It is easy to confuse smart cards with credit cards as they are remarkably similar in terms of size and shape, however the manner in which they work is completely different. A normal credit card is a simple piece of plastic where as a smart card actually has an inside which contains a small embedded microprocessor. This microprocessor is found under a gold contact pad on one side of the card and can be thought of as equivalent to the magnetic stripe that is found on the credit card.
Smart cards are widely used in both Europe and America, however they are much more widely used in Europe in particular by the health insurance and banking industries in particular. For example, every German cirizen is in possesion of a smart card which contains their health insurance details. Surprisingly, even though smart cards have been in use for around a decade they are only recently starting to take off properly in the America.
This is not to say that magnetic stripe technology is on the decline as it is still widely used in the United States however it is likely that this will not remain the case as data from the stripe is comparatively easy to read, write or delete by using equipment that can be purchased off the shelf. It is for these reasons that a magnetic stripe is not the most secure method for storing sensitive information and is also why many businesses in the United States invested in an extensive online mainframe based computer network that would be used for verifying and processing such information. This was not the case in Europe where more investment was made in smart cards which contained all the intelligent technology that was needed.
The microprocessor in the smart card is purely for security reasons. The hosting computer and the card reader actually communicate with the microprocessor which enforces data access to the card. Were the host computer to read and write to the RAM on the smart card, it would be no different than an old style computer diskette.
In terms of memory, smart cards may have up to 8kb of RAM, 346kb of ROM, 256kb of programmable ROM and a 16 bit microprocessor. The smart card receives it s power from card readers or other similar external sources. For an added level of security the processor chip uses a limited instruction set to encrypt the data stored on it.
Smart cards are most commonly used for applications such as banking, computer security and entry card systems, wireless communications, satellite TV, government identification, electronic cash and of course credit cards. Web browsers can also make use of smart card technology in order to supplement Secure Sockets Layer (SSL) to enhance the security of financial transactions over the internet.
Smart cards are extremely useful and store various types of information. They are also cheap to produce, making them very cost effective for companies to implement in the long run. The other advantage that they have over magnetic stripe cards is that their information cannot be accidentally erased or overwritten.
Author Resource:
Dave Matthews is writing on behalf of Universal Smart Cards (http://www.usmartcards.com).
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