How to choose between NFC and RFID for industrial asset tracking

Asset tracking and inventory tracking are two important business process areas that industrial companies are digitally transforming — in sectors such as oil and gas, mining & metals and chemicals. The prevalent wireless technologies being used are Radio Frequency Identification (RFID) and Near-Field Communication (NFC). RFID and NFC have many similarities — so it may be confusing which one of these technologies is the best choice for your specific application. In this article, we’ll provide an overview of their different strengths to help you make an informed decision if you need to choose between the two.


RFID technology was invented in the 1980s, and has been improved upon ever since. It is a wireless, contactless communication technology. RFID tags usually contain an antenna and a memory chip that stores data.

To read this data, an RFID reader is needed. The reader hardware can usually get quite pricey, with prices as high as $3,000. Tags are embedded into the asset or inventory, storing relevant data, and this data is retrieved by the reader. There are two types of tags: active and passive tags. An active tag has its own power source, whereas a passive tag has no power source of its own, and it has to be supplied with energy via an electromagnetic field produced by the reader.

RFID tags do not need to be in the line of sight of the reader to be read, and can be read up to a distance of around 650 feet (200m). The distance is determined by whether it is an active or passive tag (active tags allow for greater distances), and the type of radio frequency used. The table below shows the types of frequencies used by RFID tags, and the distances they allow.


While in certain cases it can store larger amounts of data, RFID tags are usually only used to store simple identification information — allowing it to replace barcodes. Whereas barcodes need to be scanned one-by-one, at close range, RFID allows for the scanning of multiple tags at once, at a much greater distance. Therefore, RFID is used extensively for asset and inventory tracking in warehouses, logistics, airport baggage handling and even livestock identification.

Benefits of RFID

  • Many tags scanned at once
  • Data can be scanned at great distances
  • Line of sight is not needed to read data
  • Can be deployed in a variety of environments
  • With the correct equipment, data can be written to tags
  • Tags cost less than $0.10 (typically depends on volume purchasing)

Use cases for RFID

RFID is best used when tracking inventory through the supply chain or gathering information from many assets at once that are usually in hard-to-reach places. Applications where RFID is used include:

  • Inventory tracking — locating items within a space.
  • Asset tracking/monitoring — acquiring identifying information from assets or equipment in hard-to-reach places.
  • Loss prevention — receiving alerts if a tag leaves a certain area (for example, tags on clothing in department stores).
  • Access control — secure access control based on unique user information stored on tags or cards.


NFC is actually a subset of RFID technology and was invented in 2002. As RFID, it is a wireless, contactless data transfer technology that uses tags or cards to store data, that do not need to be powered. One of the areas where RFID and NFC differ greatly is the distance at which data can be read: whereas RFID works at distances of hundreds of feet, the maximum distance at which NFC works is around 4 inches. While NFC data has to be extracted at short distances, it also does not require a direct line of sight to work.

Another significant difference is that while RFID is typically only capable of one-way communication (from the tag to the reader), NFC is capable of two-way communication. With specialized (and more costly) equipment, RFID can write data to a tag. Commonly, though, with NFC data can be read from and written onto a tag, and it can also be locked into being read-only. NFC can only scan one tag at a time, as opposed to RFID that can scan multiple tags in one go.

NFC can also store more complex data than simple identifying information. NFC tags can store up to 4KB of data. This data can take on numerous formats including text, URLs and media. While RFID tags usually require expensive readers to extract data, most modern-day smartphones are fitted with NFC reading capabilities. This greatly reduces the cost of implementing NFC tags, as users can simply use their smartphones to read data. Smartphones can read and write data onto a tag or card, obtain detailed metadata, launch an app or URL when the tag is scanned, and also share data between phones using NFC (peer-to-peer (P2P) communication).

Benefits of NFC

  • Increased security due to required close proximity.
  • P2P communication.
  • Ability to read and write data onto tags.
  • Usually used to store more complex data than RFID.
  • Readers available on most smartphones: no need need for expensive additional hardware.
  • Some NFC readers can also read RFID, but not vice versa.
  • Line of sight is not required.
  • Tags cost less than $0.10 (typically depends on volume purchasing).

Use cases for NFC

NFC has numerous applications for companies as well as for the consumer. NFC is a growing technology, and its versatility will only increase. Applications where NFC is currently used include:

  • Contactless payment — card emulation by the NFC-enabled tag or device, allowing for “tap to pay” functionality (Apple Pay, Samsung Pay etc.)
  • Access control — more secure access control on cards or tags
  • Asset tags — NFC tags on assets, allowing users to extract rich and historical data on the asset.
  • P2P file transfer — secure and quick transfer of data between devices

In Conclusion

Both RFID and NFC can be highly valuable to industrial companies. While RFID data can be read from multiple tags at once, at great distances, NFC is embedded in most smartphones and does not require expensive hardware. RFID does not require a line of sight, while NFC usually stores more complex data. NFC is also more secure due to its need for close proximity. RFID is best suited for users that need to identify many assets in a given area, especially if the assets are hard to reach. NFC is best suited to users that need richer data on the tag, the ability to write information as well as reading it, and for whom security is a concern.

RFID is an established technology, while NFC is still evolving. NFC will continue to expand on its capabilities, providing greater benefits to companies that implement it.

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