Digital wallets, digital bankcards, digital credit cards and digital loyalty cards are becoming more and more popular. These digital cards are called SmartCards, and the driving force behind SmartCards is the removal of cards from your wallet. Instead of having a wallet full of cards, you have a digital account, and if you have a SmartCard, then you may take one card out with you and access all your card accounts with it.
The Pros And Cons Of Digital Wallets And SmartCards
The biggest benefit of digital wallets and SmartCards is that you may access your cards with your phone and/or computer without having your card in your hand, and there is added security by the fact you cannot lose your digital card on the bus. The downside is that hackers are doing their double best to hack the card companies, their apps, and to install malware on people’s phones to access their digital cards. Plastc, Coin, and Swyp do not store your card information on servers, all your card numbers are stored on the SmartCard and the information is encrypted.
Optional Perks That Digital Wallets And SmartCards May Have
Checking your balance is a little easier, and cancelling your cards may also be easier, though that depends on the issuing company. The ability to lock and unlock your card is a perk that many people happily welcome, but again, whether you get that perk depends on the issuing company. Being able to sign in quickly via your mobile or desktop device is a digital card and digital wallet advantage. Also, if you have a SmartCard, you need not take all of your cards with you when you go shopping, you may simply take your SmartCard and still have access to your many cards.
How SmartCards Work
The technology is still new, so we are probably going to see a variety of ways that SmartCards function. Your best bet is to visit the Plastc, Coin, and Swyp websites to see how each card works. SmartCards look like thick versions of a credit card, yet you may scan them in payment terminals. Currently, there are Plastc, Coin 2, Swyp and Stratos SmartCards, but Stratos is now out of business with only an intermediate company offering support for its remaining customers. There is only a vague hope that Stratos will return.
Your SmartCard is not like a new credit card, it is more like a scannable wallet that allows you to use numerous credit, bank and loyalty cards. SmartCards currently allow you to swipe them at payment terminals and they allow you to pay using contactless technology if the merchant has it. Chip-and-pin SmartCards will one day exist, but they are not available now in the year 2016.
Using Your SmartCard
You first have to load your cards onto your SmartCard. When you join Coin, Plastc or Swyp, you receive your SmartCard through the post and you receive a card reader that you attach to your phone and/or your computer (depending on which company you choose and which options are available). You then have to download the software and/or app for whichever SmartCard company you chose. The card reader will read your card and add the information into the database of the software or app you downloaded. In other words, swipe your cards into the card reader, and it adds their information into your virtual wallet that you may access with your SmartCard.
All three SmartCard companies ship a small card reader to you for your personal use. Your bank and debit card information could easily be added to your virtual wallet manually, but with a card reader, you may also swipe your loyalty cards into your virtual wallet.
What About Data Protection?
In this instance, you are going to have to do your own research into whichever company you choose. All three of the companies should at least be PCI DSS (Data Security Standard) compliant, but we have no way of truly confirming it at this time (2016).
What Are The Security Concerns?
A big security issue is that somebody may gain access to your card and start swiping it around town. There are two defenses against this. The first is the “lost card” protocols mentioned below, and the second is your ability to easily lock your card.
You may lock your card by calling the issuing company’s customer service department and locking your card until it is found. You may also lock your card via the app or software that comes with your SmartCard. Also, if a thief uses your credit cards on the SmartCard, there is a chance you may be able to claim some of the money back. However, if a thief gains access to your SmartCard, he or she will have a period of time in which he or she may spend your money freely. Plastc also has an ID function that shows your face to verify to the retailer that you are who you say you are.
More Security Worries With SmartCards
The second security issue is that you may lose your card and somebody will have free access to spend all your money. All three SmartCard companies have come up with solutions for this problem that may also act as solutions for the first problem.
All three SmartCard companies say that if your card moves out of range of your phone, then it will lock automatically. This poses a few problems, but we will circle back to that. If your SmartCard locks with Swyp, you will have to enter a four-digit PIN to get it working again. Coin has you enter a series of specific button presses that are unique to your card instead of entering a PIN number. Plastc allows you to determine how quickly your card shuts down after your phone moves out of range of your SmartCard, and then allows you to unlock it via your Smartphone app or computer software.
