RFID – what does it mean for you?

I keep hearing about RFID, and that it’s a useful business tool. What is it?
RFID is short for Radio Frequency Identification. It’s the technology used in Oyster cards, entry systems in
secure buildings and for tags on goods. Basically, its job is to tracks things.
How does it do that?
It’s a wireless automatic tracking system that uses radio waves transmitted from a small tag which passes
data to your computer system.
Sounds useful.
London Transport uses it for Oyster cards to help track its flow of traffic and customer sales, and large
companies such as Tesco and Wal-Mart use it to track the movement and sales of goods. But many other
businesses are also starting to invest in it.
It’s catching on then. I’d like to know more…

---

What are the main components of RFID?
There are two elements. The first one is a tag or card containing a silicon chip and small radio antenna.
The other one is the readers that scan and communicate with the tags and pass the data to a computer.
So when a traveller swipes his Oyster card, it’s scanned by equipment in the turnstile, which relays the time, place, and account balance to the central computer?
That’s right. In the same way manufactured goods in a factory will be tracked as they go through various
processes or are sent to a different place.
Barcodes revolutionised the way we shopped in supermarkets in the 1980s, so how does RFID compare?
It is a different technology doing something similar – but yes, it’s likely to replace barcodes eventually. The
key difference is that instead of displaying and reading a visual code, RFID tags are chips that can be
incredibly small (some are a third of a millimetre wide) and transmit a radio signal. When the chip receives
a radio enquiry from a reader, it transmits a unique code, perhaps a 128-bit number to the reader. Tags are
also tough – they can’t be de-magnetised, or made ineffective by water.
That’s impressive. Is the scanning faster and easier, too?
Yes. It’s a much more efficient way of gathering information about what and where everything is. It’s already
being used in many other kinds of industries. For example, radio-tagging is the next big thing being used
by Delta airlines in America.
Sounds like the future is bright then, but are there any disadvantages?
Yes. For a start, it’s a new technology, so not fully established, and it’s quite expensive. A single tag could
cost up to 50p, though prices are coming down.
I see. That could add up to an awful lot of 50ps.
But it is going to revolutionise the way many businesses work. For many it’s just a matter of choosing
when, not whether to use it. Visa is in the process of combining smart cards and RFID chips so that
customers can conduct completely non-cash sales, even when buying a newspaper or paying into a
parking meter. Supermarkets are also investing in ‘smart shelves’ to monitor goods.
I can see how cost-efficient that would make retail businesses, but how about the initial investment?
That is high, but if you can get a good return, it’s worth it. That’s why businesses should make sure they get
good, impartial advice about tuning RFID to their needs, when they are considering the benefits.
But apart from knowing where goods are in the factory, or what time employees clock in, how else could RFID give good return on investment?
Even in a small business such as a café, RFID ensures customers get the right sandwich, cuts down
on staffing and time costs, but also the data gathered about orders can provide a bigger picture. By
analysing what and when customers buy, you can save, invest and gain advantage over competitors.
That’s worth thinking about. What else should I consider?
There’s currently no legislation about having to indicate the presence of RFID tags in goods. For example,
Michelin manufacture 800,000 tyres a day, and are putting tags in all new ones. That means they can track
the whereabouts of every tyre in every car. This is priceless business information, is great for
crime-fighting, but also means that customers’ movements could theoretically be tracked. This is a
freedom of information issue.
So with RFID, it’s theoretically possible to track the whereabouts of every product, and who has bought it. And cash will be the only anonymous way to make purchases?
Not for long! The European Central Bank is placing tags in Euros to combat crime and money laundering.
But taking RFID a stage further, it’s even possible to put tags on people. The Veritag, for example can
be placed under the human skin, and is being considered to keep track of hospital patients, or possibly
even children!
Now that’s an amusing, but slightly scary thought. It looks like RFID isn’t just changing the way we will do business but our lives too…

Links
RFID: 5 things small businesses should know about it
RFID Chips Are Here


Want to find out more about the emergence of RFID technology? Click here for more information.


Also in this issue: Disposing of old equipment and Wi-Fi – the dangers