smart card and credit card

[oan]

Hi,

I am unclear on the benefit of using smart card for online shopping. I have heard about its advanced security features. It stores information in microchips instead of magnetic strips which is used by credit card. So, smart card needs a special reader to transfer information. I think it is secure enough to use smart card at point of sale at stores. For online shopping, customers still have to give their smart card number (as using credit card) on the internet. How is it secure?
Is my understanding about smart card correct?
Could anyone please explain me more?

oan
MIMS, Monash University

 

[Guest_imported]

Hi Oan,

My name is Johnny (a friend of Boyd), I saw him respond to your question and I think it is very interesting to me so I would like to help explain the concept of the smart card for you and hope it would help you. I'm currently working as Web Design in the same team with Boyd.

A smart card is a standard credit card-sized plastic token within which a microchip has been embedded. This chip is the engine room of the smart card, the chip come in two broad varieties: memory-only chips, with storage space for data, and with a reasonable level of built-in security; and microprocessor chips which, in addition to memory, embody a processor controlled by a card operating system, with the ability to process data onboard, as well as carrying small programs capable of local execution. The main storage area in such cards is normally EEPROM (Electrically Erasable Programmable Read-Only Memory), which - subject to defined security constraints - can have its content updated, and which retains current contents when external power is removed. Newer smart card chips may also have maths co-processors integrated into the microprocessor chip, able to perform quite complex encryption routines relatively quickly.

A smart card is therefore characterised uniquely by its chip, with its ability to store much more data (currently up to about 32,000 bytes) than is held on a magnetic stripe (Master Card and Visa card), all within an extremely secure environment. These security features built into smart card chips are amongst the most sophisticated of their type available in the commercial world. Data residing in the chip can be protected against external inspection or alteration, so effectively that the vital secret keys of the cryptographic systems used to protect the integrity and privacy of card-related communications can be held safely against all but the most sophisticated forms of attack. The ingenuity of the cryptographers further supplements the physical security of the chip, ensuring that penetrating one card's security does not compromise an entire card scheme.

It is because of these security and data storage features that smart cards are rapidly being embraced as the consumer token of choice in many areas of the public sector and commercial worlds. The Internet, in particular, is focussing the need for online identification and authentication between parties who cannot otherwise know or trust each other, and smart cards - coupled with effective cardholder verification techniques - are believed to be the most efficient and portable way of enabling the new world of e-trade. Interoperability is the key requirement to facilitate universal consumer acceptability: the ability of a card function developed by one organisation to be used without difficulty in schemes owned and operated by many organisations. So it is that the current world population of smart cards of some 1.7 billion is set to increase to 4 billion or more cards within the next 3-4 years.

 

[Guest_imported]

Hi Oan,

I'm currently working part time as a web programmer and for the past few years have been involved in writing the program for the security on online shopping.

Your understanding and knowledge about smart card is correct. Smart card has a built-in advantage - a computer chip that can store more than 100 times the information contained on traditional Visa cards. You can also enjoy the benefits you've come to expect from Visa, including acceptance at over 21 million merchant locations around the world and on the Internet.

The reason that smart card is the smarter way to shop because its ability to hold much more data than traditional visa card. It will hold all of your reward programs, discounts, special offers, and club and store cards… all in one place. And only you can access it.

Security is one of the major advantage over traditional visa card - As merchants increasingly adopt chip and authentication technology, the smart card brings you added levels of security. For online shopping, your password-protected smart Visa card and Reader work with "Verified by Visa" to authenticate your transaction. When you use your Visa card to shop online, in a store, or anywhere. You're protected from unauthorized use of your card or account information. With Visa's new Zero Liability policy which mean that your liability for unauthorized transactions is $0 - you pay nothing! Smart Card takes online security very seriously so you can focus on your shopping without worry on unauthorized charged.

 

[oan]

Hi all,

I am so thankful with your response. It maks me gain much more information about smart card.

From my point of view, as you have disscussed, it seems that smart card is a superior tool for enhancing system security and provides a place for secure storage. Smart card is probably a solution to solve the problem of using traditional credit card, which can be duplicated and easy to hack. It can also be anticipated to use as an identification document replacing traditional paper-based certificates.

From Boyd's idea, visa's new zero liability policy covers all visa network transactions. I am wondering that does this network cover only the card that is issued by U.S. financial institute? If I have a visa card that is issued by the financial institute in my country, will it be covered?

Regards,
oan

 

[Guest_imported]

The Smart Credit Card is the latest in credit card technology A small 32K microprocessor chip is actually built-in to the card giving it much greater information capability than the magnetic strip. The chip coexists with today's existing technology and will simplify online shopping and digitally encrypt every transaction for enhanced security.
And that's just the beginning. Soon, applications will permit cardholders to send, receive and store information using these small but powerful memory chips.

With a smart credit card you'll be able to :

1. Store cash in your account enabling you to use the smart card at previously cash only merchants: ie: Laundromats, vending machines, newsstands, etc.

2. Have single-click access to your account information 24/7.
Request balance transfers, track purchases, manage your account online at your convince.

You also can attach a smart chip reader to your computer. A smart chip reader - the optional Smart Card Reader uniquely identifies you as the Cardmember by connecting to your PC's serial or Universal Serial BUS (USB) port, depending on which Reader you choose. The same Reader will also be able to load new applications to the Smart Chip As technology is developed in the near future

Readers currently allow you to take advantage of a higher level of security when shopping on the Internet and using Smart Chip you can protect your Card information when shopping online by using a secure, temporary transaction number instead of your actual Card account number. If you choose to have a Smart Card Reader installed on your PC, you can "lock" access to Private Payments, so only you can use it to shop online from your PC. The Smart Chips hold a unique certificate of authenticity that is read by your Smart Card Reader. This certificate identifies you to Private Payments and helps ensure that you - and you alone - have access on your PC.

Cheer

 

[Guest_imported]

Hi Ona,

It's me again. At the moment I believe that not many countries offer this smart chip to their customers. I'm not sure about your country. It does in Australia cos' I just saw new American Express card that offer with this new smar technology with embed into the card call "Blue". If you want more information or want to see what the smart chip look like you can log into the AMEX web site. A lot of finacial institution do offer this smart chip.

In your case if you already have your visa card, you need to ask your financial institution whether they have this offer for the customer? Otherwise there are many online application around the net, waiting for you to experience this new technology.

I'll let you know more when I accept my new smart visa card from Blue AMEX cos' I still waiting for the card.

Bye