Will Smart Cards Replace Credit Cards?

With all the improvements made to smart cards technology over the years, it is easy to imagine that they will soon replace credit cards. Smart cards are credit card sized, but are different because they contain a microprocessor inside the card. This microchip can be used to store and transmit sensitive and personal data between parties. However in spite of the many advantages the transition to smart card technology is not going as quickly as you might think…

Smart cards are very popular in Europe and are used as health insurance cards that can store all of the cardholder’s medical records. A patient no longer needs to fill out hospital or doctor forms again because all of their records could be held and transmitted via the smart card. Smart cards are also used for banking, as a means of electronic cash and as forms of identification.

The United States primarily uses cards that contain data in a magnetic stripe that is attached to the back of the plastic card. The reason the magnetic stripe is not a good way to store data is because the information is easily accessed. If someone wanted to, they could obtain a machine that would be able to read a credit card’s magnetic stripe. They could then copy the data, change the data or even delete the data that is on the card.

Because smart cards are more secure and have been used in Europe for years without any serious problems, it is a good bet that this technology will ultimately replace credit cards in the North America. Smart cards have secure features that restrict access to the data contained in the card to only the authorized users. In addition, the smart card needs a special reader in order to be able to transmit data from the card. As a result, the smart cards can provide a level of security that simply is not possible with the magnetic stripe currently used on credit or debit cards.

Currently smart card technology has been adopted by major card companies like Visa, but so far their use is limited. Part of the problem is that traditional card readers that can read credit or debit cards will not work with a smart card. However these machines are gradually being replaced by newer ones that have the ability to process both smart cards and regular credit cards.

Although it is certain that smart cards will eventually replace the current credit card technology in North America, no one is saying when. Once the infrastructure is in place and new card readers are generally available, then it is quite probable that smart card usage will become widespread fairly quickly.