Smart Cards

Smart cards are credit card-sized plastic cards that contain relatively large amounts of information in an imbedded micro-chip. Smart cards differ from magnetic stripe cards in two ways: the amount of information that can be stored is much greater, and some smart cards can be reprogrammed to add, delete or rearrange data.

There are several terms used to identify cards with integrated circuits embedded in them. The terms "chip card," "integrated circuit card", and "smart card" really all refer to the same thing. There are two types of smart card. The first is really a "dumb" card in that it only contains memory. These cards are used to store information. Examples of this might include stored value cards where the memory stores a dollar value which the user can spend in a variety of transactions. Examples might be pay phone, retail, or vending machines. Another example of a "dumb" card is the memory that is plugged into a Personal Computer (PC Card - used to be called PCMCIA).

The second type of card is a true "smart" card where a microprocessor is embedded in the card along with memory. Now the card actually has the ability to make decisions about the data stored on the card. The card is not dependent on the unit it is plugged in to to make the application work. A smart purse or multi-use card is possible with this technology. Smart cards are the technology of choice when fairly large databases must travel with an individual or an object. For instance, a version of smart card technology is used to record service histories for automobiles. The data travels on a small tag on the owner's key ring. It can be reprogrammed, updated and accessed whenever the vehicle is serviced with any of that company's dealers.

As there is a microprocessor on the card, various methods can be used to prevent access to the information on the card to provide a secure environment. This security has been touted as the main reason that smart cards will replace other card technologies. The microprocessor type smart card comes in two flavors - the contact version and the contactless version. Both types of card have the microprocessor embedded in the card however the contactless version does not have the gold plated contacts visible on the card. The contactless card uses a technology to pass data between the card and the reader without any physical contact being made. The advantage to this contactless system is there are no contacts to wear out, no chance of an electric shock coming through the contacts and destroying the integrated circuit, and the knowledge that the components are completely embedded in the plastic with no external connections. The disadvantage to this is that there are some limitations to the use of the smart card.

Smart cards are not new, the first patent was filed in France in 1974 and the first cards were used in France in 1982. The technology was rapidly accepted in Europe because the high cost of telecommunications made on-line verification of transactions very expensive. The smart card provided the mechanism to move that verification off line, reducing the cost without sacrificing any of the security. In the United States, telecommunication costs have always been low compared to other countries. This meant that the impetus to implement smart cards has taken longer to reach the momentum needed.

The possible benefits of the acceptance of smart card technology depend on the application in use. However, the ability to move large amounts of data with little or no increase in the security of the data will lead to many new applications being created that we haven't even begun to think about.

There are many smart cards in use today throughout the world. In 1993 approximately 330 million cards were produced by the major manufacturers. Of this number only about 12% were true "smart cards", the rest were simple memory cards. This was projected to grow to approximately 580 million cards in 1995 (about 10% being "smart") and 990 million in 1996 (approx. 10% "smart"). Of the cards issued in 1993 approx. 260 million were used in phone systems; 25 million in health applications; and 23 million in banking. The rest were used in various small projects and trials.

The smart card future is extremely bright. Many changes are happening in the electronics world today that will increase the capabilities of the technology. As the state of the art in manufacturing integrated circuits improves, we get smaller ICs which run on lower voltages, giving us less power requirements and the ability to include more memory of processing power. We also need to see an increase in the speed that a card can be addressed. Currently the initialization of a smart card can take several seconds and even a single transaction may take longer than is tolerable under some circumstances.

Reprinted with permission from AIM, Inc.
www.aimglobal.org

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