How Smart Cards Increase Security

Summary: The traditional credit card is a great tool for making purchasing easy for both the retailer and the customer. But in this drive to be simple, there have been questions about the security of the system.

The traditional credit card is a great tool for making purchasing easy for both the retailer and the customer. But in this drive to be simple, there have been questions about the security of the system. In Europe, more transactions are being placed with the use of smart cards. And with all of their advantages, this might be something that the United States should begin to consider. What is a Smart Card? A smart card looks just like a regular credit card, but instead of the magnetic strip on the back of a piece of plastic, it has a tiny microprocessor underneath a gold contact pad. It's a small computer that stores all of the information that a retailer might need. This microprocessor allows the main computer host to 'talk' with the card to get the information that it needs. And unlike the traditional magnetic strip, it's much more difficult to remove or steal information from a smart card. Many thieves can actually buy cheap equipment and get information from the magnetic strip on a regular credit card, but not with a smart card. How is this safer? Because your information can not be gathered from a smart card without your authorization, your financial information as well as personal information is safe. In fact, this is the same technology that is used in satellite TV so that you can get the channels that you have paid for. Without the payment, the host won't 'talk' to the smart card. Other applications include health benefit cards (in Europe), government identification, security systems, electronic cash, banking, wireless communication, and credit cards. The cards can also be used with a smart card reader when you are making purchases over the Internet to further insure that your information is safe and secure. Simply attach a reader to your computer and create your own 'cash' register. Smart card readers can also be found in vending machines and cellular phones. With a smart card, you don't have to worry about your credit information each time you want to make a purchase and you don't have to worry if you lose the card. You will still report it as stolen, but the thief will not be able to do much with it since he or she won't know the information that is contained on it and how to release it.