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Radio Frequency Identification (RFID)

What is RFID technology?

RFID is a general term that is used to describe a system that transmits the identity (in the form of a unique serial number) of an object wirelessly, using radio waves. This is sometimes referred to as contactless technology and a typical RFID system is made up of three components - tags, readers and the host computer system:

  • Tags
    An RFID tag is a tiny radio device that is also referred to as a transponder, smart tag, smart label or radio barcode. The tag comprises of a simple silicon microchip (typically less than half a millimetre in size) attached to a small flat aerial and mounted on a substrate. The whole device can then be encapsulated in different materials (such as plastic) dependent upon its intended usage. The finished tag can be attached to an object, typically an item, box or pallet and read remotely to ascertain its identity, position or state
  • Readers
    The reader, sometimes called an interrogator or scanner, sends and receives RF data to and from the tag via antennas. A reader may have multiple antennas that are responsible for sending and receiving radio waves
  • Host Computer
    The data acquired by the readers is then passed to a host computer, which may run specialist RFID software or middleware to filter the data and route it to the correct application, to be processed into useful information

Automatic identification (Auto-ID) technologies

RFID technologies are grouped under the more generic Automatic Identification (Auto-ID) technologies. Examples of other Auto-ID technologies include smartcards and barcodes. RFID is often positioned as next generation barcoding because of its obvious advantages over barcodes. However, in many environments it is likely to co-exist with the barcode for a long time.

The barcode labels that triggered a revolution in identification systems back in the 1970's are now cheap and commonly used, but have several limitations:

  • low storage capacity
  • they only represent a series of items and not an individual or unique item
  • durability (as mostly printed paper)
  • low read range
  • they can only be read when line of sight is established
  • they can only be read one at a time
  • they cannot be written to or reprogrammed

Rather than using light to collect or read a number from a bar code, radio waves are used to read a number from the RFID tag. RFID therefore does not need line-of-sight to operate. Using radio means that the tag no longer has to be visible on the object to which it is attached; the tag can be hidden inside the item or box that is to be identified and still be read. This minimises or eliminates the need for a person to have to present the reader to the tag as it can now be fixed to a wall for example. As the item is passed by the reader it will be read automatically, thus giving a potentially large saving in labour costs or substantial increase in throughput of scanned items.

Another feature of RFID is the ability to read many tags together at once. It is not necessary to present each tag to the reader separately (as is required for barcodes), instead all tags within the range of the reader can be read almost simultaneously as they pass the reader. Again, there is a huge savings potential in not having to manually present the reader to each item to be identified.

Furthermore, data can also be written to the tag, a feature not possible with barcodes. This latter feature has tremendous implications for IT systems and the potential benefits of RFID.

Different types of RFID

There are several versions of RFID that operate at different radio frequencies. The choice of frequency is dependent on the business requirements and read environment - it is not a technology where 'one size fits all' applications.

Three primary frequency bands are being used for RFID:

  • Low Frequency (125/134KHz)
    Most commonly used for access control, animal tracking and asset tracking
  • High Frequency (13.56 MHz)
    Used where medium data rate and read ranges up to about 1.5 meters are acceptable. This frequency also has the advantage of not being susceptible to interference from the presence of water or metals
  • Ultra High Frequency (850 MHz to 950 MHz)
    Offers the longest read ranges of up to approximately 3 meters and high reading speeds

Applications for RFID within the supply chain can be found at multiple frequencies and different RFID solutions may be required to meet the varying needs of the marketplace.

Since UHF (Ultra High Frequency) has the range to cover portals and dock-doors it is gaining industry support as the choice frequency for inventory tracking applications including pallets and cases.

