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RFID Gets Personal

Slowly but surely, consumer applications of RFID technology are on the rise.
By Andrew Price
Apr 02, 2006—By Mary Catherine O'Connor

Whether they realize it or not, a large number of consumers are actively using RFID technology, and enjoying its benefits. In the United States, millions of people use the technology to deactivate their car alarms and unlock the doors, while 6 million use Exxon Mobil's Speedpass to pay for gas to run those cars. Tens of millions of drivers in the United States, and millions more worldwide, use battery-powered RFID transponders to pay for bridge and highway tolls automatically, and many use contactless smart cards to gain access to their offices, parking lots or even computer networks. But a number of other consumer applications are cropping up—from using RFID tags to track personal assets to using RFID-enabled cell phones as wireless wallets—sparking, at last, the move from small-scale pilot projects into the mainstream.

RFID has often been touted as a bar code on steroids, which is an apt description of how the technology can improve the tracking of goods in the supply chain. Improved product-tracking could result in efficiencies that lead to cost savings for consumers, but people are also finding that RFID offers many more direct benefits than simply the potential to lower product prices.

A consumer uses an NFC-enabled phone to download a movie trailer frmo a promotional poster.

Payments, Transportation and Identification
The year 2005 was a big one for RFID-enabled payments. After extensive pilot trials, American Express, MasterCard and Visa all launched RFID-enabled "contactless" cards into the marketplace. Currently, U.S. banks have issued approximately 5 million MasterCard PayPass cards and keychain fobs, as well as an unpublished number of RFID-enabled Visa cards. American Express, meanwhile, is embedding RFID tags into its entire line of Blue cards issued in all 50 states. What's more, a growing list of merchants, including McDonalds, 7-Eleven and CVS, accept payments with the cards through specialized point-of-sale terminals. Cards from all three companies use the same ISO 14443 air-interface protocol and can be read by the common terminals.

At present, approximately 25,000 U.S. merchant locations accept RFID-enabled payments, with RFID interrogators also being integrated into vending machines and kiosks (see Vending Machines Accept RFID Cards). In Asia, RFID-enabled payment systems are more mature and widely used than in other regions of the world. Still, Mike Friedman, director of emerging technologies at Mercator Advisory Group, a Waltham, Mass., payments industry market research firm, thinks that although current usage of RFID-enabled credit cards in the United States is minute, consumers will embrace contactless payments. "In the next three to five years, contactless [devices] will be well in use," he predicts, "and by the end of 2007, my parents will probably be using them."

The Metropolitan Transportation Authority and MTA New York City Transit are running tests with the help of MasterCard and PayPass card issuer Citibank. The tests are intended to determine if passengers would be likely to switch to PayPass cards instead of magnetic-striped transit cards to ride the subways (see RFID to Ride N.Y. Subways. Other transit systems in the United States, as well as many in Asia and Europe, are already using RFID-enabled transit tickets. For more on RFID-enabled payments, see The Cashless Reality.
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