It’s kind of controversial. Surveillance/privacy concerns vs. fairy limited end user benefits.
This thing here has nothing to do with privacy...
What about strangers at the airport loading your ID into their phones?
It doesn't work like that. A SmartCard is called SmartCard because it's actually smart. Much like an EMV transaction (pay using chip+pin, also most NFC transactions), the SmartCard doesn't just stupidly pass along the data that's stored on it, e.g. your name and birthdate and so on. This is the major difference to using a magstripe. The SmartCard is a small cryptographic processor (much like the SecureElement in an iPhone). It gets a request which it answers with a digitally signed reply.
Example (in a nutshell) based on an EMV transaction:
Terminal: "Please approve payment to Walmart with accountID12345678 in the amount of XXX. Date: xxx"
SmartCard: "I approve payment to Walmart with accountID12345678 in the amount of XXX. Date: xxx + digital signature"
In a secure environment the card will require the PIN to unlock the signing process.
As such it's impossible to copy a SmartCard, which essentially
prevents identity theft.
In comparison: a credit card swiped (or even when used per NFC in some cases) just sends out "My number is 1234 5678 9012 3456, Expiry 02/20, owner: John Doe". Stealing this information is of course very easy...
(If the terminal expects this plaintext reply but the NFC card is set to only reply with a SmartCard-style digitally signed reply, it will reject the transaction. This is one of a few reasons why some European credit cards don't work with old NFC terminals, which are quite common in the US.)
So where are the safeguards against digital identity theft?
Using NFC scanners to steal information has been a real threat for at least two decades.
NFC is just the technology to transmit data (like ethernet or WiFi). If your NFC card is just a dumb tag, that sends out a userID (or credit card number), it's insecure as that data can just be copied to another card that sends exactly the same reply.
If the card instead sends one-time passwords, that's more secure, but if OTP is intercepted & re-used in real time, it's not acceptable for high security.
If the card performs a cryptographic process (actual SmartCard) it can be programmed to require a PIN or other kind of approval mechanism. The digital signature as explained above will secure the transaction/login/...
If you don't even trust the reading terminals PIN pad (if PIN would be entered on a non-secure keyboard like on a laptop), best choice would be a card that has an embedded authentication mechanism, like this one:
https://directrm.com/da-pin-pad-smart-card/
Could someone please explain the use case? Why would I want to NFC-read my ID or that of someone else?
I’m clearly missing something here hmm
Yes, you do. These IDcards can proof your identity and age without human intervention and allow to sign documents electronically (properly, not some shady signing on the touchscreen).
Use case:
Signing of any kind document
Age verification (online)
ID provider (can be used to securely log on to websites without passwords)
In fact, an NFC+PIN SmartCard is the most secure way to log into anything. It would be the ultimate solution to get rid of stupid passwords while maintaining maximum possible security.
I recommend checking out YubiKey website as their device is practically a SmartCard in a different shape.