We've been taking a look this week at Nokia's involvement in some of the exciting mobile innovations set to emerge over the next few years, and today we look at a technology that is taking off as we speak: Near Field Communication – or NFC. Join us after the cut for more.

NFC is one of those technologies that's been bubbling under for a while now, but finally looks set to hit the big time in 2011 and beyond. Simply put, it allows the short-range wireless transfer of small amounts of data between two NFC-enabled devices.

While other wireless standards such as Bluetooth or Wi-Fi are judged by how far they can transmit data, NFC's strength is just the opposite: with data only capable of travelling a very short distance, you have none of the security concerns faced by other wireless standards.

We've already seen NFC being trialled by banks for making small payments via a card scanner that requires only for your card to be held nearby, but smartphones are the real key to unlocking NFC's potential, as they are capable of not just processing micro-payments, but much more besides. In terms of putting NFC tech inside mobile phones, Nokia has arguably done more than any other mobile manufacturer to push the technology forwards.

Back in 2005, it introduced an NFC-capable back cover for the Nokia 3220, then in 2007 launched its first fully NFC-enabled phone, the Nokia 6131 NFC. The Nokia 6212 classic also got the NFC treatment, while the Nokia C7 has been lined up as the first of the current generation of Nokia smartphones to receive a new wave of NFC services – more on that shortly.

Also read: Nokia and Proxama team up for NFC on Nokia C7

But NFC's development is about more than just phones capable of handling the data transactions, and it's here where the technology has struggled to get off the ground. The very nature of NFC requires two devices to be in place – your NFC-enabled phone and something for it to connect with, be it a payment scanner, a T-shirt or even a movie poster.

On top of that, your service provider needs to be involved too, especially if you're talking about handling micro-payments. So despite having had NFC-capable phones on the market for years now, Nokia has largely been held back while the rest of the technology world puts its own part of the NFC puzzle in place. But things now look like they're finally moving forward in a meaningful way.

The card payment trials we mentioned earlier have put in place a growing infrastructure of NFC-enabled payment points, service providers have done a lot of work in getting NFC-capable SIM cards up and running, and there are a growing number of phones around ready and waiting to take advantage.

We knew last year already that the Nokia C7 had been chosen to take Nokia's NFC development forward, and last month we got the exciting news that NFC tech specialist Proxama had been lined up to deliver a complete NFC service package to the C Series flaghip, which covers everything from a rich network of advertising tags in posters, magazines and the like, along with software to help decode those tags on the Nokia C7.

It's the first step in a long and exciting road, and we've already been assured that other Nokia handsets will soon also be able to join the NFC revolution. So far the technology has only touched the tip of the iceberg, but you can be sure Nokia will be on hand to help realise NFC's full potential.