RFID stands for 'Radio Frequency Identification'. RFID Provides the capability to communicate between a base station reader and a transponder tag. The reader transmits RF energy which is captured by the tag antenna and used to power the chip. RF signals also transmit commands and data between the reader and transponder. The transponder can be a label, card or key-fob which contains the integrated circuit and antenna.

Depending on the chip and antenna design very high speeds of secure data transfer can occur opening up wonderful possibilities for the technology, such as biometric access control, electronic payment or e-purse, e-goverment, and e-tolls.