NFC – near field communications – is just an implementation of the RFID – radio frequency identification technology.
The short version is that you have a reader and you have a tag. The tag contains a very small microchip and an antenna.
The reader is constantly emitting a low-power electromagnetic field. When the tag is placed inside this field, it used some of that energy to power up the microchip. The microchip then sends a code out of the antenna, which the reader reads.
The reader then passes this code along to another computer system that does _something_ with it, depending on what the code is. If it is a credit card reader, for example, it will pass on your credit card information for the transaction. If it is an access badge, it will pass along your ID so the security system can decide whether or not to open the door.
Edit: So I love the fact that we have three completely different answers here, all of which are 100% correct explanations of “NFC”
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