Near Field Communication (NFC) is a wireless/radio-frequency technology that works over short-range. This involves communicating data between devices(“initiator” and “target”) in close proximty normally requiring less than 10 centimeters. In the realm of mobile phones, the “initiator” is the mobile handset and the target is typically a RFID(Radio Frequency Identification) Tag for passive communication. To understand it; RFID Tags, for passive communication can be thought as QR/barcodes and the smartphone as a “reader”. But with NFC it is also possible to have an “active” communication, which requires powered RFID Tags enabling peer-to-peer communication between itself and the NFC-enabled device, similar to Bluetooth.
Now this technology opens up a realm of possibilities, from reading messages from RFID Smart-Posters, using the mobile phone as keys, to mobile payment services, in which your smart phone becomes your smart wallet making your phone serve as a credit card or, depending on the payment model, charge a credit card with an embedded RFID Tag. This technology is still new but is being widely adopted by smart phone hardware & software vendors; and Android 2.3 has already provided a high-level API to write NFC applications. Google’s Nexus-S is now available in most countries, with built-in NFC support, which enables Nexus-S to read RFID Tags; iPhone 5 & iPad 2 will also be launched with NFC chips. And soon as this technology is well understood, fully standardized with the security issues resolved, we will see it being adopted by more and more companies and financial institutions.