The Near-Field Communication (NFC) API in Android 2.3, accompanying the release of an NFC hardware feature in Google's Nexus S, is meant to send and receive small amounts of data. This data can be read from passive (non-powered) devices (e.g. credit cards or interactive posters), or active devices (e.g. payment kiosks). NFC can also be used to communicate between two NFC-equipped devices thanks to a protocol introduced by Google which defines a way for two active devices to exchange NFC messages that follow NFC Data Exchange Format (NDEF) specification. This protocol (NDEF Push Protocol (NPP)) is implemented in Android 2.3.3 and beyond.
"The NPP is very simple: it allows us to send an NDEF message to another device, which'll then process the message as if it had been read from a passive tag. Thus, to understand how to use NPP, we need only to understand the NDEF message. An NDEF message is a collection of NDEF records. An NDEF record is a short header describing the contents of the record's data payload, and then the data payload," said Jason LeBrun, Senior Android Engineer at doubleTwist.
"This new NFC/NPP capability enables the exchange of a few hundred bytes of information in a well-defined format between devices, using proximity as a method for instigation and authentication. In other words, we can now share a small amount of data between two devices without going through the normal steps of pairing or association that are required by more conventional (and higher-bandwidth) avenues like Bluetooth or WiFi--the fact that the two phones are in close proximity is enough evidence to convince the NFC software that the devices are eligible to receive information from each other."
"The NFC API for Android handles all of the details of receiving and parsing NFC messages. It then decides what to do with the message by investigating the intent filters registered for applications on the device. In some cases the messages may have characteristics that can lead to finer-grained dispatching. In the case of an NDEF message, you can register for NFC messages at varying levels of detail: from as vague as any NDEF message to as detailed as an NDEF message containing a URI matching a given pattern. A pleasant result of this approach is that the operating system can have "catch-all" applications for messages that have unknown details," explains LeBrun.
[Source: Google Code blog]