RFID tags are further broken down into two categories:

  • Active RFID Tags
    These tags are battery powered. They broadcast a signal to the reader and can transmit over the greatest distances (100+ meters). Typically, they can cost £5 - £20 or more and are used to track high value goods like vehicles and large containers of goods. Shipboard containers are a good example of an active RFID tag application
  • Passive RFID Tags
    These tags do not contain a battery. Instead, they draw their power from the radio wave transmitted by the reader. The reader transmits a low power radio signal through its antenna to the tag, which in turn receives it through its own antenna to power the integrated circuit (chip). The tag will briefly converse with the reader for verification and the exchange of data. As a result, passive tags can transmit information over shorter distances (typically 3 meters or less) than active tags. They have a smaller memory capacity and are considerably lower in cost (less than £1) making them ideal for tracking lower cost items

There are two basic types of chips available on RFID tags:

  • Read-Only Chips
    These are programmed with unique information stored on them during the manufacturing process - often referred to as a 'number plate' application. The information on read-only chips can not be changed
  • Read-Write Chips
    The user can add information to the tag or write over existing information when the tag is within range of the reader. Read-Write chips are more expensive that Read-Only chips. Applications for these may include field service maintenance or ‘item attendant data’ - where a maintenance record associated with a mechanical component is stored and updated on a tag attached to the component. Another method used is something called a "WORM" chip (Write-Once Read-Many). It can be written once and then becomes "Read Only" afterwards.

Application areas for RFID

Applications fall into two principal categories: firstly, short range applications where the reader and tag must be in close proximity (such as in access control) and secondly, medium to long application, where the distance may be greater (such as reading across a distribution centre dock door).

RFID technology is already well established in a number of areas such as electronic payment, supply chain management and livestock tracking, as well as previously unforeseen areas, such as data conveying.

Electronic payment
Around the world, smart cards based on RFID technology are becoming more common in transport. Hong Kong introduced the ‘Octopus’ system in 1997, which is now used by over 95% of the population. The Oyster card, a Transport for London (TfL) contactless ticketing scheme, is a smart card. TfL estimates that 1 million fewer transactions per week are made at ticket offices and that there is a 30% improvement in the speed of passengers passing through the ticket gates. It is more difficult to copy Oyster cards than the magnetic stripe cards and, as each card contains a unique ID number, it can be immediately cancelled if the card is reported lost or stolen.

Supply chain management
Large retail companies are driving for widespread adoption of RFID tagging as a way of achieving complete supply chain visibility. They see such technology as a way of preventing ‘out-of-stock’ occurrences, the overstocking of products in warehouses, and the theft or loss of goods, all of which are highly costly to retailers. For instance, the total cost of crime, including crime prevention, for UK retailers was £2.25 billion in 2002 (British Retail Consortium, 2003).

Marks & Spencer (M&S) tagged 3.5 million returnable food produce delivery trays in 2002. This is among the largest supply chain operations involving RFID in the world. The tagged trays are filled with individual food items at the supplier, carried by the distributor to the shop, emptied and then returned. The information on the tagged trays is read at each distribution point, resulting in improved food delivery logistics and fresher food in stores.

Animal tracking
Most applications of animal tagging are in livestock tracking. This is becoming increasingly important following BSE outbreaks across the world. A mandatory RFID-based scheme was implemented in Australia in 2002 and a similar scheme is being set up in Europe.

Data conveying in hostile environments
Obtaining information from oil wells is problematic because of the high temperatures and pressures and the narrow diameter and large depth of wells. Generally, a hydraulic line is used to convey messages to equipment in the well, but this is difficult and costly, especially if the line breaks. RFID tags can be dropped into the well to convey messages to equipment, for example to change the position of a valve. As worldwide oil reserves deplete, accurate and efficient methods of conveying data to and from the bottom of oil wells are increasingly important.

Future application areas for RFID

Retail, healthcare and commercial services industries are predicted to be the fastest-growing RFID sectors. In addition, some novel applications have been proposed, including ‘smart’ washing machines which alert users to mismatched clothing and ‘smart’ fridges capable of warning when perishable goods are kept at the wrong temperature.

There is a large field of applications when it comes to medical services for people with additional needs. Even the tracking of criminals on parole from prison is imaginable.

