Evan Schuman's StorefrontBacktalk

RFID is likely to fare well as long as you stay outside of retail, according to a new report from financial firm Robert W. Baird & Co..

Under a heading of “Good Momentum Beyond Retail Supply Chain Applications,” the reports discusses “positive momentum” with display tagging, airline bag tagging and chemicals and it predicted more strength next year in aviation, library, transportation and fashion markets.

On the down side, the report said legal challenges in the pharmaceutical tagging arena “may slow the adoption of RFID by some pharmaceutical companies.”…

A U.S. Patent that deals with the allegedly optimal positioning of RFID antennas, tags and interrogators for read accuracy was awarded to a Dulles, VA, company called Odin Technologies, the firm announced on Thursday. The Patent was applied for on Jan. 22, 2005, and was granted on Nov. 7, 2006.

The improved accuracy is achieved because "the system varies the placement of RFID tag and interrogator antennas with respect to each other and a stationary object or objects. A signal generator sends a known reference signal to the one or more RFID interrogator antennas."Read more...

The dollars spent on contactless payments hardware and software isn’t going to be a huge market anytime, with ABI Research doubting the market will even break $900 million by 2011.

ABI projects that the total market will only be $870 million by that year, up from $260 million for 2006. It argues that the two adoption movers are proprietary transportation ticketing, and open credit, debit, and e-purse payments tied to financial service networks. There is a downside, though, with U.S. and European standards efforts for mobile payments delaying key rollouts.…

A radiation-proof RFID tag? It might be here, for those who believe what a Pennsylvania manufacturer is saying. They are touting a tag that’s safely sterilizable by gamma radiation.

The tag, called GammaTag and manufactured by a company dubbed AdvantaPure, is being positioned for the pharmaceutical, bioprocess/biomedical, food and beverage, and medical device markets.according to a story in Technology News Daily. The idea is that the chip can be attached to devices that needed to overrun by gamma radiation, an act that would wreck havor with most tracking devices.…

In another negative end-of-the-year report for RFID, ABI Research on Wednesday reported that the passive RFID label market—particularly UHF labels—has had disappointing growth because of unrealistically aggressive pricing.

“In a classic vicious circle dynamic, production costs for UHF labels—and hence for Gen 2 passive labels—are still at levels tending to inhibit the high-volume deployments that would provide economies of scale,” an ABI statement said. Said ABI analyst Robert Foppiani: “At current prices, many end-user companies in the retail/CPG supply chain struggle to determine a compelling business case for RFID. Those companies that have high value, high risk goods are often able to find a business case to justify the investment in RFID passive labels at current prices. But many members of the value chain are operating on thin margins, and most are unwilling to drop prices any further until there is much greater volume.”

The report said that Alien, Avery Dennison, Texas Instruments, and NXP “hope that their strap technologies will” cut costs while “multiple vendors are hoping to shrink the size of an IC to obtain more units from a single wafer. A number of EPC Gen 2 RFID vendors are engaged in loss-leader activities, offering labels at unsustainable prices in an effort to gain market share. Eventually, some will drop out of the running, or will find niche markets where their products can find a role. ABI Research believes that cost reduction tactics will not have a short-term effect on market volumes. The substantial price cuts seen in the past year were necessary to attract end users complying with mandates.”…

In a strong concession that fines have not worked in getting retailers to comply with credit card security rules, Visa has switched course and has dedicated $20 million for a fund to reward retailers who actually comply with industry-accepted PCI rules by Aug. 31, 2007.

"This is absolutely a different tactic," said Jennifer Fischer, a director with Visa USA, which is the nation's largest payment system company. "We believe that incentives are necessary to achieve compliance. This is the first time a payment card brand has used positive incentives" to encourage security compliance.Read more...

Reports out of Malaysia have the government wanting to embed into every car license plate an RFID chip with vehicle and owner information.

My favorite comment on this move came from a Wired blog post: “It’s not exactly clear how this will help since Road Transport Department Director-General Ahmad Mustapha was quoted by New Straits Times as saying ‘The first thing thieves do after a car theft is change the registration plates.'”

