RFID Faces “Growing” Challenges

Now that Radio Frequency Identification (RFID) is performing at the pump, creators of this expanding technology are ready for the convenience store. Texas Instruments’ Jim Bucklar describes what engineering hurdles have been overcome to make the extension a success.

Radio Frequency Identification (RFID) technology has certainly captured the petroleum industry’s attention over the last several years. First rolled out by Mobil Oil Corporation as part of its Speedpass™ pay-at-the-pump system, RFID is now being used by approximately 2 million consumers at more than 3,500 service stations across North America.

RFID uses radio signals to communicate data in a wireless fashion. The heart of RFID technology is a small transponder that can be embedded into a keytag or vehicle tag, laminated into an ID badge or virtually any other product. A reader integrated in the pump transmits a signal to the transponder (tag) that answers back in milliseconds with a unique identification code. This unique code has been linked to a consumer’s credit card of choice in a host database. The credit card is then authorized for payment and the pump is activated and ready for fueling.

In-store transactions
With the commercial acceptance of RFID by consumers, petroleum retailers will be expanding their use of RFID technology as a payment option. In fact, Mobil has already started pilot testing the VeriFone RF250 customer unit; this is an in-store payment terminal, based on the VeriFone Everest customer terminal. It is equipped with RFID for in-store transactions, as well as with a magnetic card reader for credit and debit transactions. RFID-ready car washes, ATMs, fast-food counters, and vending machines are expected to follow.

To expand RFID use beyond the pump, retailers and suppliers need to build a seamless RFID infrastructure. This article focuses on several technical issues that need to be considered as RFID moves into all areas of retailing operations. These issues are three fold:

  1. address the problems of unintentional readings and electro-magnetic interference;
  2. provide interoperability standards across all point-of-sale platforms including application software, terminal hardware, and central databases; and finally,
  3. provide the highest level of transaction security for customers.

Ups and downs of wireless frequencies
To explore the challenges in developing system solutions for wireless communication technology, a short discussion on radio frequencies is necessary. Frequencies assigned to RFID transmissions are limited to bands in various countries and regions defined by the International Telecommunications Union (ITU). The ITU is an international regulatory body that licenses specific frequencies for use by wireless transmissions worldwide.

Low frequency (LF) systems generally operate below 500 kHz. A graph of a low frequency signal is seen as a series of long waves. Compared to high frequency (HF) designs, wireless design in the lower frequencies is more economical and provides a shorter signal distance. This shorter signal distance allows for clearer definition of read zones. Low frequency design, however, tends to have slower data exchange speeds and a more limited read range than high frequency designs.

HF systems operate above 1 MHz (the UHF and Microwave bands). A high frequency signal is seen as a series of peaks and valleys. HF offers faster speeds to accommodate complex data transfers, such as financial transactions. HF is also less prone to interference (noise) from surrounding equipment than LF.

In addition, HF RFID systems are typically more expensive than LF, usually require battery-powered transponders (tags) and can have a higher reflectance property than an LF system. This higher reflectance is of special concern where RFID is used in confined areas, such as inside a convenience store. HF is also prone to being blocked by obstructions, such as the metal on your key chain, or even the human hand.

When selecting RFID frequencies, each one provides strengths and weaknesses that must be considered when engineering an RFID system solution. For example, Mobil provides its customers with a low frequency keytag (transponder) that operates at 134.2 kHz. Designed by Texas Instruments’ TIRIS group, this keytag provides a cost-effective and reliable solution for Mobil. Mobil provides its Speedpass transponders to the consumer free of charge.

With the Speedpass keytag, Mobil’s customers wave their Speedpass tag three to six inches away from the designated point on the fuel dispenser. As we mentioned before, electronic interference (or noise) can be a problem in LF frequency systems. The engineers at TIRIS designed around this problem by increasing the signal-to-noise ratio within the three-to-six-inch read range—exactly where the consumer is holding his or her Speedpass keytag.

The reliability of data communications between the keytag and pump reader is critical at this distance. By enhancing the signal-to-noise ratio, TIRIS provided the ideal wireless noise reduction, thus ensuring the accuracy of data communications.

As part of the Speedpass roadmap, Mobil also required a vehicle-mounted RFID transponder (tag). This second transponder provides a complete hands-free gasoline purchasing option to the consumer. TIRIS engineers produced a dual frequency tag that provides the same LF downlink (from the reader to the transponder) found in the Speedpass keytag (134.2 kHz), with an ultra high frequency (UHF) uplink (903 MHz). The UHF uplink signal provides fast and reliable data transmission.

The LF downlink ensures that signals stay within a well-defined read zone so no accidental readings occur. Accidental readings were a potential concern if, for example, a consumer with a vehicle-mounted transponder pulled near a pump to ask directions or for convenience store purchases. With the well-defined read zone provided by the LF downlink design, Mobil’s concern about accidental readings was eliminated.

How an RFID System works

Building a standard
The problems of unintentional readings and electromagnetic interference are ever-present in the wireless world. We have already discussed one example of how this problem was solved in the design of the vehicle tag. This issue also presents design challenges as RFID payment options expand from the pump to the checkout counter.

When the engineers at TIRIS began working on the design of RFID applications for petroleum retailers, they developed a Quality Functional Deployment (QFD) plan. “With the QFD we were challenged to design a system that would work for the consumer,” says George Holodak, systems analyst for Texas Instrument’s TIRIS, “rather than just what an engineer could come up with.”

Customer research by TIRIS and others showed consumers in support of an in-store RFID application that offers the same speed, convenience and security provided at the pump. Customers wanted assurances that their RFID tag would not be read accidentally as they passed by.

