Business Finance, FinTech

Safety First! – RFID for your business

Radio-Frequency Identification (RFID) is a fairly simple technology. Admittedly, it’s still pretty cool to use every time we swipe our cards at an electronic gate or scan our IDs at our workplaces. It’s this combination – of being cost-effective, simple, yet fairly versatile, that makes businesses consider RFID as the technology of the future. RFID has continually strengthened its global position. In fact, In 2020, the global market for RFID tags was projected to be sized at around 24.5 billion U.S. dollars, almost twice as much as it was in 2016. An increasing number of businesses are integrating RFID technology in an increasing number of business processes.  

1. What is RFID and why is it better than traditional bar code

Simply put, RFID is a form of Automatic Identification and Data Capture technology which captures data stored on a remote label or chip without any human intervention. The system has 3 major components: an RFID tag or smart label, an RFID reader, and an antenna for transmission of data. 

As opposed to the more traditional barcode, which uses a visual representation to transmit information, RFID is faster and can read information from a greater distance. In addition to this, multiple RFID tags can be scanned at once and unlike barcodes, it is not susceptible to physical damage and wear and tear. 

2. Why should a business use RFID

There are several ways in which businesses can use RFID technology to make their business processes simpler and faster. Some of the most popular uses are: 

  • Asset Tracking

Most RFID technology used in business tracks and maintains records of assets. It helps streamline business operations and helps in better utilization of funds and resources simultaneously.

  • Access control

RFID tags are largely used in identity cards and access passes. Owing to the quick speed of recognition and multilayered access point architectures it supports, RFID tech ensures faster and more accurate readings. This helps track personnel movement and enforce non-access zones in the workspace, as per the business need. In other words, it helps address the security concerns of an organization without being too heavy on the pocket. 

  • Payment systems

The modes of business banking transactions are undergoing a massive change. Near Field Communication (NFC) technology, an extension of the RFID can be used to enable mobile payments, making the transactions quicker. Mobile payments are gaining a lot of popularity, especially in corona times. This technology combines the interface of a smart card and a reader into a single device which ensures a 2-way communication with the reader and the NFC tag.

  • Inventory management

Manual inventory tracking is not just time-consuming but is also susceptible to human errors. By employing RFID technology in business, large parts of supply chains can be automated. The tracking of the inventory as well as all related data is essentially at the managers’ fingertips. Plus, RFID is a fairly cost-effective solution. In the case of warehousing and distribution, RFID-based inventory tracking lowers the cost of verifying content, locations, and availability of needed goods.

3. Concerns with RFID 

While it is clear that the RFID for businesses has that path-breaking potential, and is being utilized across sectors and domains, it is not completely devoid of its shortcomings. 

Some of the most pressing shortcomings are: 

  1. It is more expensive than the bar code technology 
  2. Materials like liquids and certain metals can interfere with the signals and the information can be lost
  3. More susceptible to unauthorized reading as 3rd party readers can be used to read the information
  4. More tags can respond at the same time 

RFID Benefits Outweigh Its Cons

RFID technology is gaining a lot of popularity in all spheres of the economic world: regardless of the size or sector of the business. While it is not completely devoid of its shortcomings, the overall benefits from this technology outweigh the cons. With faster controls, customization options, and lower costs than the conventional bar code system, the RFID technology has conquered the business world by a clean sweep. For more on business banking, head over to the Salt blog.

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