Why We Love Smart Card (And You Should, Too!)


If you have been to France in the last few years and you had to make a phone call, you probably ended up using TeleCarte, the smart card that France Telecom uses as a calling card. You were probably aware that the little golden stylized spider on it was not just for decoration, but most likely you did not know that that little thing of the size of a credit card was a 16 MHz microprocessor with up to 64 kb of memory (for non-techies, the first IBM PC ran at 4.77 MHz and had 128 kb of memory ­p; but was a bit larger and more expensive!) Production costs for a stored value card such as a TeleCarte are about $0.25. More sophisticated cards cost about $3 to $10 to produce.


What is Smart Card?

A smart card, chip card, or integrated circuit card (ICC) is any pocket-sized card that has embedded integrated circuits. Smart cards are made of plastic, generally polyvinyl chloride, but sometimes polyethylene terephthalate based polyesters, acrylonitrile butadiene styrene or polycarbonate. Since April 2009, a Japanese company has manufactured reusable financial smart cards made from paper.

It also resembles a credit card in size and shape, but inside it is completely different. First of all, it has an inside — a normal credit card is a simple piece of plastic. The inside of a smart card usually contains an embedded microprocessor. The microprocessor is under a gold contact pad on one side of the card. Think of the microprocessor as replacing the usual magnetic stripe on a credit card or debit card.

Smart cards differ along four main dimensions:

  • Memory: from 1 to 16 kb (there are currently prototypes with 64 kb);
  • Processor speed: from 4 to 16 MHz;
  • Interaction: physical contact, proximity (near-contact, but no wearout), and radio;
  • Software: card operating system and installed applications.

smart card
smart card module

Smart cards can be used with a smart-card reader attachment to a personal computer to authenticate a user. Web browsers also can use smart card technology to supplement Secure Sockets Layer (SSL) for improved security of Internet transactions. Visa’s Smart Card FAQ shows how online purchases work using a smart card and a PC equipped with a smart-card reader. Smart-card readers can also be found in mobile phones and vending machines.

How Smart Card Work?

Smart cards replace the magnetic storage unit of the credit card with an embedded microprocessor to store information. Since credit cards first appeared in the United States and became popular in Europe just recently, extensive mainframe networks would have needed to be built in order to create the secure environment for the use of credit cards. Albeit, such infrastructure never developed in Europe.

So in order to compensate for this, smart cards have been developed. A smart card doesn’t ask for computer security, since all the security required is embedded in the microprocessor. When a computer communicates with the card, the microprocessor enforces the access to retrieve data from the card’s memory banks.

What are the Uses of Smart Cards?

Smart cards currently exist for a vast array of applications. However, the expected growth in the industry will not be due merely to growth in these segments, but also to the addition of the Internet and electronic commerce with their myriad of uses.

Current Applications
A smart card, as mentioned above, is a portable computational device with data storage ability. As such, they can be a very reliable form of personal identification and a tamper-proof, secure information repository. The main possible applications of smart cards are the following:

Outside of the United States there is a widespread use of payphones equipped with card readers rather than ­p; or in addition to ­p; coin recognition and storage. The main advantages are that the phone company does not have to collect coins, and the users do not have to have coins or remember long access numbers and PIN codes. Smart cards have the further advantage over magnetic stripe cards of being reloadable, and allowing advanced features like phone banking, automatic memory dialing and on-line services.

Mobile Communications
Smart cards are used as identification device for GSM digital mobile phones. The card stores all the necessary information in order to properly identify and bill the user, so that any user can use any phone terminal.

Banking & Retail
Smart banking cards can be used as credit, direct debit or stored value cards, offering a counterfeit- and tamper-proof device. The intelligent microchip on the card and the card readers use mutual authentication procedures that protect users, merchants and banks from fraudulent use. Other services enabled by smart cards are advanced loyalty programs and electronic coupons.

Electronic Purse
A smart card can be used to store a monetary value for small purchases. Card readers retrieve the amount currently stored, and subtract the amount for the goods or services being purchased. Groceries, transportation tickets, parking, laundromats, cafeterias, taxis and all types of vending machines are only some of the purchases that often do not reach amounts to justify the hassle of using a credit card (a cash card reader does not require a permanent phone connection with a host computer). Radio-read smart cards will allow the free flow of people through transportation systems, avoiding the need of ticketing machines or validation gates.

Health Care
Smart cards allow the information for a patient’s history to be reliably and safely stored. Health care professionals can instantaneously access such information when needed, and update the content. Instant patient verification allows immediate insurance processing and refund. Doctors and nurses themselves can carry smart card-based IDs that allow secure, multi-level access to private information.

ID Verification and Access Control
The computational power of smart cards allows running mutual authentication and public-key encryption software in order to reliably identify the bearer of the card. For higher security needs, a smart card is a tamper-proof device to store such information as a user’s picture or fingerprints. Smart cards can be used also for network access: in addition or in alternative to user IDs and passwords, a networked computer equipped with a smart card reader can reliably identify the user.

It can also applied in different things like:

  • Credit cards
  • Electronic cash
  • Computer security systems
  • Wireless communication
  • Loyalty systems (like frequent flyer points)
  • Banking
  • Satellite TV
  • Government identification

Magnetic stripe technology remains in wide use in the United States. However, the data on the stripe can easily be read, written, deleted or changed with off-the-shelf equipment. Therefore, the stripe is really not the best place to store sensitive information. To protect the consumer, businesses in the U.S. have invested in extensive online mainframe-based computer networks for verification and processing. In Europe, such an infrastructure did not develop — instead, the card carries the intelligence.

Advantages of Smart Card

smart card advantage

The first main advantage of smart cards is their flexibility. Smart cards have multiple functions which simultaneously can be an ID, a credit card, a stored-value cash card, and a repository of personal information such as telephone numbers or medical history. The card can be easily replaced if lost, and, the requirement for a PIN (or other form of security) provides additional security from unauthorised access to information by others. At the first attempt to use it illegally, the card would be deactivated by the card reader itself.
The second main advantage is security. Smart cards can be electronic key rings, giving the bearer ability to access information and physical places without need for online connections. They are encryption devices, so that the user can encrypt and decrypt information without relying on unknown, and therefore potentially untrustworthy, appliances such as ATMs. Smart cards are very flexible in providing authentication at different level of the bearer and the counterpart. Finally, with the information about the user that smart cards can provide to the other parties, they are useful devices for customizing products and services.

Other general benefits of smart cards are:

  • Portability
  • Increasing data storage capacity
  • Reliability that is virtually unaffected by electrical and magnetic fields.

In general, Smart Card can help you in several ways. With the development of the new technology, constant evolution and adaptation, Smart Card can help us survive and live a life here on earth. So what’s your insights about Smart Card? I’m open to talk about it.

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