RFID Gazette

April 30, 2007

16 Barriers to RFID Ubiquity

RFID is arguably a very efficient technology, made for multiple purposes, useful for private and public sectors. The benefits of RFID are far too numerous to mention in a single article, as the potential applications are seemingly endless. Many in the industry and elsewhere feel that the technology will become ubiquitous and replace older technologies because of its efficiencies and extra functionality. The problem is, it is also a very controversial technology for many reasons, which are thus a barrier to widespread adoption of RFID.

Perceptions, Opinions, Religion

There are many reasons why some consumers are either wary or outright against RFID, amongst them privacy and security issues, and sometimes misinformation.

1. Privacy issues.
   You've no doubt heard of all the data security breaches due to stolen laptops. RFID asset management systems that warn of items going beyond a designated area help prevent such events. On the flip side, security researchers are publicly demonstrating that some RFID-enabled items such as e-passports, ID cards, driver's licenses, credit cards, etc., may not be all that secure. What's more, for about $20, you can buy equipment on eBay that can be used to "skim" data of some of these chips. Information such as this is important for the public to know about. Withholding the information hurts the industry and breeds amongst consumers, even for safe applications.


2. Consumer resistance.
   Resistance to RFID by consumers is due both to legitimate concerns and misinformation. Unfortunately, the legitimate concerns emotionally outweigh the resistance due to misinformation. Resistance is on a number of fronts:
   
   
   • NFC, or Near Field Communications, drives digital money applications such as NFC-enabled cell phones and contactless credit cards, for use with vending machines and other places. While NFC phones are not that common in the United States - and won't be for a while - they are more so in Europe and especially Asia. However, recent tests in Asia show contactless wallet trials are doing badly. Add to this the fact that small-ticket purchases, say under $25, do not require a signature, and the more financially conservative may feel uncomfortable using RFID-based payment systems.
   
   
   • Item-level tagging is supposed to be the killer RFID application for retailers. Giants such as Wal-Mart have certainly dived in. Such applications allow merchants to learn your shopping habits, even greet you at the door and make recommendations. Except some people are wholly uncomfortable with this and see no perceived benefit to them, but only added cost to merchandise.
   
   
   • National ID cards, e-driver's licenses, e-health cards, e-passports, and even contactless credit cards have been the target of security researchers, who have demonstrated flaws in the technology used. Add to that the feeling by some that having a embedded RFID in identification documents feels like an invasion of privacy, with emotions flamed by security findings, and you have great resistance. Is this Big Brother? Are they tracking us? Can they know where we are, where we've been?
   
   
   • Implants. See elsewhere in this article.
   
   As you can see, resistance to the technology exists in many areas.


3. Misinformation.
   RFID is not a simple technology. It's not always easy to explain and there is a lot to learn. Even those who blog/write about it reguarly do occasionally get things wrong. Imagine what misinformation is spread by writers who do not regularly write about the technology - sometimes in very high profile print media. RFID still has the feel of science fiction to some, so there is not always a motivation to be accurate.


4. Religious objection.
   Religious objection to RFID falls into two key categories. One group believes that the chips are a mark of the beast and are against implants. In biblical prophecy, this is a number written on the forehead, to mark those controlled by an evil power. There are also less conservative groups who feel that any forced human implants of RFID chips leads us down a dangerous road to potential and probable misuse, and want to sound an alarm.
   
   The second group include religious groups who have certain restrictions about using electricity or electronics. For example, there is an Amish group in the state of Indiana who are forced under the rules of NAIS (National Animal Identification System) to RFID tag certain types of livestock. The group feels that this ruling is a violation of the religion. In particular. Unfortunately, failure to comply means a $1,000 per day fine, which they cannot afford.


5. Public relations errors.
   When security researcher Chris Paget recently discovered that HID Global's RFID chip had a security flaw, he tried to present a talk about it at a conference in February 2007 and subsequent talks. Except the company forced him to keep quiet by claiming that his talking about the chip's flaws would be a violation of their intellectual property, despite the questionable legitimacy of the claim. Because HID Global's chip is used in e-passports and contactless credit cards, some feel that consumers have a right to know about flaws, and as a result the incident gives the company and the industry bad publicity.

Business

Businesses and manufacturers, too, are reluctant to adopt and implement RFID. There are also hindrances for companies in the industry.

6. Tag cost, especially for item-level tagging.
   As mentioned above, item-level tagging has been held out as the killer RFID app for retailers. Except the cost has been prohibitive for some. Imagine the added cost to retailers and suppliers both:
   
   
   • Tag readers.
   • Middleware and databases.
   • Consulting and implementation.
   • Maintenance licenses.
   • Training of employees to follow a new workflow.
   • Hiring of IT to manage and safeguard collected data.
   • Public relations and marketing to explain to consumers what benefits they're getting for the added cost.
   
   
   • Cost of tagging items.
   
   And there's the rub. At present, RFID tags cost anywhere from about 5 cents to $40, possibly more, depending on tag type and use. However, to get the cheaper tags, which are typically passive and suited to item-level tagging, they have to be purchased in massive volumes due to costs of manufacturing tags. So at present, most retailers and suppliers feel no need to adopt this technology that will likely eat their margins. This is true even in the pharmceutical industry, where specific drugs are supposed to now be item-level tagged by law in the United States. (Though the FDA keeps flip-flopping on their decision.


7. No perceived ROI.
   Even if item-level tags are more readily available, many small businesses (retailers and suppliers) have a perception of low ROI (Return on Investment). They do not necessarily have the qualified personnel to determine what they will gain from implementing RFID into their workflow processes. What doesn't help is retail giants such as Wal-Mart mandating a change for all of their suppliers, delivering an ultimatum, and then declaring that they would not help suppliers find and ROI. Their suppliers must bear the costs themselves (though they'll get trained by Wal-Mart) and find their own ROI to deflect the cost. Is it a wonder that businesses and suppliers feel if it ain't broke, don't fix it?
   
