Better than Magnetic Strips
Smart cards resemble the familiar, plain magnetic-strip cards, but are much more powerful and secure. Each card is embedded with an integrated microprocessor that can store a lot of information, such as the cardholder's personal information -- birth date, address, etc. -- medical history, bank accounts data, or authorized access to a computer network. Security is maintained through a combination of measures that can include PIN numbers, passwords, and public and private "keys" -- sophisticated encryption algorithms - stored in the microprocessor.
Electronic commerce and more
Smart cards clearly will bring convenience to consumers, much as credit and debit cards have done, and in many cases may reduce the need for paper money and small change. But they offer more, especially in their ability to handle multiple applications in one card. For example, an important use could be in health care. In emergency situations, paramedics could "swipe" an accident victim's smart card to get basic information such as blood type, allergies, and insurance policy numbers.
Making it all work together
A big part of the smart card story is making sure different cards from different manufacturers - as well as the applications that will go on their microprocessors - work together. IBM is a leader on both the technology and the standards fronts for smart cards. IBM, along with Netscape, Sun Microsystems, and other companies have created the OpenCard standard, a framework that provides for interoperable smart card hardware and software products. IBM also created the IBM MultiFunction Card Operating System, which provides the technology for hosting many applications from various industries on a single card.