Smart Card Technology Pros & Cons

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Credit cards offer a means of making transactions based on credit. These cards offer users a fast and portable way of gaining access to available credit. The smart card is a type of card that offers similar applications, but with certain pros and cons.

Definition

Smart card technology is a card format that operates in a similar capacity as a credit card, and uses a central processing unit, or microprocessor. The microprocessor processes digital information and stores memory via an embedded integrated circuit. Smart cards can communicate with such services as ATMs by means of a serial interface, and are commonly used for financial transactions and authentication functions.

Pros

The serial interface used in a smart card can contain encrypted, or coded, password information, and is considered more secure than the magnetic strip on a credit card. Smart cards also can provide identification verification via encrypted information.

 

Cons

Smart cards lack the same standards as credit cards for functionality, and may vary by brand. The chips contained in smart cards also can be damaged by frequent use or harsh environmental conditions, such as extreme heat or cold.