The Evolution of Smart Card Technology

For the purpose of this forum it might be interesting to mention a few types of smart card which are related to application.

• Electronic Purse - This is an application of smart card whereby the card becomes a portable device which contains electronic money (also referred to as the electronic wallet or the stored value card).


• Security Card - This type of smart card is specifically geared toward the Identity Management (IDM) software for remote access, secure sign-on, and digital ID cards.


• JavaCards - This type of smart card is capable of running JAVA byte codes.  It is geared toward eventually being able to run some of the applications currently running on your PC.

History of Smart Cards

Smart cards, it is shocking to note, have been around since the 1970s.  The evolution of the smart card has been a bit of a surprise.  The intention for this bit of technology was originally to be the successor of the magnetic stripe card and was basically to be used for debit and credit transactions within the financial sector.  This has become, to date, only a very small portion of the application of the technology.  The big bang conversion from the old technology in the financial sector has also not yet materialized.

Many factors have contributed to this slow migration, the most important being the initial cost of replacing the old infrastructure with the new.  The cost of replacing the physical credit or debit cards with a new smart card is small in comparison to the expense of purchasing and installing of thousands of card reader terminals and the software to run it.  Consider this:  In the United States of America alone there are over 14,000 banks.  As you can imagine, each of these banks has their own business flow.  The logistics of getting all these banks to conform to one technology in order to be fully integrated will be a near impossible task.  It becomes obvious that we would need to go through a phase of catering to both the old magnetic stripe and the newer smart card technology from the same terminal.

As much as we would like to attribute our formidable progress in smart card technology to being technically advanced in world terms, the stronger argument would have to be the lower cost of manufacturing the cards and the hardware to use them in South Africa.  Various applications of smart card technology have occurred within South Africa for at least a decade.