Of late, there has been a lot of talk about the advent of NFC. In CES this year, a handful of NFC-enabled smartphones were launched and created quite a buzz. And why not? After all it's a nascent technology that has the potential to make the habit of carrying around USB cables, hotel keys, credit cards and even petty cash in your wallet, redundant. We tell you what NFC is and all that it can do in the simplest way possible.

What is NFC?

Near Field Communication (NFC) is just another way to transfer data or media from one device to another wirelessly. Just like Bluetooth, you ask? Well, not exactly. NFC works on something called “inductive coupling”, which involves creating an electrical field for data transfer between two devices. To put it simply, any two devices only need to be ‘tapped together' for them to connect via NFC.

On smartphones

NFC contributes towards eliminating the ‘traditional' methods of data transfer such as via a USB cable or through Bluetooth. NFC makes it easy for your phone to instantly connect and interact with other phones, devices and interactive tags.

Suppose I have an NFC-enabled smartphone like the Samsung Galaxy Nexus or the Huawei Sonic. Whenever I want to share my pictures or exchange business cards with someone else (who has an NFC-enabled smartphone) I can do so by just tapping my phone with his/hers. How simple is that!

The technology itself was patented almost two decades ago. But it still has a long way to go before it gathers full steam. And once it does, the possibilities are endless. Not only could you tap the latest movie poster to watch its trailer on your smartphone but also book your first-day-first-show tickets with one simple touch.

Money matters

One of the basic premises of NFC technology is that it can be established only for short-range communication. This means that the devices have to come into contact for NFC to be enabled. This fundamental trait enables the tech to be used for e-commerce and contactless payment options. To carry out a transaction you'll have to be physically present at the NFC-sensor that accepts payments. This reduces the chances of your contactless card being misused, as has been the case with net banking and sometimes even your usual card swipes.

While this will take some time to become mainstream, companies like Intuit, have already come up with solutions where you can swipe your credit card directly on to a smartphone for a mobile transaction. At CES 2012, the Intuit re-imagined its GoPayment mobile credit card processing application (shown on cover) using near field communications with a concept device

One might ask what happens if your smartphone gets flicked with all your card details stored in it. Well, to prevent misuse in case you lose your device, it's always better to have an extra layer of security on. Protect your contactless payment features with an extra password or a gesture recognition app so that no one but you can access them at any given point of time.

Companies like American Express, MasterCard, and Visa have already welcomed transactions with contactless cards in the US. Other countries have launched projects, mostly in local transport, where people tap their subway cards to enter the station or pay for their tickets. You know that a tech is here to stay when it can be put to use in areas as simple as a bus pass or a parking ticket as well as be involved in financial transactions.

NFC versus Bluetooth

As you will read in the reviews that follow, some of the NFC-enabled media accessories also feature Bluetooth. The two might function similarly – both are wireless technologies and operate in close proximity. However, the range of a Bluetooth connection outdoes that of the NFC. While you can pair a Bluetooth headset and walk about 20-30 metres away from your handset while still on a call, your NFC device is restricted in a virtual 10 cm radius around the device it's paired up with.

NFC, however, makes up for this shortcoming by taking minimal time to pair, just under a second or two. Bluetooth pairing can take up to 15-20 seconds or so depending on the devices being paired.

As far as security is concerned, Bluetooth has an upper hand because data transfer on Bluetooth is heavily encrypted. A stolen NFC device can prove to be an immense risk if you don't have proper security in place.

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