There are three basic uses for NFC. They include: Pairing, Sharing and Transactions.

Pairing, also called peer-to-peer is when two phones are brought within 2-4 cm and data is transferred between the two devices. The commercial of the Samsung Galaxy S3 is a great example of pairing.

Sharing, also called reader-writer, is when the a reader device (such as your phone) is brought within 2-4cm of a tag. A tag sits dormant until a reader device taps the tag, powering the tag and initiating a data transfer.

Transactions, also called card emulation, is a phrase popularized by Google Wallet. This allows you to load and store your banking information on your mobile device and then present it to your favorite merchant for payment.

This reduces the need to carry multiple credit cards, gift cards, insurance etc.

For more information, read this great article written by Matt Bolton at TechRadar–948410