A smart
card 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 8-bit 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 are much more popular in Europe than
in the U.S. In Europe the health insurance and
banking industries use smart cards extensively.
Every German citizen has a smart card for health
insurance. Even though smart cards have been around
in their modern form for at least a decade, they are
just starting to take off in the U.S.
Magnetic stripe technology remains in wide use in
the U.S. 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 and instead the card carries the
intelligence. There are advantages and disadvantages
to both systems.
The microprocessor on the smart card is there for
security. The host computer and card reader actually
"talk" to the microprocessor. The microprocessor
enforces access to the data on the card. If the host
computer read and wrote the smart card's random
access memory (RAM), it would be no different than a
diskette.
Smarts cards may have up to 1 Kbytes of RAM, 16
Kbytes of programmable read only memory, 24 Kbytes
of read only memory (ROM), with an 8-bit
microprocessor running at 5 MHz. The smart card uses
a serial interface and receives its power from
external sources like a card reader. The processor
uses a limited instruction set for applications such
as cryptography.
The most common smart card applications are:
- Credit cards
- Electronic cash
- Computer security systems
- Wireless communication
- Loyalty systems, like frequent flyer points
- Banking
- Satellite TV
- Government identification
Smart cards can be used with a smart card reader
attachment to a personal computer to authenticate a
user. Web browsers too, can use smart card
technology to supplement Secure Sockets Layer (SSL)
for improved security of Internet transactions. The
recent American Express Online Wallet 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.
