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Embedding Their Hopes In RFID
Tagging Technology Promises Efficiency but Raises Privacy Issue

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  Matrics Inc., based in Rockville, manufactures its RFID tags at a plant in Columbia. (Courtesy Of Matrics Inc.)


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Keeping Track Companies are finding many uses for radio frequency identification (RFID) tags, which can be monitored to track an object's movement.
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By Jonathan Krim
Washington Post Staff Writer
Wednesday, June 23, 2004; Page E01

To John Kendall, casino gambling will soon look like this:

A player sits down at a blackjack table and bets a stack of chips, which Kendall hopes are manufactured by his company, Chipco International of Raymond, Maine. Sensors trained on the betting area of the table scan tiny computer tags embedded in the chips, and electronically report the amount of the bet to a security control room.

"If at table 17, player 4 has been betting $5, and all of a sudden he bets $500, they want to be notified," said Kendall, whose firm is investing heavily in technology known as RFID -- radio frequency identification -- to make the tags work. "Our reporting will tell the casino manager that this person has just changed his betting habits," perhaps because he is cheating.

Chipco, which hopes to introduce its new chips late this year, is one of many companies placing bets on RFID these days.

The technology has been around for a decade -- including use in the E-ZPass system that helps speed drivers through toll booths on many East Coast highways -- but RFID is now robust enough, and getting cheap enough, that it is beginning to transform numerous sectors of the economy by allowing unparalleled tracking of products and people.

Early this month, Reston-based Accenture LLP won a contract worth as much as $10 billion from the Department of Homeland Security that will include using RFID at U.S. border checkpoints.

Delta Air Lines Inc. is testing RFID baggage tags on its service between Jacksonville, Fla., and Atlanta, to help with security and lost luggage. In Great Britain, officials are weighing proposals to embed tags in vehicle license plates. International Business Machines Corp. is seeking to convince banks that their best customers could be issued cards with the tags, allowing them to be immediately recognized when they enter the bank and given red-carpet treatment.

"If you know quickly who is in the area, you can customize their experience," said Paul McKeown, who heads IBM's global smart-card efforts. McKeown said he was inspired by an experience his mother had in her small town in England, where for years she was banking at the same branch and one day wasn't recognized and was challenged by a new teller.

The technology is moving fastest in retailing, where Wal-Mart Stores Inc. is wielding its market power to push RFID into the supply chain. It has told its top 100 suppliers that by January they are to begin putting tags on cases of products before they are shipped to several Wal-Mart distribution centers in Texas that are testing the system.

Unlike bar codes, which must be passed in front of a scanner, RFID tags can be read remotely by a device in the vicinity, sharply reducing time and labor needed to take inventory and letting stores more quickly recognize when stocks are low. By some estimates, retailers lose 4 percent in sales because they are out of what consumers are looking for.

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