In general, NFC allows suitably equipped phones to make ‘contactless’ payments for products and services, by holding the phone close to a reader terminal. The technology is actually much simpler than Bluetooth and very closely related to RFID (Radio Frequency Identification) technology. This is used in security tags, for protecting products in shops and RFID chips are embedded in travel cards (like London’s Oyster system). NFC has a very short range of around 20cm (Bluetooth devices typically communicate over distances of 5 – 10 metres) and unlike Bluetooth the amount of data that can be transferred to and from the NFC module in the phone is limited and tightly controlled.

As well as being able to make secure payments, NFC smart phones can also read RFID chips implanted in signs and posters, to tell the phone to go to a particular website to display relevant information. NFC phones can also exchange data with one other, for swapping virtual business cards and so on. It’s going to add little to the cost of a smart phone and should prove popular, but while there are some sophisticated security measures in place be prepared for the inevitable slew of privacy intrusion and lost or stolen phone horror stories.