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What are Smart Credit Cards



All features of cryptography are incorporated into the innovative application referred to as “smart” credit card. Built into the card, it contains a microprocessor. For the efficient functioning of these cards, cryptography is of prime importance. It is so because:

  • Each time a transaction is made, the user is required to confirm his identity. It is similar to entering a PIN on an ATM.

  • Both, the card reader and the card initiate a sequence of encrypted sign exchanges. This way, the devices confirm their legitimacy to each other.

  • Once this is accomplished, an encrypted form of the transaction is executed. Both parties are prevented from “eavesdropping” on the exchange, so that neither can impersonate and defraud the system.


To begin the transaction, the user is required to enter a PIN, but the rest of the complicated protocol is executed in such a way that the user cannot comprehend.

France was the first country in which the smart cards were used in 1984. They outdate the common cards, made of plastic which we use today. The smart card technologies of Visa and MasterCard have wide applications throughout the United States. They are capable of carrying a broad range of transactions. One could, for example, make purchases for debit or credit account or from a re-loadable stored account value. The smart card has increased its processing and memory capacity. The latter surpasses the one of the cards which employs traditional magnetic stripes. Several applications may be accommodated on a single card. It holds information that identifies the user, provides access to his home or office, or keeps track of your affinity program participation. The user may come to the conclusion that the smart card is the only one he needs. This state is in contrast with all these cards one goes through in the hope of finding the one he needs.

With regard to the next several years, experts share the opinion that smart cards will be used on a global scale and will become available to many people. Their use is still limited, though they are already used in many countries. Available now only to participants in special programs, the smart cards will soon be used by whoever finds them useful.

Most of the US citizens have, according to the financial experts, at least one credit card. Used in most financial transactions, they are a broadly recognized source for identification. Moreover, they are accepted when a person decides to rent a car or to reserve a hotel room. A wide array of them is offered by the banks and by various other financial institutions. They are based on the customers’ needs and the income level. Such example is also the smart card.

Though yet expensive, the smart credit cards are very trustworthy and help in combating identity theft. We reach new high levels, and there is a definite need of a card that prevents all kinds of fraud. Very attractive packages are also offered by some insurance companies with regard to identity theft. The use of smart cards and insurance packages provides some peace when we know that we have done our best to ensure that our identity will remain safe and secure.