How it Works

Using magnetic induction, a reader emits a small electric current which creates a magnetic field that in turn bridges the physical space between two devices. That field is received by a similar coil in the client device where it is turned back into electrical impulses to communicate data such as a credit card number or other such data.

Passive vs. Active

‘Passive’ NFC tags use the energy from the reader to encode their response, while ‘active’ tags have their own power source and respond to the reader using their own electromagnetic fields. You will find 'passive' style NFC in devices such as Bluetooth speakers, with 'active' style NFC being found in devices such as smartphones.

Security

When it comes to more sensitive data such as credit card numbers or passwords, some form encryption whether open-source or proprietary is to be expected on any NFC enabled payment system. Even then, an individual attempting to steal such credentials would need to be in very close proximity to do so.