LG Electronics has announced plans to launch an NFC mobile payment system in Europe in 2012, enabling consumers to pay for products and services using their smartphones. Near Field Communication (NFC) will be the dominant system for mobile phone payments by 2015 according to Frost and Sullivan.
Near field communication or NFC, is a short-range high frequency wireless communication technology which enables the exchange of data between devices over about a 10 centimeters (3.9 in) distance.
The technology is a simple extension of the ISO/IEC 14443 proximity-card standard (proximity card, RFID) that combines the interface of a smartcard and a reader into a single device. An NFC device can communicate with both existing ISO/IEC 14443 smartcards and readers, as well as with other NFC devices, and is thereby compatible with existing contactless infrastructure already in use for public transportation and payment. NFC is primarily aimed at usage in mobile phones.
Additional sources: Wikipedia