Make the Grade with Smart Cards
Replacing magnetic stripe cards with smart cards can improve efficiency and security.
A long time ago, in a place far, far away— Europe—smart cards were invented to reduce the prodigious amount of theft and fraud involved in the telecommunications industry.
In order to prohibit high-tech thieves from duplicating legitimate phone cards, a new card was developed using an embedded microchip to store data and cryptography to protect the integrity and privacy of card-related transactions.
Today, there are billions of these cards—called smart cards—in use across Europe and Asia, yet there are only a few million in the United States. The reason, explained Roland Four-nier, product manager, RSA Security, Bedford, Mass., is because while European nations laid the groundwork for smart card technology, magnetic stripe cards were already ubiquitous in the United States. Twenty-five years later, smart cards are finally making it stateside, but it's an uphill battle.
"Smart cards are more expensive than magnetic stripe cards," noted Fournier. "Magnetic cards run between $1 and $2 per card while smart cards run about $10 each, depending on memory size."
Smart card read-ers, devices used for reading the information encrypted into each card's chip, are also expensive. Despite these concerns, distributors should consider the benefits of smart cards and how applying them to a client's current operation could improve security and save money.
"The value of smart cards is that in addition to storing information, they can process data and execute small programs," said Dr. John Butterworth, chief scientist, Security Sciences International, Redondo Beach, Calif.
Manufacturers have numerous applications for these microchip-enhanced wonders. For instance, at universities smart cards have been used to identify students, maintain financial, library, grade and attendance information and provide building security. With the addition of an e-purse program, students can also purchase food on a meal plan or buy supplies in the school store.