RFID Payments and Privacy Concerns

Tuesday 27 April 2004 09:26 CET | News

Radio frequency identification (RFID) payments - using contactless payment devices like fobs (keychain tags) for gas pump, or transponders for paying highway tolls - have received significant attention over the last two years.

More recently, RFID tags have been deployed at the retail level to manage inventory, spurring charges that such solutions could ultimately pose a threat to consumer privacy. The chief concern is that the proliferation of RFID chips - from one-per-pallet in a warehouse today, to a future vision of one on every product lining a retailers shelves - might lead to a world where a consumers shopping habits, product usage patterns, and even travel patterns could be monitored by businesses or the government. These concerns are having an impact on how some retailers deploy RFID tags, as well as on how they position these services both internally and with consumers. To offset growing privacy fears, TowerGroup believes its critical for financial institutions to clearly communicate the differences between the use of radio frequency in retail merchandise tracking and the use of radio frequency in the payments arena. In TowerGroups new research titled, Extended Internet Privacy: Why Radio Frequency Payments Will Weather the Storm, discusses the distinctions between radio frequency in consumer payments and retail inventory tracking. The research also explores the steps financial services institutions can take to prevent negatives swirling around RFID from having a significant impact on market positioning, consumer perception or ultimate adoption.

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Categories: Payments & Commerce | Payments General
Countries: World
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