   There are also retailers who are concerned that implementing contactless payment technology (NFC - Near Field Communication) means higher operating costs, to be passed on to consumers, possibly resulting in reduced sales.


8. Lack of skilled labor.
   Reports from the UK suggest that the number of college/ university students that are graduating with pure IT degrees has dropped by about half in the past 3-4 years. While RFID doesn't necessarily have to be slotted into the IT category, there are several categories of skill involved, and there is a shortage of labor for most if not all of them:
   
   
   • Design, development, and manufacture of chips and tags.
   • Middleware and database applications development.
   • Consulting and integration.
   • Technical documentation.
   • End use.
   
   Lack of skilled labor means, of course, that less RFID projects are kicked off. This in turn means technology costs stay high. It's the proverbial vicious circle. Overall, it spells trouble for the industry, unless training and certification become a priority at many levels.


9. Limited number of training programs.
   Training programs are still limited, though they are growing in number. There are several categories of RFID education:
   
   
   • Diploma or degree programs in colleges and universities. While a vendor may supply the laboratory and equipment, the curriculum is largely vendor-neutral.
   
   
   • Training programs from vendors, usually taught on location for client employees.
   • Vendor-neutral, independent training centers. Usually these are certified programs, such as CompTIA RFID+.
   
   RFID training, certification and education in general is crucial to the growth of the industry. Without qualified people, implementations are held back, reducing equipment sales and thus keep costs high.


10. Market hiccups and failed IPOs.
    While VeriChip did launch their IPO, reports are that it was poorly received. Alien Technology, on the other hand, postponed their IPO and accepted venture capital instead, as have other firms. Then there firms like Checkpoint Systems who are laying off staff, and Sandtracker, who are dropping patents. This atmosphere, especially Alien's postponed IPO, likely discourages other manufacturers of RFID technology from additional research, which stifles innovation.


11. Patent-related litigtation.
    There really are companies who intentionally buy out patent-bearing companies solely to levy lawsuits against companies. It happens in the software and electronics industries all the time, and litigation, or the threat of, is now happening in the RFID industry. It's a roll of the dice because even when the lawsuits are spurious, the company on the receiving end may cave, to save on the costs of a lawsuit and the result loss of business that may occur when key personnel are wasting time in court. With so many small players in the RFID industry lawsuits have a multiplied effect.

Security, Privacy, Technology, Regulation

RFID is not a perfect technology, and there is some competition. It also suffers from communications laws that vary from country to country, not to mention other types of regulation.

12. Human RFID implants.
    When it's not e-Passports or seemingly insecure contactless credit cards, RFID chip implants seem to be the hot potato of the industry. Amongst all of the positive, useful applications is the questionable use of human implants when there is no solid evidence that they are truly necessary. This application, more than any other, drums up visions of science fiction scenarios where we're all controlled. Some of the perceptions are false, due to hype. However, the potential for political or other misuse is very high. One of the foremost companies for implants are VeriChip, whose IPO didn't do all that well for an RFID application that is viewed unfavorably by even those in the industry.
    
    While some people have voluntarily received implants, even initiated them, articles online and simple common sense would suggest that forced implants are not looked upon with any anticipation. There just are far too many negative associations with such applications. Unfortunately, while some states are banning forced implants, it does not preclude the possibility that a company or organization will try emotional blackmail, which is hard to prove in court. And there are those such as soldiers, whom VeriChip intends to implant, who may not feel they have a choice. Add in the fact that some people feel that forcing mass implants is a carefully orchestrated move to fatten the wallets of defense contractors and related businesses, and you have a black eye on the whole industry.


13. Technical flaws.
    RFID, while a mostly efficient technology, does have its flaws. These flaws are amplified when the technology is used in applications where the "prize" for breaking security is high. This includes e-passports, contactless credit cards, NFC-enabled cell phones, etc. RFID is supposedly attracting hackers [Computer World], and the skimming devices and other equipment are cheap and relatively easy to build:
    

    The current generation of... RFID... is vulnerable to eavesdropping, cloning and forging. [Computer World]

    To date, the reaction from liable parties, such as contactless credit card issuers, has seemingly been defensive, with answers quite contradictory to that of security researchers. This only serves to get the backs up of consumers.


14. UHF vs HF debate.
    UHF vs HF is a specific form of competing technologies (see below). They both have their benefits and shortcomings. HF, or High Frequency, RFID tags are an older technology but do not work near or inside of certain materials. UHF, or Ultra High Frequency, tags are more suited applications where there is a greater distance between tags and readers. UHF tags also work near or inside of materials that HF tags do not. Despite these fairly clear characteristics, there are debates about which form is more reliable, more efficient, and so on, for various applications.


15. Broadcast regulations.
    Radio frequency usage regulations vary from country to country. The net result is that RFID technology performs on numerous bandwidths. There are several related ISO specifications, but to end users it's too complex. Companies that are multi-national have a more difficult job choosing a single solution that will work for them in all of their offices, plants and/or outlets.


16. Competing technologies.
    There are no technologies that are an exact competitor to RFID+NFC. There are, however, several that overlap in some functionality.
    
    
    • GPS.
    • RuBee.
    • Biometrics.
    • VLID.
    • LWID.
    
    Each has its merits under specific real world scenarios. Sometimes they offer a cheaper solution, sometimes added functionality.

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April 30, 2007 in Business, Security, Software, Standards, Systems, Tags & Readers | Permalink

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