Smart Cards How it Works

A smart card, also called chip card or integrated circuit card is a type of pocket-sized card with embedded integrated circuits which can process data. This card can receive input which is processed by way of the ICC applications and delivered as an output. A smart card is a plastic card embedded with a computer chip that stores and transacts data between users. Smart card-enhanced systems are in use today in several key applications such as health-care, banking, entertainment and transportation. The card data is transacted via a reader connected to a computing system.
Smart cards improve the convenience and security of any transaction. The card provides tamper-proof storage of user and account identity, vital components of system security for the exchange of data throughout virtually any type of network. The Smart cards protect against a full range of security threats.
A smart card resembles a credit card in size and shape, but inside it is completely different. The inside of a smart card usually contains an embedded microprocessor. The microprocessor is under a gold contact pad on one side of the card. Smarts cards may have up to 8 kilobytes of RAM, 346 kilobytes of ROM, 256 kilobytes of programmable ROM, and a 16-bit microprocessor. The smart card uses a serial interface and receives its power from external sources like a card read

Applications of Smartcards
The most common applications of Smart cards are:

• Credit cards
• Electronic cash
• Computer security systems
• Wireless communication
• Loyalty systems (like frequent flyer points)
• Banking
• Satellite TV
• Government identification

Memory cards and Microprocessor cards
Memory cards contain only non-volatile memory storage components, while Microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally PVC, but sometimes ABS. The card may embed a hologram to avoid counterfeiting.
Uses of Smart cards

• Stored Value – The primary use of smart cards is stored value, particularly loyalty programs that track and incentivize repeat customers. Stored value is more convenient and safer than cash.
• Securing Information – In addition to information security, smart cards achieve greater physical security of services and equipment, because the card restricts access to all but the authorized user.
• E-Commerce- Smart cards make it easy for consumers to securely store information and cash for purchasing. The card can carry personal account, credit and buying preference information that can be accessed with a mouse click instead of filling out forms.
• Personal Finance – Customers can use secure smart cards for fast, 24-hour electronic funds transfers over the internet
• Health Care – Rapid identification of patients; improved treatment. A convenient way to carry data between systems or to sites without systems. Reduction of records maintenance costs

Smart Card Reader

The Card reader is used to interfaces with a PC for the majority of its processing requirements. Both readers and terminals read and write to smart cards. Readers come in many form factors and in a wide variety of capabilities.Contact smart cards have a contact area, comprising several gold-plated contact pads, that is about 1 cm square. When inserted into a reader, the chip makes contact with electrical connectors that can read information from the chip and write information back.The cards do not contain batteries; energy is supplied by the card reader.
Smart card pin out

• VCC: Power supply input
• RST: Used itself or in combination with an internal reset control circuit.
• CLK: Clocking or timing signal
• GND : Ground
• VPP : Programming voltage input
• I/O : Input or Output for serial data to the integrated circuit inside the card.

The use of the two remaining contacts will be defined in the appropriate application standards.
Types of Smart Cards
Contact smart card readers are used as a communications medium between the smart card and a host, e.g. a computer, a point of sale terminal, or a mobile telephone. Since the chips in the financial cards are the same as those used for mobile phone Subscriber Identity Module (SIM) cards, just programmed differently and embedded in a different shaped piece of PVC, the chip manufacturers are building to the more demanding GSM/3G standards.
Contactless smart card
Contactless smart card, in which the chip communicates with the card reader through RFID induction technology. These cards require only close proximity to an antenna to complete transaction. They are often used when transactions must be processed quickly or hands-free, such as on mass transit systems, where smart cards can be used without even removing them from a wallet.
Cryptographic smart cards
Cryptographic smart cards are often used for single sign-on. Most advanced smart cards include specialized cryptographic hardware that uses algorithms such as RSA and DSA.