Radio Frequency Identification (RFID): What It Is, How It Works

What Is Radio Frequency Identification (RFID)?

Radio Frequency Identification (RFID) is a technology that uses radio waves to passively identify a tagged object. It is used in several commercial and industrial applications, from tracking items along a supply chain to keeping track of items checked out of a library.

Key Takeaways

  • Radio Frequency Identification (RFID) is a type of passive wireless technology that allows for tracking or matching of an item or individual.
  • The system has two basic parts: tags and readers. The reader gives off radio waves and gets signals back from the RFID tag, while the tag uses radio waves to communicate its identity and other information.
  • The technology has been approved since before the 1970s but has become much more prevalent in recent years due to its usages in things like global supply chain management and pet microchipping.

Understanding Radio Frequency Identification

Radio Frequency Identification is used in conjunction with a microchip, a powered antenna, and a scanner. Although commercial uses for it were first developed in the 1970s, it has become more universally accessible in recent years. With advancements to the technology used to read and store information, it is now more affordable to purchase and adapt.

Radio Frequency Identification works through a small electronic device, usually a microchip, that has information stored on it. These devices are generally quite small, sometimes the size of a grain of rice, and can hold large amounts of data. While they don’t always emit electricity, some can contain a stored power source or batteries. The scanners used to read these devices can also provide enough electricity to allow them to read the microchip. There are many different uses for the technology, but it is commonly used in tracking products, animals, and currency.

RFID tags can be passive, and therefore powered by the reader, or active, and therefore powered by a battery.

Special Considerations

The technology is not without controversy. Due to the nature of how these devices work it is not inconceivable that someone who is not supposed to access the information on the microchips would be able to. There is also concern that personal information may become accessible without consent since these frequencies can be transmitted over larger distances than their more common counterparts, barcodes. Unlike barcodes and barcode readers, one does not need to be able to see the microchip to access the information on it.

RFID Use-Case Example

One of the more common uses of RFID technology is through the microchipping of pets or pet chips. These microchips are implanted by veterinarians and contain information pertaining to the pet including their name, medical records, and contact information for their owners. If a pet goes missing and is turned into a rescue or shelter, the shelter worker scans the animal for a microchip. If the pet has a microchip, the shelter worker will only be a quick phone call or internet search away from being able to contact the pet’s owners. Pet chips are thought to be more reliable than collars, which can fall off or be removed.

With the rise of accessibility of the technology, most veterinarians and shelters now have the technology to read these microchips. Universal scanners and national databases for storing owner information are also rising in popularity, making it easier than ever for microchipping pets to be a successful way to get lost pets reunited with their owners. One downside of the device is that the records must be kept up to date. The information is only as reliable as what is being imputed by the person setting up the microchip.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. RFID Journal. "The History of RFID Technology."

Open a New Bank Account
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Sponsor
Name
Description