Staying on top of trends means we sometimes run across technologically oriented information we like to pass on to our readers. Recently, we read some interesting information about Smart Cards that seems worth sharing.
What are Smart Cards?
Smart Cards, known as contactless credit or debit cards, carry a little chip with a radio frequency identification (RFID) antenna that allows you to make payments without swiping the card through a terminal. Introduced six years ago, an estimated 90 million of them are now in use.
How Do They Work?
Contactless Smart Cards have two components: a microchip that stores details like your credit card number and expiration date, and a radio antenna that reflects radio waves back to a store’s smart-card reader. This technology is similar to what allows cars with pass cards to breeze through tollbooths.
What are the Benefits
Although the perceived benefit is to consumers who don’t need to remove cards from wallets or pocketbooks, the real benefit is to credit card companies. Smart card technology puts them a step closer to mobile payments which will allow cardholders to make payments through their smart phones. This will be a huge cost savings to card companies who will no longer need to mail out bills.
Are They Safe?
The concern with swipeless cards is that anybody with a handheld RFID reader can potentially scan a card. While possible, the likelihood is slim and the damages are usually less than seen with a lost or forgotten credit or debit card. For one thing, while the magnetic strip on regular cards contains your name, account number, expiration date and three-digit security code, an RFID chip holds only your account number and expiration date. Instead of a security code, smart cards generate a unique verification number for each transaction and no number is used twice. Even if someone scanned your card while you were in the middle of a purchase, the security code would be invalid on the next purchase.
Part of the concern about the safety of Smart Cards is stemming from television reports late last year where reporters were able to scan smart-card account numbers of cards tucked inside of wallets or purses. While it is true that account numbers can be scanned, the information is not enough to allow unauthorized transactions. For people who are still concerned about the possibility of their card unknowingly being swiped, wrapping the card in aluminum foil or carrying it in an aluminum wallet will eliminate the threat.