When a passive RFID tag is passed near a reader, it transmits its onboard data to the reader.

The economics of RFID are becoming more attractive as the size and cost of tags drop, battery life increases, and the technology becomes standardized. Today:

• Passive RFID tags are small and inexpensive (about 50 cents), making them suitable for many applications. However, to be read, the tag must be placed in close proximity to a reader, meaning some human action is usually required.
• Active tags are about the size of a pager, include a battery (enabling the tag to emit a radio frequency signal), and cost $10 each. They are suitable for tracking larger objects or people in a sprawling facility. Battery life is a potential maintenance issue.
• Barcode applications share much in common with passive RFID but are lower in cost due to their wide deployment and a per-tag cost of about one cent.