Smart Card : Evolution for a Smarter World

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Smart Card or Chip card technology is fast becoming commonplace in our culture and daily lives. Like other technologies, the Smart Card Technology is reaching on heights in the world. Smart Card is basically a type of chip card or a plastic card embedded with a computer chip that stores and transacts data between users. The card data is transferred via a reader that is part of a computing system. Smart card enhanced security systems are in use today throughout several key applications, including healthcare, banking, entertainment and transportation.

To various degrees, all applications can benefit from the added features and security that smart cards provide. Introduction of smartcard technology has found its way to a number of proprietary financial applications like credit/debit card transit application, Personal Identification card, loyalty card for purchasing applications, etc.

With the introduction of high ended smart card like java card asSIM card, even mobile phone is also equipped with payment applications.

The smart cards offer more security and confidentiality than the other kinds of information or transaction storage. Moreover, applications applied with smart card technologies are illustrated which demonstrate smart card is one of the best solutions to provide and enhance their system with security and integrity.

The smart card is the latest additions to the world of information technology. Similar in size to today’s plastic payment card, the smart card has a microprocessor or memory chip embedded in it that, when coupled with a reader, has the processing power to serve many different applications.

As an access control device, smart cards make personal and business data available only to the appropriate users. Smart cards provide data portability, security and convenience.

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 of Smart Cards


A smart card, is a very reliable form of personal identification and a tamper-proof, secure information repository. Smart cards were first introduced in Europe thirty years ago, as a storage value tool for payphones to prevent theft.

Since then, smart card technology has advanced, and people have created inventive ways to use them, including record keeping which replaced paperwork and the tracking of credit purchases. In the United States, for example, consumers have been using smart cards for everything from buying groceries to visiting libraries to attending movies. We have firmly integrated smart card technology into our daily lives, which negates the need to carry cash on person.

Several states in the US & Europe have simplified things by having chip card programs for government applications that range from electronic benefit transfers to traffic departments. Several industries have also implemented the technology of smart cards in their products, such as TV-satellite decoders and GSM digital cellular phones.

The main possible applications of smart cards are the following:

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 and is being used currently 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.

Schools

Companies like HID, Edsys, Child Safety India, SkoolSmart, are working on the Student Tracking Smart  Cards. These smart cards are prominent for parents to get real time information about their kids and their vehicle. They can track their kid’s vehicle location. Automated SMS alerts are sent to the parents if their kids are in any sort of danger. Students can also use the same smart cards to purchase food items from their school canteens. Apart from this, parents can also pay the school fees using these smart cards. Students can also mark their attendance, issue/return books to libraries using these smart cards, and also they can purchase books, magazines and the parents can get every detail as a statement of the purchased items.

Advantages of Smart Cards

It is estimated that there are more than 10 billion devices in the world that use smart card technology. Smart card technology has brought plenty of new benefits, both through the use of a contactless smart card and a contact smart card.

  • Smart Cards are flexible to provide authentication.
  • Smart Cards are capable of storing relevant information like medical history and telephone numbers.
  • Smart Cards could be replaced, if lost by the bearer.
  • The PIN of the Smart Card is no use of any other person than the bearer himself.
  • Smart Cards enables the users to access information without need for online connections.
  • Smart Cards are useful 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.

Smart Cards and Electronic Commerce

Smart cards are turning out to be a fundamental piece of the transformation of retailing into electronic commerce. The impressive growth of the Internet is making electronic shopping at least a real possibility, if not a habit, among computer users. However, the business model used in current electronic commerce applications still cannot enjoy the full potential of the electronic medium. Moreover, concerns about the reliability of an invisible counterpart and about the safety of the Internet for credit card information increase the wariness and thereby limit the use of the electronic shopping on the part of customers.

Of the estimated 360 billion payments that took place in the United States in 1995, approximately 300 billion could not have taken place using the existing electronic media. Such transactions involved micro-payments ­p, i.e. payments for less than $10 ­p, which are virtually outside of the electronic arena for lack of a payment method compatible with such low amounts. Credit cards or checks are simply too expensive to use for micro-payments, and the e-cash currently being experimented on the World Wide Web does not seem to have the characteristics to appeal to shoppers. For this reason, smart cards could be a fundamental building block of widespread use of electronic commerce, since they are an instrument to pay at a low cost for transactions involving small amounts of money.

Finally, smart cards are a key technology enabler for financial institutions. The processing power, the portability and the interactive properties of smart cards will constitute the basis for a revolution in the relationship between consumers and banks. PC-based home banking and phone banking will give way to card banking: a phone equipped with a smart card reader will be all that is needed for any kind of transaction.

RF enabled Smart Cards

RF-enabled smart cards, use RF technology, but, by design, operate at a short range and support a wide variety of security features for critical applications. This technology is also referred to as “contactless smart card technology.” RF-enabled contactless smart cards comply with international standards for contact and contactless smart card technology and implement security features to protect payment, access and identity applications.

The future of smart cards 

The future of smart card technology is looking positive and bright. Smart card technology is also getting attention from the fleet management sector, where RFID is already being installed in rental cars. The idea is that a rental car could be parked on the street corner and is accessed simply by presenting an RFID-enabled card to a reader installed in the window screen. With HID technology, HID Global’s partners are working with some major car rental companies interested in leveraging the benefits of this technology to streamline the management of their fleets.

The scope for smart card technology to improve access control and increase efficiencies and convenience is virtually unbounded. As we continue to search for ways to run our busy lives more safely and smoothly, it seems likely that the potential for smart cards to help us do just that will be limited only by our imagination.

Major Key Players in the Smart Card Market

According to Stratistics MRC, the Global Smart Card Market is estimated to be $7.4 billion in 2015 and is expected to reach $13.1 billion by 2022 growing at a CAGR of 8.5% from 2015 to 2022. Factors such as increasing demand for secure & reliable payments, technology advancement, rising number of mobile phone subscribers and increasing penetration of mobile phones in emerging economies are driving the market growth.

The key players in the global smart card market are Renesas Electronics, Fujitsu Ltd., Gemalto NV, Infineon Technologies AG, Stmicroelectronics N.V., NXP Semiconductors NV, Texas Instruments, Inc., etc.

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