By Michelle Hutchison
From tracking pets to managing inventory at a supermarket, radio frequency identification (RFID) tags are as common to 21st century life as smartphones. The full extent of RFID has not yet been explored fully, with many uses still emerging in the consumer sphere.
RFID technology is often referred to as a ‘smart barcode’, using electromagnetic fields to track and identify objects which have tags or labels attached to them. Unlike a barcode, however, RFID labels do not need to be read in the direct sight of a reader as they can be scanned remotely.
Emerging in the 1970s, RFID has been subject to much growth and improvement, expanding to industries like agriculture and education. Indeed, a 2015 IDTechEx study found that the total RFID market in 2015 was worth US$10.1 billion, increasing from $9.5 billion in 2014 and $8.8 billion in 2013.
The continued growth of RFID technology and its use across different industries highlights its potential to be incorporated in less technology-saturated fields such as the world of fashion and accessories. While it has traditionally been used to help people spend and save money, RFID technology can now be harnessed to track spending and help people reduce their spending.
U.S. credit card debt and consumer spending
Personal finance website finder.com invented the iBag2 using RFID and other technology to help curb impulsive spending. The idea to create such a bag came about after we conducted research on America’s rapidly increasing credit card debt - $960.8 billion as of June 2016 (U.S. Federal Reserve).
A survey we commissioned of 6,838 American adults in May 2016 found that 64% of American credit cardholders (equating to 158.6 million people) make unplanned purchases with their credit cards each month, averaging over seven per month. Deciding that drastic measures were needed to help Americans control their spending, we decided to incorporate smart technology into a programmable, locking handbag to help impulse shoppers.
The iBag2 - a tech solution to impulse buys?
The iBag2 incorporates a variety of technology – from an Arduino Uno microprocessor to GPS and Bluetooth – to help shoppers be more mindful of their spending. Designed to lock out impulse shoppers when they near pre-designated ‘danger spending zones’ with electromagnets and GPS tracking, the bag also uses RFID technology to monitor when users take out and return their wallet to the bag.
With an in-built RFID reader and an RFID card placed in the owner’s wallet, the system reacts to the wallet being taken out of the bag and causes internal LED lights to flash blue and vibration motors in the handle to vibrate, acting as a discreet reminder of spending.
The incorporation of RFID tags into the iBag2 was in response to the ease at which the technology could securely monitor the movements of a wallet or purse. It was also an opportunity to integrate technological developments in the fashion and accessories market. Wearable technology is an emerging and underdeveloped area of the fashion industry, with designers who use such technology in the minority.
The use of discreet technology such as RFID meant the bag is able to reflect current trends and not sacrifice aesthetics in favour of technological ability. By using current technology and incorporating it into a fashionable product, the bag provides another way to encourage people to keep track of their spending.
Who uses the iBag2?
A typical user of the iBag2 is someone who is out of control with their spending; someone who is unable to budget, who maxes out his or her credit cards each month while paying off only a little amount of the balance, and who doesn't keep track of personal spending. The benefit of the iBag2 is not only its physical constraints as a reminder of expenditure, but the initial process through which users must go for the bag to function properly.
The bag requires shoppers to input areas where they are known to spend the most amount of money - what we call ‘danger spending zones’ - as well as times when they shop. This action forces them to go through past bank accounts and not only research past purchases but acknowledge their spending habits. The bag serves not only to remind shoppers in the present moment when they seek to buy an item, but also requires them to assess and re-evaluate their past expenses and if those purchases were necessary.
The creation of a designer handbag with smart technology came about alongside data that found high income earners are more likely to make unplanned purchases. For example, low income earners who make up to $10,000 per year will, on average, have four unplanned purchases per month, while those earning between $175,000 and $200,000 make an average of 18 unplanned purchases per month. By using the iBag2, it is hoped that high-income consumers will be able to better monitor their spending habits and make less impulse buys.
Bringing attention to personal finance and impulse spending
Responding to America’s credit card debt with an out-of-the-box idea, finder.com sought to draw attention to the bigger issue of consumerism and personal debt. While the iBag2 may not go into production - it all depends on consumer response - it is a drastic way to curb impulse spending and highlight the need for more radical ways to combat America’s debt.
What the iBag2 showcases is a business thinking about its brand messaging and coming up with a unique way to combat an issue. The case of finder.com and the iBag2 highlights that businesses should be encouraged to look at different ways technology like RFID can be used in a different way to promote the business.
About the author:
Michelle Hutchison is a Money Expert at personal finance website finder.com.
Michelle is a former journalist and editor, with more than seven years experience in the fintech industry.
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