Radio Frequency Identification or RFID can be defined as a technology which uses electromagnetic radio-frequency to identify tags when near to a reader. The tags are made up of an antenna in order to pass information to the reader. However, RFID cannot be reduced to just one frequency or technology, since many types of tags or chips exist with different power supply sources and communication methods. Such tags can be attached to any object to automatically identify and track the object.

RFID tags can be broadly classified into two categories namely, Active Tag and Passive Tag. The differences between the two tags are as follows: As the name entail passive tags have no internal power supply source, and use energy supplied from an RFID reader. The antenna receives energy from the reader, and then the energy is converted into an RF wave. The antenna draws energy from the RF wave and moves along the tag to the IC, in turn powering the chip which then responds back by generating a signal to the RF system. Also, there are different frequencies on which the passive tags work namely, low frequency, high frequency, and ultra-high frequency. The read range and application options depends on the frequency range and other factors. Passive tags are used for a wide range of applications such as file tracking, smart labels, access control, etc. Passive tags are priced lower, and thus economical to use.

On the other hand, active tag is battery powered, and thus broadcasts signal continuously. The battery lasts for almost 3 to 5 years, however once the battery fails, the tag should be replaced. Active tags have a much longer read range compared to passive tags. The two commonly used active tags are beacons and transponders. Beacons are commonly used in the oil and gas industry, whereas transponders being battery efficient are commonly used in toll booth payment systems and access control systems.

Active tag works on two frequencies, 915 MHz and 433 MHz. Industries usually prefer working on 433 MHz frequency, since they get a longer wavelength to work also in materials like metal and water that are non-RF friendly. However, depending upon environmental considerations to user preference the frequency to use may vary for most applications.  Due to the increased functionality and features the costs for active tags is high, however the return of investment outweighs the costs.