Smart card is an innovative technology that resembles credit cards. Smart cards
nearly have same shape and size, but they are completely different from the inside.
The credit card makes use of a magstripe
to store valuable information whereas a smart cards makes use of a microprocessor
for this purpose. In Europe, smart cards are more popular than in USA. Smart cards
are used extensively in banking, for health insurance, and even for going to theater
and visiting libraries.



It is very securing then a magstripe technology. The reason is that the information
on the magstripe can easily be altered. But in a smart card this is not possible.
The microprocessor is under a gold contact pad on one side of the smart card.
Smart cards internal structure includes a RAM of up to 8 kilobytes, a 346 kilobytes
of ROM, a 256 kilobyte programmable ROM and a 16-bit microprocessor.



It uses a serial interface and it takes power form the card reader. The processor
has the instruction set for necessary encryption. The card reader and the server
communicate with smart card's microprocessor. Inturns, microprocessor allows data
stored on he card to be read. The smart cards can also hold your identification
information, and it can keep track of your loyalty systems like frequent flyer
points.



The entire process of validation and transaction is invisible to the user except
for the necessity of entering PIN to begin a transaction. The smart card and card
reader execute sign/countersign-like protocol to confirm the validity. Once this
has been done, the transaction is carried out. The entire transaction process
is encrypted so that the user or merchant can be prevented to eavesdrop.



Many transactions can be performed by the microprocessor present in these cards.
You can purchase from your credit account, debit account or even from a stored
account that is reload-able. Some application of smart cards;

• Electronic cash
• Banking
• Credit cards
• Government identification
• Etc

Smart cards are in great use in Europe. Their need for secure transactions is
felt throughout the world and according to experts they internationally accepted
smart cards will be increasingly available in the years to come.