The term geo fencing refers to technology that uses GPS coordinates or RFID signals to draw virtual boundaries in space and to trigger certain actions based on boundaries. This virtual border is called a geofence, which is a portmanteau word consisting of geography and a fence. Actions triggered by the user when a geofence is crossed can result in sending push messages, emails, texts, or in more complex applications, which sometimes include programming instructions.

Both objects and people can be found in geofences. If a receiving device such as a smartphone or microchip in a car is within the predetermined geofence range, the next action is triggered by an exchange of signals between the receiver and transmitter. The recipient receives a message, for example, that a special offer was made to him or that cars with microchips are not allowed to cross national borders. Geofencing is technically based on a GPS, but can also be implemented using the RFID chip and M2M communications.