Preventing counterfeit drugs
The World Health Organisation estimates that up to 10% of medicines worldwide may be counterfeit. An initiative planned for the autumn of 2004 by PA Consulting Group to tag pharmaceuticals, involved a number of pharmacies, hospitals and dispensing doctors across the UK. Drug packaging was to be tagged by the manufacturer and the product authenticated at the dispensing stage. This would also allow for an extra check on the expiry date, whether the batch had been subject to a recall and up-to-date changes in product information. This trial aimed to show how the tagging of pharmaceuticals could not only stop counterfeits and other fraudulently supplied products reaching patients, but also reduce dispensing errors.

Individual consumer product tagging
Retailers are already looking at the tagging of individual products to allow for better control of product recalls and better targeted marketing campaigns. Tesco undertook a RFID trial at one store in 2003, which involved tagging individual DVDs. RFID readers were built into the store shelves to monitor each item. Not only was the stockroom alerted when a shelf needed re-stocking, but staff were alerted when browsing customers replaced a DVD in the wrong section. Tesco report that this improved stock visibility and customer service.

Government initiatives
Government has focused on trials of RFID technology to reduce crime and to improve retail supply chain efficiency. The Chipping of Goods initiative was launched in March 2000 for 4 years. £5.5 million was allocated by the Home Office and was more than matched by industry to establish 8 ‘demonstrator projects’. The aim of these was to illustrate the effectiveness of tagged goods in combating crime and also to accelerate the uptake of RFID-based systems. For instance, the ‘laptop demonstrator project’, which was a collaboration between Dell and BT, showed that RFID tags located in a Dell laptop could help to reduce laptop theft. In the first year no tagged laptops were stolen.

The Next Wave Technologies and Markets Programme, was launched in 2001 by the Department of Trade and Industry (DTI). The ‘Centre for Information on the Move Systems’ is part of this programme and it's focus is on researching, developing and demonstrating information systems for linking inventory, vehicles, assets and people either in fixed locations or ‘on the move’ and aims to provide opportunities for industry and academia to collaborate. 

Current and future trends

Current trends indicate that the RFID market will grow fast in the next 10 years. With 1.02 billion tags sold in 2006, the value of the market, including hardware, systems and services, is expected to increase by a factor of six between 2007 and 2017.

Business applications using RFID such as transport and logistics, access control, real time location, supply chain management, manufacturing and processing, agriculture, medicine and pharmaceuticals, are expected to grow strongly. But RFID devices will also influence Government (e.g. eGovernment, national defence and security), and consumer sectors (e.g. personal safety, sports and leisure, smart homes and smart cities). RFID and bar codes will coexist for many years, although the former technology is likely to gradually replace the latter in some sectors.

The widespread item-level tagging of products, though not imminent, is likely to progress as costs go down, standards for RFID frequency and power are defined, end-user knowledge about how the technology works improves and technical hitches (such as reader accuracy and interference from external substances) are overcome.

Privacy concerns

Originally, RFID tags were used in closed systems, such as in the supply chain of individual companies. However, as the cost of tags decreases and worldwide industry accepted standards become available, individual item tagging will become more widespread. This has led some consumer (Cap Gemini Ernst & Young, 2004) and civil liberties groups to raise privacy issues. The main concerns are:

  • use of the data by a third party
  • an increase in targeted direct marketing
  • the ability to track individuals

Even if tags contain only a number and not personal data, they can still be linked to personal information, e.g. through the use of loyalty cards. Privacy groups argue that although linking personal data to products is already possible with bar codes, there is increased potential for direct marketing with item-level tagging, as consumers could be recognised on entering a store and their habits in-store monitored.

Technologists state that tracking of individuals through RFID is difficult because of the large amount of power that would be required to read RFID tags at a distance. The statutory limitations on power are fixed on safety grounds. However, privacy groups point out that technological developments may increase the potential for privacy infringements in the future, for example, by placing readers in floor tiles or in mobile phones. It is unclear whether legislation, such as the Human Rights Act, would protect individual privacy in these cases.

