SMART CARD

1.INTRODUCTION

Internet technologies, through intranet and extranet applications, have proven themselves to be efficient and effective in streamlining existing processes from supply chain management to manufacturing logistics, from marketing to customer asset management, and by creating new value chains and businesses. Nevertheless, these changes and benefits signal only an evolutionary shift in the way we do business. The Internet-enabled economy resembles the conventional physical market in many aspects. Some of the new technologies and applications may even be unnecessary. American consumers, for example, regard smart cards as a redundant payment mechanism when checks, credit cards and ATM cards do an adequate job for current needs. What is the use of smart cards? Do we really need them? Will they ever take off?

2.OVERVIEW

Today, the SIM card’s basic functionality in wireless communications is subscriber authentication and roaming. Although such features may be achieved via a centralized intelligent network (IN) solution or a smarter handset, there are several key benefits that could not be realized without the use of a SIM card, which is external to a mobile handset. These benefit enhanced security, improved logistics, and new marketing opportunities are key factors for effectively differentiating wireless service offerings. This tutorial assumes a basic knowledge of the wireless communications industry and will discuss the security benefits, logistical issues, marketing opportunities, and customer benefits associated with smart cards.

The smart card is one of the latest additions to the world of information technology (IT). The size of a credit card, it has an embedded silicon chip that enables it to store data and communicate via a reader with a workstation or network. The chip also contains advanced security features that protect the card’s data.

Smart cards come in two varieties: microprocessor and memory. Memory cards simply store data and can be viewed as small floppy disks with optional security. Memory cards depend on the security of a card reader for their processing. A microprocessor card can add, delete, and manipulate information in its memory on the card. It is like a miniature computer with an input and output port, operating system, and hard disk with built-in security features.

Smart cards have two different types of interfaces. Contact smart cards must be inserted into a smart-card reader. The reader makes contact with the card module’s electrical connectors that transfer data to and from the chip. Contactless smart cards are passed near a reader with an antenna to carry out a transaction. They have an electronic microchip and an antenna embedded inside the card, which allow it to communicate without a physical contact. Contactless cards are an ideal solution when transactions must be processed quickly, as in mass transit or toll collection.

A third category now emerging is a dual interface card. It features a single chip that enables a contact and contactless interface with a high level of security.

Two characteristics make smart cards especially well suited for applications in which security-sensitive or personal data is involved. First, because a smart card contains both the data and the means to process it, information can be processed to and from a network without divulging the card’s data. Secondly, because smart cards are portable, users can carry data with them on the smart card rather than entrusting that information on network storage or a backend server where the information could be sold or accessed by unknown persons 

The SIM card’s chip can be programmed to carry multiple applications. The activation of new applications can be downloaded to the card over the air, in real time, thereby reducing the time (and cost) to market.

Providing value-added services such as mobile banking, Web browsing, or travel services creates a high cost of exit for the customer. Long-distance companies have successfully used joint programs with airline companies to ensure the long-term loyalty of their customers. The more services a customer receives, the more difficult it is for the customer to leave the service provider. Smart cards provide an excellent vehicle for surrounding the core wireless service with these other valuable services, and packaging- and service-bundling opportunities are numerous. Examples of such opportunities are as follows:

• GSM Cellnet and Barclaycard, Europe’s largest credit-card issuer, developed a wireless, financial-services smart card. The SIM card activates the user’s Cellnet GSM phone and also provides a Barclays services menu. The services available via this alliance include the following:
• access to Barclays credit-card information
• access to Barclays checking-account information
• access to Barclays customer care
• Initially, the Barclaycard services will be provided via live customer service representatives who will answer calls from customers. Future enhancements will enable users to pay household bills, shop, and access financial information services while on the move.
• Swedish bank PostGirot implemented a utility bill–payment application in the Telia Mobitel SIM card. Mobile phone users accessed the service by simple menu navigation and keying information such as origin and destination bank-account numbers, date of payment, and amount, which enables them to pay their utility bills away from home. 

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