What's so "smart" about my credit card?

Another ad in the mail today. I can get some credit card by XYZ Bank that’s not only a credit card, it also has some “smart chip” in it! Technology knows no limits. Here’s the catch though, nowhere in the literature does it mention exactly why I’d want a smart chip, what it does or how it’s going to improve my credit card. If fact, I’ve noticed this about the TV ads for “smart cards”, print ads, radio ads… they all make a big show of saying how this card is the wave of the future, but no one can tell me what it does besides giving me a line of credit with which to purchase things. You know, like the cards I have now.

Anyone have the answers?

I’ve been wondering this too. Well? Anyone??

You can get a “smart chip” reader for your PC, to provide “added security” for online shopping. It sounds like it provides a built-in encryption key for credit card based transactions on the internet. I would imagine that it’s a lot like using a “secure card” for getting behind your corporate firewall from the outside, if you’ve ever had to use one of those things.

Beyond that, it’s actually putting a little OS on your card, with the capability of adding applications. Here’s a press blurb on American Expresses “Code Blue” contest:


Right now, I think it’s potential more than anything else. The winner was some guy who turned the card into a secured set of internet bookmarks with ID’s and passwords and so on.

I don’t know what I think of it right now. It would be kind of nice to use it for tickets and so on, but you just KNOW that the demographic tracking and ad-targetting applications are already in the works.

And it needs to be integrated with your PDA / cell phone, obviously. Yet another wrinkle for handheld devices.

Does that mean that the chip part is writable? After all, secure bookmarks tailored to myself aren’t useful unless I have some method of adding the bookmarks in. If the bookmarks are being added and stored at the XYZ Bank server and are asked for by the merchant when conducting a transaction I don’t very well need a chip, just for the server to notice when my number is being run through. Actually, that goes for about anything; unless the chip is writable and customizable by myself, what possible purpose can it serve by being on the card that isn’t better served by leaving the info on the servers that have to be accessed anyway when determining if my line of credit is any good?

I don’t understand the “smart chip reader” idea. Am I reading my own smart chip while shopping online by running my card through something? Why would I need more security when I’m using my own card? Again, it sounds like something better left to the existing hardware than tossing some chip of dubious worth onto a piece of plastic.

I’m not attacking you, Yabob (and thank you for providing the link) – I guess I’m just getting grumpy that I’m expected to want a credit card simply because it has a gizmo on it that apparently has no real function. Perhaps it might one day have a function, but at that time I don’t know if the function will be attainable by the smart chip I have now and why I couldn’t simply get a card later when the companies have figured out why in the hell they’re putting this thing on there. It’s like buying a car with a lever in the dashboard: “We don’t really have a use for that lever, but you’ll want to buy this car now in case we ever think of something that lever might do.”

not running through, in the 21st century we just plug it in. :slight_smile:

The deal with the ‘smart card’ was originally for the card to be used as electronic cash. You’d load up your card with X number of dollars and a reader at the place of purchase would deduct the amout of said purchase.

Of course, fast phone connections make it rather useless, as deit cards work just as well.

Finally, a subject I can contribute to. As mentioned above, the chip can be used for multiple purposes, such as storing passwords, bookmarks, or whatever. It can also be a stored value card. It can be an ID card, for work or school. It can also provide greater encryption capabilities. The really great thing about it, though, is that it can be all of these things at once. the chips can be partitioned with several different functions, all depending on what the issuer wants to provide, and how much they want to spend per card. As was also mentioned, though, they can be used to track your spending habits more closely, and are used by some issuers to custom-tailor loyalty programs. Also, while they haven’t really caught on over in the states, they are in much greater use in Europe. So, it’s not a matter of creating something and not having a use for it, it’s just a function not fully exploited in this part of the world.

This was recently discussed on Slashdot. Some excerpts from allegedly clueful comments:

Those chips on smartcards are actually full-fledged computers with memory, a CPU, and I/O functionality. This is why it’s hard to just say what they will do. Trying to say [exactly] what they will be used for was like trying to predict what PCs would be used for 25 years ago. They will be used for countless (and very different) things.

Right now their biggest use (in the U.S. anyway) is as access cards in satellite TV receivers. In Europe they’ve been around for a decade or so mostly as prepaid phone cards.

Understand, I don’t mean that you’ll be putting your new Visa card into your satellite box (though, someday, you probably will). They’re both ‘smartcards’ in that they have a smartchip on them, but are programmed to do totally different things.