Relevant to RFID technology, most buying transactions in a convenience store are concluded at a cash register or magnetic card reader, within a confined area. Pinpad terminals and other hardware all typically mount within a foot of the cash register. The consumer swipes his credit card, or enters in his debit/ATM pin number, and the transaction is complete. By incorporating the same signal-to-noise ratio enhancements used at the fuel pump, petroleum consumers will have the flexibility of using their RFID tag to pay for general merchandise inside the store.

“In the design process, we made sure that the consumer had to present his RFID tag in close proximity to the credit card reader,” adds Holodak. “This strictly defined read zone provides the same security present at the pump, inside the store. By strictly defining the read zone, we were able to eliminate the concern of accidental readings, yet keep the ease-of-use oil companies demand.”

The LF system (134.2 kHz) used by the RFID tag was really the only commercially viable option available. “To integrate an HF system inside the store would have been very difficult and costly,” says Holodak. “The reader would have to have been positioned outside of the point-of-sale hardware, and therefore we never could have met pricing targets acceptable to the oil companies. After all, integrating RFID into a $10,000 pump is one thing. Putting a commercially viable RFID system into a low cost credit card reader is another.”

Another factor to consider with an HF system is that from an engineering point of view, the inside of a convenience store is an electromagnetic nightmare,” adds Holodak. “There are major signal reflectance issues. Even the fluorescent lights can cause problems.”

Point of sale integration
A traditional point-of-sale process includes several steps. First, a credit card reader captures the transaction data (credit card number) and sends the information to the central network inside the store. The signal is then transmitted via telephone lines or satellite to a central data location. If the dealers’ proprietary card is used in the transaction, the transaction is processed at this stage and approved. If another card is used, the data is sent via a high speed data communications pipeline to the appropriate banking center for processing.

This high speed data line carries an enormous amount of bandwidth and channels a multitude of transactions at once. The rule of thumb in credit card processing is: the more transactions processed at once, the smaller the transaction fee. Smaller retail establishments, which must rely on a direct dial connection to the bank, pay a higher transaction fee for processing.

“Making pinpad terminals and credit card readers RFID-ready is the easy part,” says George Holodak. “Our micro reader mounts directly onto the circuitry of the existing hardware with a minor retrofit. Putting a new technology into an established infrastructure is the real challenge.”

When a franchised company wants to adopt a new technology, infrastructure integration is always a concern for the simple reason that different stores use different hardware. “Taking new technology and integrating it across the board is not done overnight,” says Susy d’Hont, TIRIS marketing manager. “You need to have a top level understanding of your infrastructure requirements, from hardware to system software from a data communications standpoint.”

Kiran Gandhi, vice-president of Mag-Tek Inc., a manufacturer of magnetic card readers, adds “The easiest way to integrate new technology into existing infrastructure is to find a shared data communications port. This common denominator allows a relatively easy interface to new technology across all hardware platforms.”

When RFID is added as a payment option to the point-of-sale, the RFID reader integrated within the pump or credit card reader captures the consumer’s unique identification data. The network then looks up this number in its database, finds out which credit card the consumer has selected for payment, and then sends the transaction along for processing and approval. “RFID tags do not broadcast credit card information,” asserts d’Hont. “When a transponder is activated by the reader, all it does is provide the host system with the consumer’s identification number, along with a digital security signature.”

Better security
It seems as soon as engineers find a way for technology to work, the criminal-minded find a way to exploit it. As nearly impossible as this is with RFID, this unfortunate fact was always in the minds of Mobil’s management. “Eliminating the potential for fraud with Speedpass was always a concern for Mobil,” reports Randy Trost, Mobil Speedpass project manager. “We required a system that could not be cloned or otherwise manipulated for credit card fraud. With digital signature technology, the safest way to pay just got safer.”

The RFID transponders that were designed feature a digital signature encryption protocol with a challenge/response authentication. The reader sends out a 40-bit random number code to the transponder. Both the reader and transponder then process this number using a secret encryption key in an algorithm calculation.

The transponder returns just 24 bits as an answer, which the reader compares to its own calculations in order to verify the response. This technique makes it extremely difficult, if not impossible to duplicate the transponder, or the secret encryption key. And, even if the key were duplicated, it would only be valid for one tank of gas, making it a very expensive tank of gasoline for a would-be criminal.

FOCUS on the future
RFID is here to stay. Petroleum retailers can harness RFID not only as a payment option, but to create customer loyalty and expand market share. Complete hand-free purchasing, self-checkout, and even RFID-ready vending machines are not far away.

“The business is no longer about pumping gasoline alone. It’s about offering a compelling mix of food, general merchandise and services in addition to gasoline,” says Tom Agan, of Kurt Salmon Associates. “General merchandise purchases are now the single highest area for profitable growth in petroleum retailing and retailers are constantly investing in new tools to keep up and maintain a competitive advantage.”

As RFID moves forward, cross-industry and cross-marketing benefits will certainly accrue as consumers come to rely on a hands-free automatic payment system. Yet, a lack of practical standards is the last hurdle to full-blown market adoption. RFID standards do exists—in other industries.

Texas Instruments TIRIS group and Philips Semiconductors recently announced an agreement to standardize the communications protocol of their RFID line of smart label products to 13.56 MHz. This proposal is currently pending before the International Standards Organization (ISO), an international group of industry experts that set worldwide technology standards.

With smart cards still facing market acceptance challenges in the United States, RFID remains the only fully deployed automated payment system in place in the petroleum industry. As consumers see the value in RFID, and petroleum retailers create a value for its use, we will wait eagerly for a call for standards across all markets and businesses.

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