An NFC tag is a small, unpowered chip that a phone reads by tapping within a few centimetres. Tags store a little data, such as a link or an identifier, and draw power from the reading device.
The longer version
An NFC tag is a tiny chip and antenna with no battery of its own. When a phone comes within the few centimetres NFC allows, the phone powers the tag and reads what it holds, often a web link, an identifier, or a short instruction. Tags are cheap enough to embed in posters, cards, and packaging.
Because a tag is passive and short range, reading one is a deliberate act. The phone has to be brought to the tag on purpose, which is the same close gesture as a contactless tap. This makes tags reliable for intentional interactions and poorly suited to sensing presence at a distance.
An NFC tag is a special short range case of the wider RFID family. Where RFID readers can pick up tags across metres, an NFC tag is tuned for contact, so it trades range for a simple, unmistakable tap.
The Parousya method
An NFC tag marks a point that a phone reads on a deliberate tap. The Parousya method works the other way, sensing the payer's presence without a tap and resolving the nearest pairing on a server.