A German Company Unveils a Checkout Buster That Relies on Breakthroughs in RFID Scanning

As merchants and their technology partners continue to develop technology to ditch the familiar checkout, a German entrant on Monday demonstrated a system that would use radio-frequency identification to charge customers as they walk out with their goods.

The system, dubbed “payfree,” involves an app that consumers would install in their mobile devices. When they walk out of payfree-enabled stores, special scanners would read RFID tags on the merchandise and charge the app, which users would have pre-authorized to pay for the goods. The app also generates a receipt, which could also be sent via email, according to a release from the developer, VR Payment, a unit of Volksbanken Raiffeisenbanken Cooperative Financial Network, a brand used by cooperative banks in Germany.

The company says it had to solve a couple of problems to develop payfree. One has to do with widening the range of RFID scanning so that tags on items being carried by multiple customers out of the exit area of a store could be read. This avoids the need for close inspection by a cashier using a hand-held reader, according to VP Payment. “For the first time, it is now possible to scan and process product information from goods in the basket or shopping bag without having to use a manual interface,” the company’s release says.

The other issue has to do with the cost of RFID tags, which the company says are expensive enough in conventional applications to limit their use to high-value goods. By enlisting the help of a Dusseldorf-based financial-services software partner, BMS Consulting, the payfree project was able to reduce the cost of the tags by using nanotechnology to print them. 

VR Payment’s announcement does not provide further details about the method, but the cost saving is apparently significant. The company says prices for RFID tags are expected to halve over the next three to four years anyway, but even this reduction would not have sufficed to make payfree practical. “With payfree, we have created a primary example for the development of next-generation payment products,” said Nino Raddao, a representative of BMS Consulting, as quoted by VR Payment’s release.

As with other efforts to do away with checkouts and payment lines, such as Amazon.com Inc.’s Amazon Go , the payfree project is aimed at merchant savings through the reduction of checkout infrastructure and the need for cashiers, VR Payment says. “We make sure that our customers’ employees can focus on what really adds value in retail: addressing the customers and their needs,” said Carlos Gómez-Sáez, chief executive of VR Payment, as quoted in the Monday release.

The payfree system is being demonstrated this week at EuroShop, a major retail trade exposition in Dusseldorf. No information was immediately available on a commercial introduction.