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The Advantages & Disadvantages of Using Smart Cards

written by: Lashan Clarke•edited by: Rebecca Scudder•updated: 4/2/2012

Smart cards work just as well as credit cards, yet may be safer and more secure. Learn more about how these cards work and why it is taking so long for them to become more common.

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    The Advantages Of Using Smart Cards

    More Secure

    This simple technology has revolutionized the payment card industry and increased the level of card security. These cards use encryption and authentication technology which is more secure than previous methods associated with payment cards. The microprocessor chip embedded at the heart of the smart card requires contact to the card reader and certain areas of the chip can be programmed for specific industries.

    Safe to Transport

    Another advantage to having a smart card is their use in the banking industry (and many other sectors). These cards give the holder freedom to carry large sums of money around without feeling anxious about having the money stolen. In this regard, they are also safe because the cards can be easily replaced, and the person would have to know the pin number to access its stored value. This takes care of the problem with cash; once it is stolen it is nearly impossible to trace and recover it.

    Double as an ID Card

    A third advantage of using a smart card is that they can provide complete identification in certain industries. There are numerous benefits of using smart cards for identification. A driver's license that has been created using smart card technology can give the police the ability to quickly identify someone whose been stopped for speeding or reckless driving. These cards can be used by health professionals to identify someone who is brought in by an ambulance but unconscious or unable to speak.

    Prevents Fraud

    Other benefits of using smart cards for identification can be used by governments to prevent benefits and social welfare fraud to ensure the right person is receiving the welfare benefit. Some countries are using the smart cards to identify temporary workers who have been given work permits. This has the potential to reduce immigration fraud.

    Smart cards are just as easy to use as a credit or debit card, but considerable more secure. They are lightweight and easy to carry. This makes it easy to have one card to pay for parking, access to the office, and for buying lunch at the office cafeteria.

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    Possible Disadvantages

    Easily Lost

    Like a credit card, smart cards are small, lightweight and can be easily lost if the person is irresponsible. Unlike credit cards, smart cards can have multiple uses and so the loss may be much more inconvenient. If you lose a card that doubles as a debit card, bus pass and key to the office, you could be severely inconvenienced for a number of days.

    Security

    A second disadvantage of the using smart cards is their level of security. They are more secure than swipe cards. However, they are not as secure as some in the general public would believe. This creates a false sense of security and someone might not be as diligent as protecting their card and the details it holds.

    Slow Adoption

    If used as a payment card, not every store or restaurant will have the hardware necessary to use these cards. One of the reasons for this is since the technology is more secure, it is also more expensive to produce and use. Therefore, some stores may charge a basic minimum fee for using smart cards for payment, rather than cash.

    Possible Risk of Identify Theft

    When used correctly for identification purposes, they make the jobs of law enforcement and healthcare professionals easier. However, for criminals seeking a new identity, they are like gold, based on the amount of information it can contain on an individual.

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    Read this review of the Zebra p100i for a look at a smart card printer which does a great job and is easy on your budget. Depending on the base card used, it can make smart cards or magnetic strip cards.