Perhaps it could help catch thieves in the first minutes after a theft? It would also force the thieves to defeat the RFID chip. Depending on the sophistication of law enforcement, they might then simply search for any license plates that do not generate working RFID signals and label them suspect. At the very least, it would force the car thieves to either fabricate RFID chips to send out false signals or–frighteningly–steal cars in such a way that it’s either not reported or at least not reported for a very long time.…

U.S. Sen. Charles Schumer is formally petitioning the Federal Reserve to crack down on contactless payment, requiring consumers to be warned about privacy risks and preventing retailers from offering incentives for the cards to be tried.

"If you are using a no—swipe credit card, when you put your card in your back pocket or in your pocketbook, you might as well print your credit card number across your back," Schumer said. "Holiday shoppers need to be extremely careful with their credit cards, and these companies need to step up their efforts to protect people from identity theft."Read more...

As retail RFID mandates promise to force more small- and mid-size manufacturers into the RFID business, NCR has put together an IT Cliff's Notes for RFID, featuring basic software, an RFID printer, bar-code scanner and "a startup supply" of Gen2 RFID labels.

The NCR RFID Retail Compliance package will sell for about $12,000 to $15,000, depending on options selected, said Terry Massey, an NCR sales and marketing director. The $12,000 versions will have just the printer and software "to do the basic retail mandate," Massey said, while the $15,000 version "starts getting into handheld readers and fixed readers."Read more...

When it comes to the meat-and-potatoes of the RFID retail business—the tagging of pallets and cases—2006 is going to go down as a very disappointing year. A new report out of London from IDTechEx paints a sad but realistic portrait of frustrated suppliers and very isolated pockets of ROI examples. It does, however, hold out hope for a somewhat brighter 2007.

"The pallet/case market for RFID tags became the nearest thing to a black hole in the RFID universe in 2006," said IDTechEx CEO Raghu Das, who attributed the problems to "reluctant mandated customers, technical problems and pricing for volumes that never came despite retailers reporting excellent paybacks. Tagging the display unit is very different from tagging the pallet and cases."Read more...

The 1,400-store chain Toys “R” Us is adding identity verification software to 832 of its U.S. stores, according to documents filed with the SEC on Tuesday, the Associated Press has reported.

The software, revealed in an SEC filing from the software vendor (Intelli-Check), will start being used at chain’s customer service counters, but will then move to POS lanes, the AP story said. Intelli-Check typically uses government identification–usually military IDs and state-issued driver’s licenses–to authenticate consumers.…

The U.S. government is not alone is trying to push a national ID card program to try and improve security and reduce security fraud. But efforts to do so in the U.K. were set back on Thanksgiving when a prominent British Parliament member published government answers on the true cost.

MP Stewart Hosie on Thanksgiving said that the British government's "claim that ID cards could save up to £1.7 billion of identity fraud in the UK economy was totally false" because "there are no costs calculated for the private sector use of ID cards" and that fact "has totally destroyed the credibility of the Government's claims on ID cards," Hosie said, according to a story in PublicTechnology.net. ""Indeed the admission that there are no costs to deploy the system in either the private or public sector without the Home Office makes any claims of savings meaningless. To read the full story,

Is a standard cellphone format for contactless payment in the offing? Unlikely, but some major players are going to make a lot of noise trying. Sony and NXP Semiconductors (formerly Philips Semiconductors) on Monday announced that they will work together to–by mid-year 2007–“plan, develop, produce and market a secure chip that will include both Mifare and Felica operating systems and applications, as well as other contactless card operating systems and applications.”

That’s quite an undertaking. The pair officially got the backing of the GSM Association, a major telco organization representing 14 mobile network operators: Bouygues Telecom, China Mobile, Cingular Wireless, KPN, Mobilkom Austria, Orange, SFR, SK Telecom, Telefonica Móviles España, Telenor, TeliaSonera, TIM, Vodafone and 3. The Sony/NXP objective, according to a joint statement the companies issued, is to combine what they will create with an NFC chip to create a universal contactless IC platform for cellphones.

To be fair, these kinds of relationships are essential for truly interoperable mobile payments systems to be deployed. But the hurdles on doing something like globally are huge. Then again, so are the incentives.…

StorefrontBacktalk was asked to pen a column about the impact of the cellphone on today's retailers for the Retail Systems Alert Group.

