Authentication Applications

Cards can be used to authenticate cardholders and card readers, thus allowing cardholders to gain access to a system to make transactions and electronically sign the transactions locally. It can rid the delay in online processing to gain access to a building and its facilities.

Stored-value transactions

A smart card can be used as an e-purse. Units of value are stored on the card as the electronic equivalent of cash and later used for purchases. It can also be used to store value as credits for goods and services like ticketing or canteen facilities. Smart cards are increasingly being used as loyalty cards to provide incentives to customers by storing a token value when purchases are made—the electronic equivalent of trading stamps.

More sophisticated smart cards can be recharged with value. Others can be disposable-types that can be discarded when the credits are used up. In either case it removes the handling and record keeping associated with collecting, collating or issuing of cash or items
of value.

Data and information

Smart cards can be used as portable records to store information, which needs to be independent of fixed locations.

Portable records might be required for objects as well as for individuals—for example, vehicle or equipment maintenance. They could be used for any application where information about the object needs to travel with the object. While passports and driving licenses are some of the likely candidates for the use of smart card technology, several countries are also planning to use it for payments of social services benefit schemes.

While the smart cards are broadly divided into the above three categories, experts believe that in future, for greater convenience, more than one of the above three main uses will be combined to offer multi-purpose stored-value cards.