What does the acronym NFC mean in contactless bank-card payments?

In contactless bank-card payments, NFC means near-field communication.

NFC is a short-range wireless technology that lets compatible devices exchange information when they are brought close together. In a contactless card transaction, the card’s embedded chip and antenna communicate with a payment terminal over a very small distance.

The technology grew from radio-frequency identification and related contactless standards. Payment cards, smartphones, transit passes, and access badges can all use NFC-style short-range communication.

NFC does not itself approve a payment or move money between accounts. The payment network, issuer, and merchant’s acquiring system still handle authorization and settlement. The contactless interface simply provides the data link between the card or device and the terminal.