Advantages & Disadvantages of Smart Card Technology

Updated February 21, 2017

Smart cards are plastic cards that look very much like credit cards. But smart cards can store much more than financial data, including contact information, personal profiles and many different types of files. Smart cards use a small embedded microchip to store vast amounts of data, much more than can be contained on a typical credit card. But even though smart card technology is powerful, businesses need to weigh the pros and cons before adopting it.

Greater Security

Smart cards have a higher level of security than many other types of data storage devices. The microchips that smart cards contain are individually encrypted, and the data they store is only accessible when the user types in a PIN. That makes smart cards a good choice for storing highly confidential data, sensitive information and data that is protected by Federal or state law. This protected and highly sensitive data can include everything from credit card numbers and Social Security numbers to tax information and health records.

Different Types of Data

Smart cards are capable of storing a wide variety of data types, in a wide variety of formats. Smart cards can store financial information, just like credit cards do. But in addition, smart cards can also store business information, telephone numbers, frequent contacts and more. The added flexibility makes smart cards a good choice for high volumes of data storage.

Data Integrity

One of the things businesses like most about smart card technology is the integrity of the data the cards contain. Unlike many other forms of data storage, once information is placed on a smart card it is there forever. The information stored on a smart card cannot be erased, deleted or altered. Smart card technology is also safe against electronic interference and magnets. That makes smart cards a good choice for storing valuable data that cannot be easily reproduced.


One of the most significant disadvantages of smart card technology is the cost. Compared to ordinary card readers, smart card readers can be quite costly, and many businesses find that they are not worth the extra money. In addition to the higher cost, smart card readers are not always compatible with all types of smart cards, or with each other. A number of different smart cards exist, and some of them use proprietary software that is not compatible with other readers.

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About the Author

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance writer since 2003. Her work can be seen on Credit Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.