Technological solutions
Technological solutions, for example metal shields, blocker tags and ‘blowing’ of fusible links in the tag (which would render it inoperative), may help to mitigate concerns over privacy. However, these solutions are not user verifiable; that is, individuals are unaware whether RFID tags in their possession are disabled or unreadable. Privacy groups fear that these solutions would create a two tier society: the technologically aware and unaware. They prefer user-verifiable solutions, such as removing the tags at the checkout.

Legislation versus self-regulation
If RFID tags are used to link items to personal data, then they are subject to the Data Protection Act, as is the case with bar codes. To collect these data, retailers must obtain written consent from the consumer. The Information Commissioner's Office (ICO) is aware of some applications that may involve personal data, such as the TfL Oyster card, and they are ‘not aware of any retail applications that currently involve the use of personal data’. The ICO is keeping ‘a watching brief’ and is collaborating with colleagues in the European data protection and privacy fields.

The DTI is not currently pursuing additional legislation or regulation. It favours self-regulation, but states that it is ‘constantly checking regulation as the technology emerges and develops’, and that if there is evidence of infringement of the Data Protection Act it will pursue legislation or regulation to control the use of RFID technology. Various initiatives are underway within industry to address privacy concerns. However, many consumer and civil liberties groups are skeptical about the effectiveness of self-regulation.

A voluntary moratorium?
Over 40 organisations have signed a position statement (November 2003) requesting that manufacturers and retailers ‘agree to a voluntary moratorium on the item-level RFID tagging of consumer items until a formal technology assessment process involving all stakeholders, including consumers, can take place’ (Privacy Rights Clearinghouse, 2003). Although this statement identifies acceptable uses of RFID technology, e.g. the tracking of pharmaceuticals, it recommends that some practices, such as the tracking of individuals, should be prohibited.

Public awareness
In spite of privacy concerns, surveys indicate that the majority of the population is still unfamiliar with RFID technology. For example, an online survey of 1,000 consumers showed that less than 25% of North American consumers have heard of it (Cap Gemini Ernst & Young, 2004).

Most respondents were unaware that existing RFID applications, such as US highway toll devices, already used RFID technology. The National Consumer Council (NCC, an independent consumer policy organisation) has stated that ‘consumers were not aware of RFID technology and certainly did not understand the extent to which their privacy may be jeopardised by its use’ (National Consumer Council, 2004). Following a recent NCC summit on RFID, several recommendations were made, including calls for the DTI to fund research into consumer perceptions.

Measures taken by industry to address privacy concerns

  • e.centre is leading a UK RFID council in drawing up a UK code-of-conduct for the industry. This will involve discussions between industry, government and consumer organisations. The code of conduct will include notifying consumers of the presence of RFID tags, education about the technology and adherence to current laws on the collection and storing of data
  • When M&S undertook a trial involving tagging individual items of clothing for stock-taking purposes, there was no possibility that any customer data could be associated with the tags because M&S avoided reading the tags at the checkout. As the tags are incorporated into paper labels they can be easily removed at the checkout if requested by the customer.


With so much trade being conducted globally, standards and regulations are important to ensure safety and the interoperability of tags and readers across national boundaries and between trading partners. A common misunderstanding is that RFID is regulated by one trade body - however, it is in fact influenced by a number of official bodies for different aspects:

  • Frequencies, power levels and operating cycles are regulated in Europe by the European Telecommunications Standards Institute (ETSI).
  • Protocols for communication between tags and readers are proposed by a number of bodies and equipment manufacturers. The two most prominent organisations for setting standards are the International Standards Organisation (ISO) and EPCglobal.
  • EPCglobal is leading the development of industry-driven standards for the Electronic Product Code (EPC) to support the use of RFID in supply chain applications. This is to ensure that data created in one place can be read and interpreted anywhere in the global supply chain. EPCglobal is part of GS1 which also manages the UCC-EAN system responsible for standardising barcodes, so they are well placed to develop, manage, promote and deploy the EPC standard.

Further information


The information contained in this section was taken from the following sources:


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