What is a Smart Card - Overview

What is a Smart Card - Generic High-Lavel Overview

A smart card is a card that is embedded with either a microprocessor and a memory chip (IC card like  ACS AC0S3) or only a memory chip with non-programmable logic (memory card like  SLE smart cards). The IC card can add, delete, and otherwise manipulate information on the card, while a memory-chip card (for example, pre-paid phone cards) can only undertake a pre-defined operation.

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 - only better.

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.

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
• eHealth System or electronic Portable Medical Record (ePMR)

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.

Smart cards, unlike magnetic stripe cards, can carry all necessary functions and information on the card. Therefore, they do not require access to remote databases at the time of the transaction.

Today, there are three categories of smart cards, all of which are evolving rapidly into new markets and applications:

Integrated Circuit (IC) Microprocessor Cards. Microprocessor cards (also generally referred to by the industry as "chip cards" or "IC cards") offer greater memory storage and security of data than a traditional mag stripe card. Smart cards that are chip cards or IC cards also can process data on the card. The current generation of chip cards has an eight-bit processor, 16KB read-only memory, and 512 bytes of random-access memory. This gives them the equivalent processing power of the original IBM-XT computer, albeit with slightly less memory capacity.

These smart cards are used for a variety applications, especially those that have cryptography built in, which requires manipulation of large numbers. Thus, chip cards have been the main platform for cards that hold a secure digital identity. Some examples of these cards are:

• Cards that hold money ("stored value cards")
• Card that hold money equivalents (for example, "affinity cards)
• Cards that provide secure access to a network
• Cards that secure cellular phones from fraud
• Cards that allow set-top boxes on televisions to remain secure from piracy
• Cards that carry sensitive data (eGovernment, eHealth, Passport, etc)

Integrated Circuit (IC) Memory Cards. IC memory cards can hold up to 1-64 KB of data, but have no processor on the card with which to manipulate that data. Thus, they are dependent on the smart card reader (also known as the card-accepting device) for their processing and are suitable for uses where the card performs a fixed operation.

Memory cards represent the bulk of the 600 million smart cards sold last year, primarily for pre-paid, disposable-card applications like pre-paid phone cards. Memory cards are popular high-security alternatives to magnetic stripe cards.  Microprocessor cards (especially those with a cryptographic capability) are gaining in popularity as governments and companies move to mobile Personal Identity Verification (PIV) and the storage of sensitive personal data such as an ePHR.

The first smart card was developed in 1974, by independent inventor Roland Moreno. Smart card use in Europe and Asia is outpacing North America, but smart card growth is expected to continue at a brisk pace.

By way of comparison, there are over 900 million credit cards in circulation today. Major uses will include providing enhanced financial services, increasing the security and flexibility of cellular phones, and securing satellite and cable transmissions in TV set-top boxes