What is NFC and why is it in your phone?

NFC is now a household feature - but what can you do with it?

NFC in phones what you need to know

Update: Not to be outdone by Google Wallet, Apple has created its own contactless "tap to pay" mobile wallet in the form of Apple Pay, making NFC payments possible for millions of iPhone 6 owners. We've updated this article to address the big push of NFC technology in mobile phones and retailers that support NFC purchases in the US.

Your credit cards: gone. Bus pass and train tickets: vanished. Those dog-eared loyalty cards for high street coffee shops: binned.

You've been the victim not of theft, but of the future – a future where the wallet, purse, paper ticket and pocket have all gone digital and live solely on your phone.

Welcome to Near Field Communications (NFC), a contactless, Wi-Fi-lite style tech that could already be in your smartphone, and could soon be a regular feature of your commute.

How does NFC work?

At its core, all NFC is doing is identifying us, and our bank account, to a computer. The technology is simple. It's a short-range, low power wireless link evolved from radio-frequency identification (RFID) tech that can transfer small amounts of data between two devices held a few centimeters from each other.

Unlike Bluetooth, no pairing code is needed, and because it's very low power, no battery in the device being read. By tapping your phone on a contactless payment terminal in a shop, train station or coffee shop is able to identify your account (and even your personal preferences, shopping habits and even your most frequently travelled route home) and takes payment through an app on your phone.

Passive NFC 'tags' on posters, in shops and on trains could contain a web address, a discount voucher, a map or a bus timetable that passers-by could touch their phones on to receive – or to instantly pay for absolutely anything.

"The SIM card in your mobile phone is a smart card identifying your account to the network," says John Elliott, Head of Public Sector at Consult Hyperion, who's worked on the Oyster Card. "On NFC phones, the SIM is being extended to act as the Secure Element that can hold other apps such as payment cards."

Those with NFC smartphones on Orange can already pay n wave on Stagecoach buses
Those with NFC smartphones on Orange can already 'pay 'n' wave' on Stagecoach buses

Is NFC available in the UK?

NFC is starting to become established in the UK. Orange's QuickTap scheme allows purchases of £15 at 50,000 shops in the UK (including Pret a Manger, EAT, Little Chef, Wembley Arena, Subway, Wilkinson and McDonalds) just by tapping a phone, though only from NFC-enabled phones hosting an app that has been topped-up with credit from a Barclaycard, Barclays debit or Orange Credit Card.

"Feedback from our customers on the QuickTap NFC service has been extremely positive," an Orange spokesperson told us, "with their usage and average spend higher than expected." Orange is also running a trial of mobile ticketing with Stagecoach earlier this year and expect this to expand in 2013.

"As well as payments, customers have told us they expect their loyalty cards and vouchers to be included in Quick Tap so we are working with retailers to make that happen, following up on our Treats from EAT offer." In the latter, anyone with an NFC-compatible phone on the Orange network could tap their mobile phone on specially designed posters at any of EAT's 110 outlets to receive a free treat each day.

Meanwhile, Blackberry smartphones with NFC have been trialled as digital keys, using identification data to open secure access systems in office blocks and networks.

Is NFC available in the US?

NFC acceptance is still a mixed bag in the US. Whereas you won't find it in stores like Wal-Mart or Rite Aid, some other big retailers such as Whole Foods, Macy's, RadioShack, and Toys R Us, among several others, hope to set a tidal wave of support in motion for the technology.

Apple Pay

Released in 2011, Google Wallet was NFC's biggest push (until Apple Pay launched), allowing US Android users to pay using NFC technology. By linking their payment cards to to the Google Wallet app, users could pay at retailers, provided their registers were equipped to accept wireless payments.

Apple Pay released in October 2014, allowing iPhone 6 and iPhone 6 Plus users to pay using NFC at participating retailers. Prior to the launch of Apple Pay, the adoption of NFC-capable registers was climbing at a slow but steady pace. Now, with more retailers supporting NFC payments, it will only get better if you're determined to totally nix your wallet.