The primary benefit from the use of a Smartcard is increased security. Smartcards are inherently more secure than conventional magnetic stripe cards and this brings tangible benefit to both the card issuer and the card user.
The development of technology in recent years means that the cost differential between a Smartcard and a conventional magnetic stripe card has steadily eroded, particularly when the massively greater utility of the Smartcard is considered.
With the ability to securely store and update information on board the card, the Smartcard provides an ideal platform for the safe management of the cardholder’s details (such as account information). It is in effect the consumer’s own secure personal database. The processing power of the card also makes it possible to introduce levels of authentication that are simply not possible with magnetic stripe technology. Various cardholder authentication methods such as passwords, PIN, digital photograph or Biometric (e.g. fingerprint) schemes can easily be supported. Such levels of secure authentication are particularly relevant in the e-commerce world, where a consumer has to ensure that they are buying products or services from a genuine vendor as opposed to providing details to a fraudulent web site. Smartcards allow the consumer to control release of information contained on the card while also controlling who receives the information. Conversely, it is just as important for the vendor to ensure that the cardholder is not making use of a stolen card to make their purchase.
Added to all of the above is the ability to modify the card services (even while on line) giving the consumer the power to pick and choose the features of their own Smartcard as required.
This makes the Smartcard a clear choice for the e-Commerce market where a consumer has to ensure that they are buying products or services from a genuine vendor as opposed to providing details to a fraudulent web site. Smartcards allow the consumer to control release of information contained on the card while also controlling who receives the information. Conversely, it is just as important for the vendor to ensure that the cardholder is not making use of a stolen card to make their purchase.
Smartcards provide great opportunities for businesses as well as consumers. With the introduction of greater and more flexible card functionality, businesses can differentiate themselves through improved Customer Relationship Management. Smartcard technology allows effective card holder profiling giving the ability to furnish consumers with new products and features which best suit their lifestyle, while providing the business and/or card issuer with valuable information on customer habits.
So whether you are a merchant selling products over the World Wide Web or a consumer who wishes to buy such products, the Smartcard is enabling the implementation of solutions that consumers and businesses can use with confidence. As Smartcard Technology continues to advance, it won’t be long before we are all carrying our own Smartcard, the uses for which will only be limited by the imagination.
The growth in the use of Smartcards has been phenomenal, the most exciting example probably being GSM telephony, where each handset has a Smartcard called a SIM. Other major growth areas include financial services (credit and debit cards), transport, healthcare and physical and virtual access control. The diagram shows the growth rate experienced in Smartcards.
Smartcard applications in units (million) worldwide
1999 2000 2001 2002 2003 2004 CARG
Wireless Communications 235.5 317 417.1 519.8 649.8 807.6 28%
Financial Cards 113.8 175.9 238.5 324 395.5 459.3 32%
Health Cards 28.7 29.4 26.8 33.5 65.6 82.6 24%
Pay TV 17.5 21.5 26.6 35.1 43.9 55.3 26%
Transport 0.3 0.6 1.7 2.5 3.9 6.2 81%
ID Cards 14.1 24.5 34.7 57.9 83 95.7 47%
Network Security 0.7 4.6 15.6 48.4 102 169.4 196%
Other 23.3 24.2 30.3 35.9 53.5 82.3 31%
Total 431.7 597.9 791.3 1057 1397 1758.4 32%
Year-on-year growth 52% 38% 32% 34% 32% 26%
Source: Gartner Dataquest