We argued that those devices are taking on lives on their own in a myriad of ways, from using their photo lens to read barcodes on advertisements to acting as a portable POS to an integrated loyalty card and coupon-generator. To read the full column,

As RFID engineers try to struggle to get the tags to do more with less power, researchers at the Rensselaer Polytechnic Institute have come up with a novel twist: solar power.

The sunny-thinking folk (who are hopefully not singing “When I Wish Upon A Star”) have teamed with the New York State Department of Transportation to use these solar-powered mobile RFID interrogator that will monitor traffic flow by reading EZPass tags attached to passing cars, according to an interesting story in Friday’s RFID Journal. An mGate interrogator collects the data powered by a single 100-watt solar panel and could be used to reroute traffic when roads are overly congested.

The outside-based system isn’t ready for year-round use yet, though. The story said that winter is bad time for testing as snow plows could endanger the readers.…

Praying that the “if we build it, they will come” cliché is true, MasterCard PayPass confirmed Thursday that it is adding some 5,000 additional self-service POS terminals—including a lot of vending machines—to its contactless repertoire, in Philadelphia, New York City, Dallas, Chicago, Las Vegas, San Francisco, Los Angeles, Boston, Washington D.C., Denver, Seattle, Miami and Orlando.

MasterCard dubbed the deployment “the largest rollout to date of contactless technology in self service point of sale and vending machines.” That would be a more impactful claim if we were seeing tons of companies stampeding to get into that space. …

Recent RFID trials are showing mixed results for RFID, with UK retail leader Marks & Spencer declaring its 42-store test a success and preparing to add 80 more test stores next year while Cardinal Health said RFID has "real promise" but a "great deal of additional work needs to be undertaken" before it's practical.

The Marks & Spencer trial is interesting because of the $14-billion M&S chain's history as a longtime RFID proponent. item-level RFID tagging will hit an additional 80 stories in the spring of 2007 and will be limited to apparel that has an especially wide variety of sizes, with the possibility of "extending RFID tagging to other clothing departments from the autumn of next year."Read more...

A consulting firm’s recent report that credit card interchange fees are weighed against retail interests may help push alternative payment methods. That might put pressure on the credit card players to soften their fee requirements.

The report from the Chicago-based Diamond technology consulting firm found, for example, that some 44 percent of interchange costs are used to fund credit card rewards programs even though “merchants get nothing out of these programs because they are competitive tools for issuers. Merchants likewise pay about 3 percent of their interchange dollars for association branding costs. Meanwhile, processing— the original reason for interchange—comprises only 13 percent of interchange costs. Given the merchants’ lack of perceived value for what they pay, the situation is clearly unstable.”

The report holds out hope for contactless payment options, cellphone payment and other alternative vendors including PayPal, Debitman and PayByTouch.…

The City of Brotherly Love may be among the first places to have taxis accepting contactless credit cards. The freeway-fond Philly financial falderol comes courtesy of a deal between the Philadelphia Parking Authority, MasterCard, VeriFone and Taxitronics and promises to equip some 1,600 cabs with “networked fleet management capabilities and consumer services including wireless credit and debit payment transactions, navigation, scheduling, trip logs, lost & found tracking, and panic button alerts,” according to a joint statement the group issued.

Because transactions worth less than $25 will require no signature, VeriFone said that it estimates the system will cut about 45 seconds off the transaction time in taxis when compared to cash and 15 seconds when compared to swiping a traditional payment card.…

Hull, England-based ADS Worldwide, an 18-year-old 235-employee vendor selling tags, labels and trim for apparel manufacturers and retailers, will be taken over by Checkpoint Systems for $8.5 million in cash, plus closing costs, Checkpoint announced Tuesday.

The acquisition is expected to add more than $20 million of revenue in 2007 and be neutral to slightly accretive to earnings per share, due to integration costs in the first year and purchase accounting, the statement said. ADS was initially focused on barcode service and more recently has been offering on-line ordering and tracking facilities.…

We all know that employees are the most likely source of theft at a traditional retail outlet. The latest trend is that identity theft– a huge retail concern with credit cards and especially the newer contactless cards–is also often homegrown.

