NFC (Near Field Communication) is a form of wireless, contactless communication which works at distances up to 4 or 5 centimetres. It allows data exchange between two NFC devices. It is based on electromagnetic radio fields, working at a frequency of 13.56 MHz. This technology derives from radio-frequency identification (RFID). In fact, NFC is believed to be a subset of RFID but being designed for working at shorter distances and with a specific set of standards governing its operation.
NFC enabled devices can be active or passive. Active devices can generate their own radio frequency field, whereas passive devices, such as NFC tags, need to use inductive coupling for data transmission. NFC devices can communicate in two different modes:

1. Active mode: the operation is conducted between two active devices. Both devices can generate their own fields. Both need power supplies.
2. Passive mode: one of the devices is active an the other one is passive. The active device provides a carrier field and the passive device answers by modulating the existing field. The passive device draws its operating power from the active provided electromagnetic field, so it does not need additional power supply.

One of the strengths of NFC is its short-range operation mode which makes it inherently more secure than other wireless technologies such as Bluetooth, which may be suitable for protecting user's information, acting as a first security measure.

Information from NFC Forum webpage, wikipedia,etc. Image from NFC Forum.