The History of Smart Cards

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The History of Smart Cards
The History of Smart Cards (Image: RodBegbie/flickr.com)

A smart card, also known as a chip card or integrated circuit card, is a plastic pocket-sized card that is used to store information about the owner of the card, usually involving financial transactions. It is especially useful for people or organizations in need of rock-solid security authentication.

Antecedents

In the 1950s, charge card company Diners Club produced the first card to use for financial payments. The company used a synthetic material called PVC which was a huge improvement over the paper-based cards of the day. Moreover, it conferred prestige on a select group that owned this card since members only need to hand over the card instead of counting cash.

By the time other companies like VISA and MasterCard entered this market, the PVC card evolved to a machine-ready card, then to an integrated circuit card, in response to a need for better security regarding transactions.

Patents

In 1968, German electrical engineer Jürgen Dethloff (1916 to 1981) and his colleague Helmut Grötrupp applied for the first ICC-related patents, which was finally approved in 1982. Kunitaka Arimura of Japan and Roland Moreno of France followed in 1970 and 1974, respectively.

1970s

It was not until 1977 that the smart card began to be mass-produced. Manufacturers Bull CP8, SGS Thomson and Schlumberger spearheaded the smart card's mainstream use. Two years later, Motorola developed the first secure single chip micro-controller.

1980s

In 1984, the smart card reached a milestone when the French Postal and Telecommunications services (PTT) successfully tested ATM bank cards with chips. Within two years, the use of smart cards proliferated throughout the world.

1990s to Present

In 1994, Europay, MasterCard and Visa came to a joint agreement on developing specifications for the use of smart cards in banking. This is called the EMV system. The use of smart cards continues to grow, applied to several activities from making phone calls to ATM withdrawals.

Benefits

Used for identification, authentication and storage of data, smart cards make transactions easier to conduct. They require minimal human intervention, provide strong authentication, and eliminate the burden of counting cash when making a purchase.

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