Near Field Communication (NFC) is a short-range wireless technology that allows data exchange between devices that are 4 cm or closer. It uses magnetic field induction and operates at 13.56 MHz. NFC offers benefits like contactless payment and data sharing with just a touch. It works in both active mode with both devices powered and generating RF fields, and passive mode with one device powered and the other receiving power from the RF field to transmit data. This allows battery-powered devices like phones to communicate while conserving power.