Radio frequency identification (RFID) has gained a lot of importance regarding its capabilities to not only track & trace objects but also to provide valuable information exploited in diverse industrial sectors and vertical activities. A basic RFID system consists of a reader (base station) and a transponder. Depending on the application, an information system could be mandatory to not only record transponder data, but also to analyse this data and to offer meaningful insights for decision makers looking for a tangible return on investment (ROI) and driving innovation. Although RFID is a set of technologies as defined by MIT into five classes, most people and even industrials confuse RFID with the first class denoted by class 0 as this category of system is widespread in real life and associated with read only transponders. And when it comes for integrators to develop an RFID solution, they even face problems regarding identification rate and object misreading as they did not select the appropriate system. This is why raising awareness of RFID technologies is more than necessary to understand RFID basics, unlock its innovation potential and to provide best practice to select the right system. This paper discusses RFID opportunities, challenges within smart cities innovation context, and provides comprehensive guide to choose the right RFID technology based on key metrics.