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Radio Frequency Identification (RFID) systems have already been widely applied in industry supporting supply chain management and inventory control. While the continuation increasing applications of RFID in our daily life, RFID also creates new security and privacy problems to individuals and organisations. This paper focuses on the challenges on security and privacy of low-cost RFID. The security and privacy challenges are analysed after a brief introduction of various RFID systems and their associated operations. A proposal to protecting security and privacy of customers, as a solution of the challenge for low-cost RFID systems is designed. Finally, comparisons to related works of the proposal are described.