as reading a URL for a movie trailer or downloading a ring tone from an NFC-enabled smart poster or kiosk. Software, in the form of an application-programming interface (API), runs on the phone's operating system and sends the URL to the device's built-in Web browser, which downloads the appropriate data to the phone.

Nokia was the first company to add NFC capability to its mobile phones. Its 5140 and 5140i NFC phones, available in Asia, Europe and Latin America, are for commercial applications. The 3220 model is designed for consumers and is available worldwide. Samsung and Motorola have built prototype NFC models that are currently being tested in trials but are not yet commercially available.

The first application Nokia developed is called the Field Force Solution. It allows companies to keep abreast of the routines and special needs of field-deployed employees. It also provides a way for field employees to clock in and out of shifts and receive new work assignments.

But NFC technology is being most widely tested and deployed in consumer applications. Commuters in the German city of Hanau can use their Nokia NFC phones to purchase fares for the public transit system. NFC-based payment trials have also been completed or are planned in other European countries, including one using Nokia phones in Amsterdam, with credit-card organization JCB International and France Telecom, and one involving Samsung phones in France, with French credit-card organization Cofinoga and Dutch telecommunications firm KPN.