Combatting Counterfeiting: How NFC Technology is Providing Protection to Key Industries

Counterfeiting is the largest illicit trade in the world, with The National Crime Prevention Council reporting an approximate $2 trillion USD of counterfeit products are sold to customers every year. To put this in context, this is just slightly behind the annual GDP of Mexico ($2.02 trillion USD), the 12^th largest economy in the world.

Certain industries are affected more than others – perhaps most notably healthcare and luxury brands. With high numbers of counterfeit medicines and medical devices on the market, being able to authenticate medicine and healthcare products is critical to avoid the possibility of serious health implications. In the luxury space, it’s critical that consumers are able to verify the authenticity of their purchases and that brands can protect their reputation from being associated with low-quality counterfeit products holding their name or logo.

Increasingly, companies are looking to Near Field Communication (NFC) to provide robust anti-counterfeiting protection. NFC has been a fundamental part of our lives for over 20 years. While the technology’s use cases have exploded in this time, enriching the customer experience of countless ecosystems, its original purpose remains its flagship functionality – a data carrying and exchange protocol.

Many products already carry an NFC chip within them for other use cases, such as payment, device pairing or even access control. Data on the legitimacy of a product can easily be added to these existing NFC tags to provide additional functionality – helping companies protect their products, reputation and even improve their sustainability practices.

Use Case: Sustainability

The Digital Product Passport (DPP) is an initiative that is essential in achieving a circular economy which can effectively operate at scale. The European Union is beginning to mandate the DPP across various industries in the next few years, with the goal of creating a digital record that provides comprehensive product data throughout its entire lifecycle.

NFC technology is a key enabler of the DPP. It is familiar to businesses and consumers, and NFC tags are also incredibly robust, have a strong attachment rate and are hard to deface. With a transparent and accessible chain of custody throughout a product’s entire lifecycle, companies and consumers can use the DPP to carry information that differentiates between authentic and counterfeit products. In this way, efforts made to drive sustainability can also help to create an indelible record of a product’s authenticity.

Use case: Healthcare

Product authenticity is also a mounting concern within healthcare – encompassing pharmaceutical companies and medical device manufacturers. Recently, the World Health Organization (WHO) issued a warning about counterfeit Ozempic injections, after the United States Food and Drug Administration (FDA) seized thousands of counterfeit units of the popular diabetes drug. An illegitimate batch of a medicine that leads to patient complications could be catastrophic for a brand’s image and, more importantly, the health of the patient themselves.

NFC tags can be embedded in the packaging of medical supplies, such as medicine, vaccines, or drug samples and equipped with a tamper detection feature. This allows end users to see if the data written onto the tag has ever been edited throughout its entire lifespan, providing crucial protection for pharmaceutical brands as the integrity of their product and its composite ingredients can be verified to guarantee patient safety.

Use Case: Luxury

Global luxury brands lose millions of dollars each year in sales, but it isn’t just the loss of revenue that can impact these companies. A luxury product by its very definition trades on a brand’s reputation, exclusivity and its perceived higher quality. The status that comes with owning these products can be lost if countless replicas flood the market, especially if they are poorly made or even faulty.

Many luxury products already have NFC tags embedded – such as high-end watches or cars – which companies can use to store additional data that verifies their product’s authenticity.

NFC: A ubiquitous solution

NFC tags are already built into products across various industries – including those mentioned above. Additional data can be added to these tags, enabling quick and easy validation of a product’s authenticity. With impending DPP legislation further extending the potential use cases for NFC, product managers can ensure they comply with new requirements while simultaneously authenticating products and improving their company’s sustainability practices for a greener tomorrow.

To ensure that NFC tags can reach their full potential, security, reliability and interoperability are crucial. NFC Forum is uniting stakeholders across the NFC ecosystem to create consensus-based technological standards that allow product managers to optimize the NFC functionality of their connected device across multiple use cases using just one tag.