While near-field communication is a subset of RFID, both technologies come with specific advantages and limitations. Company leaders should learn the pros and cons of each so they can decide which technology is best for their organization.

RFID is more widely applicable across the supply chain, but near-field communication (NFC) has applications in manufacturing settings and can deliver information to retail consumers, among other applications. Other key differences between the technologies include cost and security.

Learn more about RFID vs. NFC, as well as the pros and cons for each technology.

RFID is a type of wireless communication in which an RFID reader, which consists of a scanning antenna and transceiver, harnesses radio waves to send signals to an RFID tag, or transponder. When the tag's wave reaches the scanning antenna, the person using the RFID reader receives information about the object.

The core technology was conceived in the 1940s and tracked military shipments in the 1970s. RFID technology includes several variations that each work across different radio frequencies, data rates and distances. There are two types of RFID tags: active tags, which run on their own power; and passive tags, which use power from the reading antenna.

Supply chain uses for RFID include using RFID readers to get information from tags on individual products or shipping containers. In addition, smart tags can track environmental conditions for product boxes and record when products exceed temperature, vibration or humidity thresholds. Food companies can also use RFID tags to track livestock by injecting animals with tags.

NFC is a subset of RFID technology that was initially designed to support short-range communication for mobile devices. Through magnetic field induction, NFC enables two devices to send messages when they're near one another. Today, NFC is part of all cell phones and most modern credit cards.

NFC is often used to open doors, link devices like Bluetooth headphones to a smartphone, and pay with a cell phone through services like Apple Pay or Google Pay.

A supermarket might put NFC tags on their food products so customers can use their smartphones to scan the tags and get more information about ingredients. NFC can also be useful in a manufacturing setting. For example, a worker can scan a machine's NFC tag to get information about how it works.

RFID is far more configurable and customizable than NFC. Low-frequency RFID has a small read range, but low-frequency RFID waves can pass through water or metal. High-frequency systems can support ranges of a few inches to a few feet, while ultra-high frequency systems can range 25 feet or more. RFID can also help a company keep costs down, improve data capture or meet other requirements. For example, RFID tags can monitor inventory in a cost-efficient way, and record a product's history to give supply chain leaders more insight into the product shipping process.

The biggest disadvantage of RFID tags is their lack of security. Any user with the correct reader can access the information on the tag.

While NFC isn't free from security weaknesses, it's more difficult for hackers to access than many other types of RFID because NFC sends information through magnetic field induction, and the field fades faster.

However, NFC's short range can be a disadvantage in various use cases. For example, NFC technology isn't a good fit if the user needs to scan tags on a long line of products stretching to the back of a shelf. In addition, NFC tags tend to be more expensive than many types of RFID tags because of the additional encryption cost. Because of this, NFC tags are less suited, for example, to a retail store where every item of clothing needs a tag.

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