Smart Card Applications

The applications of smart cards include their use as credit or ATM cards, SIMs for mobile phones, authorization cards for pay television, high-security identification and access-control cards, and public transport payment cards.

Smart cards may also be used as electronic wallets. The smart card chip can be loaded with funds which can be spent in parking meters and vending machines or at various merchants. Cryptographic protocols protect the exchange of money between the smart card and the accepting machine. Examples are Proton, GeldKarte, Moneo and Quick.

A quickly growing application is in digital identification cards. In this application, the cards are used for authentication of identity. The most common example is in conjunction with a PKI. The smart card will store an encrypted digital certificate issued from the PKI along with any other relevant or needed information about the card holder. Examples include the U.S. Department of Defense (DoD) Common Access Card (CAC), and the use of various smart cards by many governments as identification cards for their citizens. When combined with biometrics, smart cards can provide two- or three-factor authentication. Smart cards are a privacy-enhancing technology, for the subject carries possibly incriminating information about him all the time. By employing contactless smart cards, that can be read without having to remove the card from the wallet or even the garment it is in, one can add even more authentication value to the human carrier of the cards.

Smart cards have been advertised as suitable for these tasks, because they are engineered to be tamper resistant. The embedded chip of a smart card usually implements some cryptographic algorithm. Information about the inner workings of this algorithm can be obtained if the precise time and electrical current required for certain encryption or decryption operations is measured. A number of research projects have now demonstrated the feasibility of this line of attack. Countermeasures have been proposed.

Smart cards are widely used to protect digital television streams. See television encryption for an overview, and VideoGuard for a specific example of how smartcard security worked (and was cracked).

Another problem of smart cards may be the failure rate. The plastic card in which the chip is embedded is fairly flexible, and the larger the chip, the higher the probability of breaking. Smart cards are often carried in wallets or pockets — a fairly harsh environment for a chip. However, for large banking systems, the failure-management cost can be more than offset by the fraud reduction.

Gujarat was the first state in India which introduced the smart card license system in 1999. It was the first place in India which introduced this innovative system and, thus, its implementation was a real challenge. As of now, Gujarat Government has issued 5 million smart card driving licenses to its people. This card is basically a plastic card having ISO 7810 certification and integrated circuit, capable of storing and verifying information according to its programming. To avoid corruption and mismanagement of driving licence, in the year 1999,Gujarat State Government launched the smart card driving license system, which has become the success story for different states of India and overseas countries such as USA. However, the first smart driver's license in the world was issued in 1995 in Mendoza, a province of Argentina. Mendoza has a high level of road accidents, driving offenses, and a poor record of recovering outstanding fines. The smart licenses keep an up-to-date record of driving offenses and unpaid fines. They also store personal information, license type and number, and a photograph of the holder. Emergency medical information like blood type, allergies, and biometrics (fingerprints) can be stored on the chip if the cardholder wishes. The Argentina government anticipates that this new system will help to recover more than $10 million per year in fines.