NFC is a wireless data transmission technology that enables the exchange of uniquely identifiable data with receivers over a distance of a few centimeters. In theory, NFC can be used for things like tapping two phones together to exchange contact information or to slowly transfer files, said Jack Gold, principal analyst at J. Gold Associates.
"Mostly it is being used for payment systems, with a special NFC reader device attached to a cash register or other retail kiosks," Gold said. NFC can safely encrypt communications from the phone to the reader at the store location, but there are ongoing concerns about the encryption being broken.
NFC will ultimately make its way into tablets, "smart" portable devices and even wearable devices, Gold said. NFC is more advanced than technologies like RFID with two-way communication capabilities, interactive approvals and the ability to enable payments through mobile applications, Gold said.
A hindrance to wide use of NFC is the need to upgrade the infrastructure with new readers at payment terminals or kiosks, which is not a cheap undertaking, Gold said. Applications on mobile devices will also define NFC functionality, so the full scope of the technology has yet to be explored.
NFC in smartphone cases