What Is NFC, and Why Does It Matter for the iPhone 6?

Apple’s iPhone 6 will reportedly be getting something called near-field communication, or NFC. The feature, which is already available on many Android and Windows Phone handsets, allows owners to wirelessly pay for items at checkout counters and pair the phone with other devices, among other cool things.

In fact, recent reports claim that Apple has signed deals with American Express, Visa, and MasterCard, which will turn the iPhone into a so-called “virtual wallet.” That capability will likely run through NFC.

What follows is a short explainer on what NFC is, how it works, and why you should care about it. So put your learnin’ caps on, and let’s get started.

OK, what is NFC?
NFC is a form of wireless communication that allows the flow of information between two devices. The technology, according to the NFC Forum, comes in three flavors: tag reader and writer, device to device, and card emulation.

Tag reading lets companies place small, inexpensive NFC-enabled tags on things such as movie posters that people can scan with their smartphones to do things like watch trailers. You could also, for example, tap your phone on an NFC-enabled coupon tag in a store to get special offers.

Device-to-device NFC communication lets your phone talk to another person’s phone so you can trade photos or videos. Device-to-device NFC can also be used to pair your phone with a wireless speaker or printer. And because NFC and Bluetooth are interoperable, you can use NFC to quickly pair your phone to a compatible Bluetooth device.

The biggest potential for NFC lies in card emulation. Using what’s called a secure element that randomly cycles security pins, you could use your NFC-equipped iPhone 6 to pay for your groceries by tapping the handset on a special pad at the checkout counter.

So why hasn’t Apple used NFC before?
Mobile wallets like Google Wallet and ISIS have been trying to jump-start the NFC payment craze for a while now, with little to no luck. Sure, it would be convenient to tap your phone to quickly pay for something and be on your way, but in order for that to happen, both your phone and the store you’re shopping in need to have NFC capabilities.

If your phone has NFC and the checkout counter doesn’t, then you can’t pay with your handset. It’s as simple as that.

What’s more, Apple’s Senior VP Phil Schiller told AllThingsD during a 2012 interview that the company didn’t see NFC as a solution to any specific consumer problems, adding that Apple’s Passbook met customer needs at the time.

Why the change of heart, then?
Since Schiller’s interview, Apple has been making headway in brick-and-mortar stores with its iBeacon technology. iBeacons are little gadgets that you can place anywhere and that can help your iPhone recognize your location in a shop and provide you with nearby sale items and specials.

What’s more, as Wired recently pointed out, Apple has more than 800 million credit cards on file from users’ iTunes accounts. And in January, Apple CEO Tim Cook even went so far as to say the company was “intrigued” with mobile payments.

According to The Information, Apple has also been in talks with major credit card companies about using a secure element in its phones for use with mobile payments. And recently Wired, tech blog Re/code, and Bloomberg all reported that credit card payment capability was coming to the next iPhone. 

What about Apple Passbook?
If you’re a Passbook user, you’ve got nothing to worry about. It’s likely that Apple’s NFC payment solution would tie into the company’s existing virtual wallet.

For the uninitiated, Passbook is an iOS app that allows you to store things like coupons, loyalty cards, airline tickets, and so on. It’s a nifty piece of software, though with the addition of NFC payments, it could become one of the iPhone’s best features.

How likely is NFC to be included with the iPhone 6?
Based on all the reports circulating about the feature, not to mention the above statements from Tim Cook and Apple’s discussions with credit card companies, it’s looking like the iPhone 6 will almost certainly include NFC.

What if I own an older iPhone?
Sorry, but you won’t be able to take advantage of the new credit card capabilities. Current iPhones don’t contain NFC technology, so they can’t take advantage of any new app or system that Apple may introduce. You’ll have to upgrade to an iPhone with NFC installed –– if Apple does, in fact, introduce one. 

Either way, we’ll find out for sure if you’ll start paying for things with your iPhone on Sept. 9, when Apple will unveil its iPhone 6. Stay tuned.

Email Daniel at dhowley@yahoo-inc.com; follow him on Twitter at @DanielHowley or on Google+ here.