What is NFC (Near-Field Communication)

NFC, or near-field communication, is a variant of RFID, or radio frequency identification. It is an ultra short-range wireless technology that allows communication and data exchange between two devices held in tight proximity - about 4 cm apart.
NFC-enabled smartphones have the potential to replace credit cards. This is because NFC phones pack a smart chip - a complex 80-character code that is really hard to crack. Such a device can safely store confidential credit card details and be handy for purchases on the go.
Frost & Sullivan predicts the technology will revolutionise e-commerce and drive over $150 billion worth of transactions by 2015, bulk of which is expected to be powered by NFC phones.
NFC can be deployed in ticketing services, rural banking, interactive and targeted advertising, healthcare, hospitality, libraries and pharmacies. In fact, an NFC phone could become the single-key to access to your car, home and office.
How NFC works...
Any device, a cellphone, a camera or a watch, can be equipped with an NFC 'initiator', which is simply an antenna that can store data. If the device is an NFC smartphone, the 'initiator' and 'target' (an NFC reader) need to be up close for data exchange to happen.

The 'reader' is attached to a point-of-sale (PoS) terminal or cash-register in a retail store that accepts NFC payments. A simple wave of the phone can pay for a purchase. Alternatively, two NFC phones can be tapped lightly to exchange business cards.
Geeks claim that in standby mode, a well-designed NFC solution does not consume any power. And since transactions happen in seconds, the power drain is not huge.
Globally, NFC adoption is picking up via smartphones. RIM, Nokia, Samsung and HTC have unveiled NFC smartphones. Apple iPhone5 is tipped to support NFC too. Google Wallet - a mobile payments technology that can be downloaded on some US mobile networks - is growing the NFC ecosystem. Payment trials have also begun in Australia, Singapore and China.
NFC in India
The technology is still in its infancy here. As of now, Reserve Bank of India does not recognise NFC mobile payment transactions and PoS terminals accepting NFC payments don't exist. But NFC-enabled phones like Apple's iPhone 4, BlackBerry's Touch Bold 9900 and Curve 9360, Samsung's Nexus S and Galaxy S II and Nokia's C7, 700, 701 and 600 are available. For NFC to take off, RBI has to frame norms and banks, carriers, credit card companies, apps developers and PoS terminal makers have to team up.
But awareness levels are growing and NFC is making some waves in entertainment. Shah Rukh Khan starrer Ra.One was the first movie to be marketed by Nokia using NFC technology. Armed with an NFC phone, you can download the movie content by merely tapping the device on a NFC-tagged movie poster at a Nokia priority outlet or a partner multiplex.
Different from Bluetooth...
Bluetooth is also a short-range high frequency wireless technology but one that allows interaction between communication devices as much as 10 meters apart.