Hello @TomGeorge ,Excellent questions , and you got it right! . Distance has a profound effect on lower intensity flash , whereas for higher intensity flash distance has very negligible effect upto a limit of 25 cms and for no flash , distance has no effect.
Now what is the solution to this? I fixed the distance! I keep the transmitter on-top or very close , within 3 cms of the photodiode/receiver. So as the distance criterion is fixed , now when i flash a lower intensity flash i get a voltage of 2.5 v (thus 2.5 v is not a thing set by transmitter , but rather a result of the receiver when i keep the distance between Transmitter and photodiode fixed.) Similarly for a higher intensity flash 5v is the output that i get from the receiver .
Now my method can be classified as an NFC communication .