It's short for radio frequency identification.
And what is it?
RFID chips are tiny microchips (smaller than a grain of sand) with antennae on them. The chips can transmit a unique code or other data to an RFID reader without touching it, via radio transmission.
And why would I need one?
Most commonly, they turn up in retailers' supply chains, working like electronic barcodes. They're stuck to pallets, crates, cases and even individual items of stock. Then, instead of having to employ someone to count stock, you wave an RFID reader near the tag (the chips can typically be read up to a range of about 10 feet away) and – hey presto - it does all the counting and stock identification for you.
Sounds handy. Shops must be going wild for the chips...
Well, yes and no. Some major chains like Wal-Mart, House of Fraser, Marks and Spencer and Tesco have trialled RFID. Some, like Wal-Mart, are mad for the new technology and intend to drag their suppliers along with them whether they like it or not - Gillette even went as far as slapping the tags on their razors, much to the chagrin of some shoppers - while others are less than enthusiastic and have steered clear of the technology beyond the trial stage.
What's the problem then?
It depends on who you ask. The biggest and most often cited obstacle is cost – the chips are just too expensive, according to most retailers, to put on every pallet, let alone every item. The tags cost upwards of 15p a pop and most retailers won't touch them with a bargepole until the cost drops to a couple of pence.
Fair enough. Is RFID just a retailer's thing then, or will we see it turn up anywhere else?
As tech's official Next Big Thing, it's pretty likely. RFID chips have done the rounds in supermarket loyalty cards, banknotes, on clothes and pharmaceuticals and there's even discussion about putting them inside credit cards and passports.
Passports? Does that mean shady government types can track my every move?
In a sense. Chips in a passport could be used to track the flights you've taken, for example, or even track your movements throughout an airport. The tags can only be read at short distances, so it's unlikely that Enemy of the State-style tracking is on the way yet - but retailers haven't exactly been doing their best to allay the fears of the civil liberties groups.
To stop the chips changing from stock control staple to surveillance tactic, the chips need to be disabled as soon as shoppers leave a store and the retailers need to allow consumers to opt out of having their goods tagged. One German supermarket put RFID chips in all their loyalty cards without informing shoppers and let the chips transmit even when shoppers had left the building. The resulting protests forced the supermarket chain to ditch the tags.
Microscopic tracking tags - it all sounds a bit futuristic. Is it all just a lot of hype?
Retailers and manufacturers don't think so. Wal-Mart and the US Department of Defense recently issued a mandate to all their suppliers demanding that they have RFID systems in place by 1 January 2005.
Analysts are also getting hot under the collar about RFID. According to the research firms, it's not so much a case of if RFID becomes ubiquitous, but when.
Jo Best has been covering IT for the best part of a decade for publications including silicon.com, Guardian Government Computing and ZDNet in both London and Sydney.