Smart Cards : Broad Use and Industry Application

Essay by EssaySwap ContributorUniversity, Master's February 2008

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Introduction E-commerce, has enabled payment over a communications wire since its inception with the telegraph in the late 19th century. In these early days it was easy to identify transaction participants and transacting parties usually had established relationships. Transactions involved physical currency, product and service providers were easily discernible, and there was virtually no electronic automation. Since the latter end of the 20th century, however, it is becoming more difficult to authenticate entities, society is becoming cashless and globalisation is impacting on customer/supplier relationships. Suppliers are becoming less discernible and customer loyalty is being pursued ?Modern society needs an enormous amount of information to function. Computers give us a means to process this information. Smart cards give us a way of individualising the handling and control of this information? (Shaw, Blanning, Strader & Whinston, 2000, p. 293).

One of the 21st century E-commerce facilities that emerged to meet the requirements of the new economy is the Smart Card. ?A smart card is a plastic card with an embedded microchip containing a broad range of information about you? (Schneider & Perry, 2000, p. 231). As Schneider and Perry suggest, typically smart cards are used to store values associated with personal transactions. At the most abstract level smart cards have one single function, to store a value that can be retrieved using a smart card reader. The type of value stored by a smart card can be diverse. ?. . . smart cards that get you everything, from dorm access to potato chips . . .? (Herring, 2000).

The five major areas where smart cards might be used to enhance an organisation?s competitiveness and efficiency are discussed in the context of stored value associated with: ? security applications; ? monetary applications; ? token or ticketing applications; ? client information, and; ?...