The electronic tags, which are currently being tested by BA staff before being made available to some passengers later in the year, could enter service with passengers in 2014.
The BBC reports that flight information can be transmitted to the tag via the ticket holder's smartphone, using data from the airline app stored after digital check-in. Currently, operators print off individual paper tags for every bag checked in before each flight.
"[The e-tag] is more expensive, but ultimately it is re-usable - you would acquire and use it multiple times," says Lewis Freeman, an industrial designer from Designworks, which has worked on the electronic tag casing.
"The life of the product is up to five years. I imagine the technology would move on faster than the tag would need replacing."
Despite various changes to try to speed up airport check-in procedures, the process of dropping off luggage has remained time consuming, a British Airways representative told the BBC.
"The old security questions such as, 'Did you pack your bag yourself?' are no longer a legal requirement, but the idea of queuing to check in your bag has never gone away," he told the BBC.