Aug 01, 2005I'm always at pains to try to explain to my 6-year-old son what RFID is—unseen radio waves that somehow are a unique number. But when I tell him RFID is what enables us to zip through the tollbooths on the way to the Bronx Zoo, or to pay for the gasoline we put in the car with a wave of a wand, he thinks what I write about is pretty cool. Judging by how quickly
RFID is catching on as a quick and convenient way to pay for stuff, grownups apparently think it's cool, too.
Mass transit providers around the world are switching to cards that store electronic cash. In Hong Kong, for example, more than 9 million commuters use the Octopus RFID card to pay for bus, ferry and train rides. And sports fans in Europe and the United States are using RFID cards or keychain fobs to buy food and souvenirs at stadium concessions.
Now credit and debit card issuers are introducing credit cards with RFID transponders. They're perfect for small purchases—$25 and under—that are typically made with cash. The speed and convenience of these systems could help fast-food restaurants, convenience stores, movie theaters and other retail businesses ring up more sales.
Our in-depth cover story, "The Cashless Reality," examines the profound impact RFID credit cards could have on the way people shop (click here). They speed up transaction times, are safer than traditional credit cards and are more convenient than cash. But there are downsides to the technology for merchants and customers, including the cost of purchasing new point-of-sale equipment and concerns about privacy.
As RFID continues to make inroads in the supply chain, our Vertical Focus in this issue investigates how third- and fourth-party logistics providers could use the technology to bridge the information gap that has long plagued supply chain executives (see Around the World in Real Time). RFID could even help to secure millions of containers passing through the world's airports and seaports and help business leaders sleep better at night.
And with an eye on the big picture, rfid journal looks at the future opportunities and practical realities of RFID adoption. We explore the potential for using RFID to comply with the Sarbanes-Oxley Act, which requires public U.S. companies to file accurate financial statements (see Can RFID Improve Sarbanes-Oxley Compliance?). And in "Not All RFID Tags Are Alike," RFID Alliance Lab research director Daniel Deavours provides insights that companies need today to design RFID systems that work (click here).
The use of RFID payment systems falls somewhere between tomorrow's promise and today's reality. It's way too early to suggest that they'll spell the death of cash. But when deployed cost-effectively and responsibly, they clearly offer some benefits over coins and bills. Perhaps when my 6-year-old is my age, he'll think of RFID as money. Wouldn't that be cool?
Founder and Editor