NFC vs. Bluetooth beacons: More different than similar

By Martin Keenan   |   August 12, 2016

Bluetooth Beacons and NFC (Near Field Communication) are often mentioned in the same breath, but in terms of technology and applications, they are not really that similar. Here’s a quick run down of the differences between the two technologies. 

NFC is a short-range communication technology that works best over a range of a few centimetres or less, with typical applications asking the user to deliberately ‘touch’ devices together to initiate contact. NFC is designed especially for payment transactions and it’s commonly used for contactless credit card payments and payment-related applications such as travel tickets. Use of NFC in smartphones enables both mobile payments and things like file sharing between phones that are in close proximity (such as to share contact details). There are also some applications for NFC tags, where the user ‘taps’ or ‘bumps’ their phone on a dedicated NFC tag at a particular location (or on a particular object) to learn more about it.

In the case of NFC tags, the user typically touches their phone to the tag, at which point RF energy from the phone powers up the chip in the tag, which executes its program. Typically this program would transmit the contents of its memory to the phone. One of NFC’s advantages is that the tag (or credit card) doesn’t need a power source – it is passive and is simply read or written to by the powered terminal. 

Beacon technology uses Bluetooth Smart, an ultra low power version of Bluetooth, which works over a range of a few metres to tens of metres. Beacons continuously transmit a packet of data so that when a smartphone passes by, it receives and decodes the packet, which contains the Beacon’s ID number. This ID number is used to retrieve information about what kind of action should be triggered by being in proximity to this particular Beacon, for example, popping up a notification, opening a browser and navigating to a website, or some other app-specific action. 

Bluetooth Beacons are intended for enabling a smartphone’s location based services – in other words, services that trigger a response to the phone’s physical surroundings without needing to be paired to it. So far, the majority of use cases have been in retail environments. For example, when a shopper reaches the cleaning products aisle in the supermarket, their phone receives a signal from a battery-powered Bluetooth Beacon in that aisle which has a notification pop up on their phone with a coupon for a particular brand of fabric softener. Users can even be tracked around the store as they shop, so they can be marketed to more effectively. Other use cases include indoor mapping in large buildings such as airports. 

The upcoming version 5 of the Bluetooth specification, which will be released around the end of this year, will offer extended performance such as quadruple the range or doubling the speed of Bluetooth Smart signals. Crucially for Beacons, richer, more intelligent messages will be enabled since the capacity of broadcast messages will increase by a factor of 8. This is set to be a big factor in the explosive growth of Beacon technology: more than 371 million Bluetooth enabled beacons are projected to ship by 2020, according to ABI Research.

There are two key areas of overlap in terms of applications. The first is mobile payments. Android’s mobile payment technology, Android Pay (set to launch imminently in the UK) uses NFC. Meanwhile, Apple’s version of Bluetooth Beacon technology (called, unsurprisingly, iBeacon) is used for payments in Apple Stores when customers check out using the company’s app. Using Beacons for mobile payments is not as straightforward as tapping a credit card or smartphone on a contactless NFC terminal. Typically, the store’s app on the phone receives a packet from a Beacon letting it know that the consumer is in a branch of that particular store, while the retailer’s system is also alerted that the consumer is inside the store. At checkout, the staff can assign purchases to the customer’s mobile payment account on their system, after independently verifying the consumer’s identity. In this space, NFC probably has the edge; being specifically designed for payments, it is tried and tested in terms of both ease of use and security. A typical transaction would involve selecting the account the consumer wishes to pay with in their mobile wallet app, then simply touching their phone to the point of sale terminal when requested. 

The second area of overlap for applications is location-based services. Bluetooth Beacons are expressly designed for this – they broadcast signals that can be picked up by smartphones, telling them their physical location, and the smartphone can act on this data as the consumer wanders past. However, many consumers don’t like the idea of being tracked around a department store, feeling their privacy has been invaded. There’s also the issue of beacon overuse; too many notifications and adverts popping up as you’re just trying to do the shopping can become annoying and intrusive. Using NFC for location-based services presents an alternative as the consumer has control of which messages they want to receive, since they need to deliberately touch their phone to the NFC tag to get the information. On the downside, unless they actively do this (perhaps feeling adverse to marketing materials), they will miss the tag completely and miss out on potentially helpful or interesting information. 

The differences between these two technologies mean that there is definitely room for both in the smartphone, even if they are unlikely to compete within applications. While Bluetooth has been a standard feature in smartphones for years, NFC has a lower, but growing, level of penetration, which will be driven by the acceptance of mobile payment technologies.

Avnet Abacus stocks components for both NFC and Bluetooth products, and our dedicated team of technical specialists can help you navigate the pros and cons that they present. To learn more, or discuss your design, get in touch in your local language through our Ask an Expert page.

Want more like this? Sign up for our newsletters

About Author

Martin Keenan

As Technical Director, Martin is responsible for technical marketing strategy across IP&E, power and...

View Bio