An RFID tag works by transmitting and receiving information via an antenna and a microchip — also sometimes called an integrated circuit or IC. The microchip on an RFID reader is written with whatever information the user wants.
There are two main types of RFID tags: battery-operated and passive. As the name suggests, battery-operated RFID tags contain an onboard battery as a power supply, whereas a passive RFID tag does not, instead working by using electromagnetic energy transmitted from an RFID reader. Battery-operated RFID tags might also be called active RFID tags.
Passive RFID tags use three main frequencies to transmit information: 125 – 134 KHz, also known as Low Frequency (LF), 13.56 MHz, also known as High Frequency (HF) and Near-Field Communication (NFC), and 865 – 960 MHz, also known as Ultra High Frequency (UHF). The frequency used affects the tag’s range. When a passive RFID tag is scanned by a reader, the reader transmits energy to the tag which powers it enough for the chip and antenna to relay information back to the reader. The reader then transmits this information back to an RFID computer program for interpretation. There are two main types of passive RFID tags: inlays and hard tags. Inlays are typically quite thin and can be stuck on various materials, whereas hard tags are just as the name suggests, made of a hard, durable material such as plastic or metal.
Active RFID tags use one of two main frequencies — either 433 MHz or 915 MHz — to transmit information. They contain three main parts, including a tag, antenna, and interrogator. The battery in an active RFID tag should supply enough power to last for 3-5 years. When it dies, the unit will need replaced, as the batteries are not currently replaceable. There are two main kinds of active RFID tags: beacons and transponders. Beacons send out an information ping every few seconds, and their signal is readable from several hundreds of feet away. Because they are sending out data so frequently, their battery tends to deplete quicker. Like passive RFID tags, transponders require the use of a reader to transmit information. When within range of one another, a reader first sends out a signal to the transponder, which then pings back with the relevant information. Because they only activate when near a reader, transponders are much more battery-efficient than beacons.

Since an active RFID is constantly sending out a signal, it makes an excellent choice for those looking for up-to-the-minute live tracking, such as in tolling and real-time vehicle tracking applications. They are an expensive product, but they do offer a long read range, which may be preferred depending on their application.
Passive RFID tags are a much more economical choice than active RFID tags, and cost around 20 cents each. This makes them a popular choice for supply chain management, race tracking, file management, and access control applications. While a passive RFID tag does not require a direct line of sight to the RFID reader, it has a much shorter read range than an active RFID tag. They are small in size, lightweight, and can potentially last a lifetime.
Since active RFID tags feature a larger, more rugged design than passive RFID tags, they are better suited for applications where durability is required. They are frequently used in toll payment transponder systems, cargo tracking applications, and even in devices used to track people.