US engineers have developed a way to embed radio frequency identification chips on to paper that they say is quicker, cheaper and offers wider applications than current methods.
The technique could be used to prevent fraud as well as provide a new meaning to the term 'paper trail'.
The process uses lasers to transfer and assemble the chips on paper.
Such smart paper could be used for banknotes, legal documents, tickets and smart labels, the team said.
The findings are due to be presented at the Institute of Electrical and Electronics Engineers conference on RFID in Orlando, Florida.
Cheaper and faster
Some RFID-enabled paper is already on the market but the chips are much thicker, resulting in either bulky paper or a bump on the surface that would mean such paper could not be printed.
The process developed by the team at North Dakota State University is known as Laser Enabled Advanced Packaging (Leap).
Firstly the chips are thinned down using a plasma etcher.
The patent-pending technology uses a laser beam's energy to precisely transfer the ultra-thin chips. Antennas are also embedded using the same method.
Head of the project Prof Val Marinov said that the process is twice as fast as current methods of manufacturing and is cheaper because there is less material used and the equipment is less expensive.
He sees huge potential for the technology.
"About ten years ago the Bank of Japan and the European bank signalled their intention to develop such technology but they aren't there yet," he told the BBC
"I believe our scheme is the first to demonstrate a functional RFID tag embedded in paper."
As well as being used on banknotes and other documents to prove authenticity, the process could also be used in other areas, such as reading train or concert tickets.
It could also be used to improve the tracking of paper documents.
The team is currently looking for commercial partners.
"The technology needs to leave the lab and find a place in industry," said Prof Marinov.