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What is RFID? How does it work? Types, applications and challenges

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  • 9 min read

RFID (Radio Frequency Identification) is a technology that enables data collection and transferring with the help of radio waves in the form of electromagnetic or electrostatic coupling. The data is encoded in a chip called RFID tags or labels. The functionality of this technique is similar to barcodes and the magnetic strip at the back of credit cards, wherein a unique machine-readable identification is given to the object.

RFID’s approach is more comprehensive and advanced than the others, though. The tags can be read from proximity, without the need to have the label in the line of sight of the reader. Such feasibility of the technology has helped in quick processing and tracking of commodities.

The widespread adoption of this technology has allowed businesses to advance their managing and manufacturing capabilities too. The tracking ability of this technology has assisted companies in providing better services to their clients.

How does RFID work?

RFID is a byproduct of the Automatic Identification and Data Capture (AIDC) system, where a computer directly executes data collection and identification of an object without any human intervention.

A simple RFID system has three components — transponder or tag, reader and an antenna. RFID reader or interrogator is a combination of transceiver and scanning antenna, which transmits and receives radio frequency. These readers can be either handheld or permanently attached devices.

When the radio waves that are continuously transmitted by reader comes in contact with the RFID tag, they make the embedded transponder to bounce back the waves in the form of feeds to the reader. The information received by the reader automatically gets stored in a database.

Also read: What is the difference between 2.4 GHz and 5 GHz WiFi frequencies?

3 types of RFID tags

In simple terms, RFID tags are memory houses that contain information about the object that they are attached to, which includes the location, serial number, and manufacturers name, among several others. The storage capacity of a tag depends upon its type and usage.

A commercial use tag only has a storage capacity of approximately 2KB whereas a tag used by the defence forces can have a capacity up to 128KB.To understand the working and range of these tags, it is important to know their types.

  • Passive tag:  They are the smallest and cheapest of all as they come sans battery. They rely on the radio wave energy transmitted by the reader through the antenna. With such flexibility, they can be used for a more extended period but with low range compatibility.
  • Active tag: A battery is added to the active tag that prompts it to transmit long-range signals continuously, making it the best option to be employed for vehicle tracking, auto manufacturing, and asset tracking, among other use cases.
  • Semi-Passive tag: It works on the principle of both passive tag as well as active tag. The tag has its source of energy but relies on the RFID reader transmission to enable feedback signal.

RFID frequencies

One of the primary tasks that companies need to keep in mind while implementing RFID technology is to choose a frequency that best suits their needs. It not only helps in cutting their expenses but also enhances their manufacturing ability. The frequency operation may vary from country to country, but the standard RFID tags frequency comes under the following three major categories.

  • Low frequency:  It has a primary frequency range between 125kHz to 134kHz with a read range of 10cm. These frequencies work well in metal manufacturing plants and with a liquid substance, making it the best choice for animal tracking and access control tags.
  • High frequency: With a primary frequency range of 13.56MHz and read range of up to a metre, the tags can be used to mark library books, poker chips and personal ID cards.
  • Ultra-high frequency: These chips have a primary frequency of 860MHz to 960MHz with a read range of 10 to 15metres.

Uses of RFID 

Over the years, companies around the globe have employed RFID in various fields. It is not only used by companies in manufacturing or transporting business, but the tech also has its value for preventing a security breach. You might have come across many of such tags without even realising their function. Some uses of this technology are as follows:

  • Race Tracking: A chip is inserted in the shoes or the race bib to track the timing of a marathon runner.
  • Material management:  In large construction warehouses companies often plant a chip on their material to reduce the hassle of finding them.
  • Access control: Helps to maintain security protocol, wherein people or cars can only enter a restricted area if they contain an access tag.
  • Library system: Tag on books not only helps in the inventory of shelves but also fast-forwards the check-in and check-out time.
  • Tracking a lost pet: One of the early and widespread uses of RFID technology was to implant it into pets. So, if by any chance your pet goes missing the concerned authorities can trace the animal back to its real owners.
  • Passports: Countries like the USA, Canada and Russia, among others, issue passports with RFID chips so that the authenticity of the holder can be proven. If someone steals it, then altering the information becomes difficult.
  • Casino chips: This technology helps the casino authorities to track the money circulation on any table alongwith protecting the chips from getting lost.
  • Military and Defense:  To track the movement of military equipment and arms, countries like the US make use of RFID and GPS technology to ensure that their supply-chain does not get hampered.

Also read: What is LTE? How is it different from 4G and 5G?

How is RFID different from other technologies?

What are RFID blocking wallets? Why are they used?

Below we have compared RFID technology with two of the major tools in the same field — Barcode and NFC.

RFID Vs Barcode

As both the methods are employed in similar industries and their usage is more of a same- asset and inventory tracking- but there is a big difference in working capabilities of both the technologies.

  • Barcode uses an optical barcode reader, whereas RFID employs radio waves to collect data.
  • RFID can scan multiple tags at ones, while barcode can only process one tag at a time.
  • It is easier to counterfeit barcodes than RFID.
  • RFID can withstand any weather conditions, unlike barcodes, which are susceptible to wear and tear.
  • Data stored in RFID can be changed over time. The same is not possible with a barcode.
  • Though barcodes are significantly more cost-effective than RFID.


NFC stands for Near Field Communication, which is a subset within the RFID family. Like RFID, it is also a wireless technology that exchanges data with other devices through radio waves. NFC technology also assists in quick payment. They might look like a replica of one another but are not same in many ways.

  • In RFID tag can be read uni-directionally whereas in NFC can be read bi-directionally
  • RFID has various frequency range compatibility like low, high and ultra-high frequencies, but NFC is only limited to high frequency — 13.56MHz.
  • Multiple tags can be scanned at a time with RFID, but that’s not possible with NFC.
  • Modern mobile phones are NFC equipped, whereas they need a third-party app to be RFID-enabled.

Also read: What is an NFC attack? How does it work and 3 preventive measures

Security and Privacy

What is HSTS? Should you enable it on your website?Despite the convenience of RFID technology, the nature in which this tech work has made it susceptible to security concerns. All the experience with the technology has shown that anyone with a compatible reader can breach the security shield of the technology and can have access to all the information in the chip.

Most of the RFID tags do not include any hard encryption leaving a margin for a loophole in the system. Though for passports, they use the access control system in which the encrypted chip is key protected, and an optical reader is required to access the password without which the reader can not interact with the RFID chip. Countries around the globe are now using thin radio shield covers, to protect the chip when the key is closed.

The more rigorous approach has undoubtedly reduced hacks, but to say they can not be breached is just closing your eyes to reality. So to have an extra layer of protection for all the smart cards with RFID chips, it is recommended to keep them in a metal cardholder, aluminium foil or RFID blocking wallets.


With the increased use of RFID technology, industries have pointed out two of the common challenges, which have resulted in the delay of processing large stock of items.

  • Tag collision: This happens when the RFID reader starts getting a radiofrequency transmission from multiple tags simultaneously and is unable to identify the source. The best way out is to implement a system that can isolate individual tags.
  • Reader collision: This problem is pretty common with industries that employ many RFID readers to fast-track their work. It occurs when the transmission of one RFID reader overlays with the other. To overcome this, a systematical usage of the readers is recommended, and also to program the RFID system to read and record a tag only once.

Also read: What is RSS? How to create and follow an RSS feed?

Vishal Chandel

Vishal Chandel

Reader, Writer, Lawyer, Horse Rider. Vishal thinks he's funny, unless you beer him; then he's actually funny!