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RFID Business Applications
Radio frequency identification can be used in many different ways to create value. Here are the most common ways businesses are using RFID today.
Metro in Germany and Tesco in the United Kingdom have done extensive testing to see if putting RFID tags on individual products in the store can will help them to reduce out of stocks. And Hewlett-Packard is tagging printers and electronic scanners shipped to Wal-Mart's Texas distribution centers. But given current tag costs—20 cents to 50 cents or more—it's likely to be several years before RFID has a big impact on retailing.
Among the most talked about potential applications are the ability to automate the checkout process and eliminate lines and the ability to market to consumers who opt in to loyalty programs while they are making purchasing decisions. Experts envision people putting items into a shopping cart equipped with a computer, small display and RFID reader. When consumers that have opted into a loyalty program put a steak into the cart, they might get an ad for steak sauce or be told about wine that's on sale. When checking out, the consumer walks through a tunnel reader, has all the items in the car read automatically and pays with the swipe of contactless credit card. These applications require tags to be on virtually all items in the store—something that won't happen for at least a decade.
RFID is all the rage in the supply chain world, but the technology is also catching on as a convenient payment mechanism. One of the most popular uses of RFID today is to pay for road tolls without stopping. These active systems have caught on in many countries, and quick service restaurants are experimenting with using the same active RFID tags to pay for meals at drive-through windows.
RFID is also catching on as a convenient way to pay for bus, subway and train rides. Boston, Washington, D.C., Seoul, and many other cities are switching from magnetic stripe cards to RFID cards because the RFID allows more people to pass through turnstiles fasters, reducing congestion, and the lack of mechanical parts in readers reduces maintenance (subscribers, see Smart Cards for Smart Commuters).
Many ski resorts in Europe use RFID lift tickets. In Japan, consumers can download movie tickets to their cell phones and enter a theater by swiping an RFID tag in the phone past a reader in a turnstile. MasterCard and Visa are also experimenting with RFID cards and key fobs for small payments usually made with cash.
Security and Access Control
RFID has long been used as an electronic key to control who has access to office buildings or areas within office buildings. The first access control systems used low-frequency RFID tags. Recently, vendors have introduced 13.56 MHz systems that offer longer read range. The advantage of RFID is it is convenient (an employee can hold up a badge to unlock a door, rather than looking for a key or swiping a magnetic stripe card) and because there is no contact between the card and reader, there is less wear and tear, and therefore less maintenance.
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