Smart cards look just like traditional credit cards. However, they differ in that they have a microchip embedded in their surface that can be used to store a wide range of information about the holder of the card, or be used as a means of carrying electronic cash. They offer the advantages of paying by cash, but with the convenience of paying by card.
Customers can load their card with cash and then use this to pay for goods in a merchant's retail outlet, or on the merchant's web site. Card readers are available for retail outlets as well as an attachment for PCs. This convenience gives a great advantage to smart cards.
Smart cards can be used for a range of purposes, including:
- Storing digital cash
- Storing a patient's medical records
- Generating network Ids (similar to a token).
To use a smart card, either to gain information from it or add data to it, you need a smart card reader - a small device into which you insert the smart card.
To give an example of how a smart card might work, take this example:
Doctor Visit: On arrival at the surgery, you hand over your smart card to the receptionist to check in. Once in seeing the doctor you give him/her your card so they can review and prescribe medication. At the pharmacy, you hand over your card to receive your prescription, and of course to pay for it as you can also use the smart card as a credit or debit card.