A smart card is a plastic card embedded with a computer chip that stores and logs data transaction. This data can either be a value, information or both. It is stored and processed within the card’s chip. The chip can either be used just for memory or can be used as a microprocessor to perform calculations and other functions. The card data is transacted via a card reader. Smart Cards are in use today throughout several applications, including health care, banking (like credit cards, ATM cards and Loyalty or Bonus Cards), entertainment and transportation. Smart card is an interface with a terminal in order to access the information on the card and provide a Character Display.

The terminal (or the PC/controller to which it is connected) must also be capable of storing any information that will be subsequently uploaded to the central database on-line. Smart card devices come in a wide variety of shapes and forms, ranging from smart card acceptance devices attached to a PC, point-of-sale (POS) terminals similar in size and shape to magnetic stripe POS terminals, and touch pads located on devices at parking lot entrances or on automated fare collection terminals. Other chip card compatible devices such as card dispensing machines, hand-held portable authorization terminals, balance viewers, and portable card-to-card processing terminals are available.