A system and method for providing a fuel dispenser with radio frequency customer identification capabilities. The system and method determines whether a transponder containing customer identification data is within range of a dispenser, the dispenser requiring activation by the customer to initiate a transaction and including a reader associated therewith for emitting radio frequency signals within the dispenser range, and for receiving customer identification data from the transponder responsive to the emitted radio frequency signals received by the transponder. When the transponder is within range of the dispenser, an in-range indication is provided to the customer. A determination is made whether the dispenser has been activated by the customer following a determination that the transponder is within the dispenser range. Upon activation of the dispenser following the determination that the transponder is within the dispenser range, the customer identification data received by the reader is associated with a transaction at the activated dispenser, whereupon the transaction at the activated dispenser is permitted and charged to the customer according to the customer identification data. The system easily retrofits onto an existing, conventional fuel dispenser.