Smart card

A smart card is a card with a microchip in it. Such cards are used as a method of identification and authentication.

Plastic cards that allow to take out money from a automated teller machine (ATM) often are smart cards nowadays (Some of them still have a magnetic stripe which holds the same information). Very often the user is identified with a PIN. If the PIN is entered correctly, money can be withdrawn. If the PIN is not entered correctly, the card is blocked (after a number of false attempts).

At first, smart cards were used in public telephones in France, in 1983. There, the card simply stored a pre-paid credit. This credit was reduced when calls were made. Another way to solve the problem is that the balance is stored in a remote database. To make calls, a (usually toll-free number) is first called. From there, additional calls can be made. This eliminates the need for cards with chips on them.

Smart cards also have many other uses, such as for making payments. These kinds of cards are used a lot in Japan, Singapore, and the Octopus card in Hong Kong. ^[1]

1. ↑ Ling, Connie (2002-04-01). "Will Octopus Smart Card Make Hong Kong a Cashless Society?". Wall Street Journal. Retrieved 2018-03-18.