A fascinating New York Times story today talks about family friends and relatives a likely source of such trust-abuse. The story specifically talks about ex-spouses. This is the problem with Social Security numbers and other lifelong identifications. Once breached, there’s no easy way to start anew.

The most chilling line was about a victim who complained to the District Attorney’s office that multiple checks and an old driver’s license were still missing and that her former friend could still fake her identity whenever she wanted to. The D.A. official told her: “Oh, she won’t do that again.”…

When IT managers at the $2.5 billion Jack-in-the-Box fastfood chain started looking at contactless payment issues this year, it was clear that the RFID-enabled credit cards would be more than a faster way to get customers processed. It would add to the 2,000-restaurant chain's coolness factor and give young customers another reason to check out the chain. This is especially the case with the demographic that fast-food managers most want to cultivate: 18-34-year-old men.

But taking the next traditional step—limited trials in a handful of carefully-watched locations—wasn't going to make the bold statement needed. The company opted instead to immediately rollout out contactless payment to every one of the chain's restaurants—both for the 1,400 restaurants they own and about 600 that are franchised—in 17 states.Read more...

One of the many challenges with RFID has been doing simultaneous scans of a product and the product’s container. For example, manufacturers have long wanted to be able to scan a case of products that supposedly contains 50 bottles of a pharmaceutical while at the same time scanning each of those bottles to verify the contents. The problem is interference between the bottle-attached tags and the container-attached tags.

A Palo Alto, Ca., vendor claims to have concocted a simple workaround involving using UHF tags on the containers and HF tags on the individual products. Blue Vector Systems next week will announce its workaround, to be described as a dual-frequency RFID conveyor tunnel and positioned initially for the healthcare space. “An embedded Blue Vector Edge Manager in the tunnel manages the multiple sensors required and executes business rules in real-time as cases and items are scanned,” according to a draft a company statement. “These rules can be used to remove cases from the line, to load EPC-compliant information into backend systems, to authenticate items with the original manufacturer, and to send advance shipping notices to supply chain partners. The tunnel can be configured and monitored via a web interface.”

Although the system is being positioned to thwart drug counterfeiting–Blue Vector is working with the manufacturer of Viagra–their current approach doesn’t attempt to identify tampering. As long as the number of tagged bottles is what it’s supposed to be, it gets a greenlight. None of the individual bottle wrappers are, at this stage, tagged, theoretically permitting someone to replace the bottle’s contents if they can get around packaging protections.…

The approach sounds quite simple. But is IBM’s Watson Research Center’s clipped-tag RFID strategy more simple or more simplistic? The clipped tag approach allows for a good chunk of the tag’s radio antenna to be snapped off, sharply reducing how close it has to be to a reader before it can be read.

This is intended to address privacy and fraud concerns. But even if retailers and/or consumers snap off the antennaadult bounce house, will it’s read-range be short enough to be secure? IBM’s position that it would have to be right next to a reader sounds far too familiar, given how much of the industry said the same things about regular RFID tags until researchers continually proved that to not be the case. When it comes to RFID and privacy, the industry has a very severe credibility problem.…

Newgistics has made a nice little living selling software to help retailers handle product returns. On Monday, the Austin vendor launched a package designed to help with large-scale recalls.

I am envisioning their launch presentation to investors: “People, only invest in this if you believe that American manufacturers are going to screw up a lot more in the next two years.” Betting on manufacturers to botch product safety. Now why can’t my mutual fund invest in that?

The Newgistics program supposedly helps retailers and manufacturers manage “each phase of the recall process, from customer notification to product disposition,” said a company statement. “Once a company has developed the product recall message in conjunction with the Consumer Products Safety Commission, Newgistics works closely with the company to promptly deliver customized recall information to impacted consumers via E-mail or postcard. As a key component of the online recall program, customers can access the Returns Center, an online portal that captures customer information, creates a dynamic return label and conveys recall status information to the retailer or manufacturer. Alternatively, companies can implement the recall program offline, providing consumers with a dynamic return label along with the recall notification.”…