Even More Concerns You May Consider
Another security concern is that you are loading a lot of important financial information onto one piece of software and into one device. Hackers are going to dedicate years of their lives to trying to break into people’s apps on their phones, or trying to break into the SmartCard databases to get at the wealth of financial information they contain. Even if financial information is not held on the SmartCard servers, the information their servers do contain may make hacking a phone or app easier, and may help give hackers control over a user’s app or account.
Furthermore, we have already seen how bank and credit cards may be cloned with clever technology. How long will it be before a device is invented that can harvest information from a SmartCard without even touching it? There is talk of the addition of chip-and-pin to SmartCards, but it isn’t a reality yet.
Problems With The SmartCard Security Solutions
Plastc has an ID function that shows your face to verify to the retailer that you are who you say you are which they hope will make it more difficult for thieves to use stolen SmartCards. However, such a mechanism is weak at best because there is nothing illegal about using another person’s bank or credit card if you have permission, and few retailers are going to check your SmartCard ID to see you are the rightful owner of the card (even if they know how to).
If your phone moves out of range of your SmartCard, then it locks up. Its sound okay, but what if you leave your phone somewhere and not your card? What if your phone battery dies? Or, what if you lend your phone to a friend across the room? What if you don’t have a Smartphone and you used desktop software to manage your virtual wallet on your SmartCard?
The Smartphone and desktop apps/software make locking your SmartCard far easier than reporting your bankcards stolen or lost. It is easier and quicker to lock down your SmartCard, and some SmartCards will erase your information if you lock down the SmartCard. However, there is still a window of opportunity for thieves between the time your card is lost/stolen and the time you lock your card. A thief must simply visit as many shops as possible and spend money while hoping not to exceed your bank or credit card limits.
What Is The Point Of A SmartCard When Mobile Payment Exist?
There are some people that believe the world is not ready for mobile payments such as Apple Pay and the Google Wallet. There are others that believe mobile payments via virtual wallets are a pain in the ass.
Some people do not want to rely on their phone to allow them to pay for things. They do not want their phone to hold them up in a queue as it slowly loads your virtual wallet because it has 16 other background functions underway, and people do not want to rely on the life of their phone battery to determine if they pay with their phone.
A SmartCard doesn’t have a battery that dies out every day like your Smartphone. The Coin battery lasts for two years and is non-rechargeable, which probably means you need a replacement card every two years. The Plastc card currently requires charging every 30 days with the device the company provides, but this may change as the card evolves. The Swyp batteries are non-rechargeable and last up to two years with moderate use, but future models are set to be rechargeable.
Contactless technology will eventually be as common as swipe terminals and chip-and-pin terminals. However, SmartCards still offer a number of advantages that mobile payments do not, including ease of use, portability, lack of frequent recharging, and better security due to fewer potential backdoors. Mobile wallets will certainly shake the future of SmartCards, but one gets the feeling the SmartCards will be around for a long time and may even become more popular than mobile payments in the long run.
A Potential Perk Of SmartCards
There is also the potential for extra software thanks to SmartCards. For example, if you wish to maintain a budget, it can be tough adding information to your budget. If you run all of your transactions through your SmartCard, then it can monitor your spending, and since it is attached to your bank accounts, it may also be able to monitor your income. A little additional software may allow it to update your budget for you and even give you warnings when you are projected to go over your budget.
How To Pay With Each Card
It is not as simple as using a credit card because at the very least you have to pick which card you are going to pay with. Plus, if you are using a loyalty card, you have to select your loyalty card, wait for the SmartCard to be handed back to you, and then select your payment card.
Press the activation button on the card and navigate through to cards you have on your device using the LED display. Find the card you wish to pay with and select it.
There is a large e-ink display that is supplicated enough to show your photo ID. Press to activate the card, and swipe the display until you see the card you wish to pay with. You may arrange your cards to determine which comes up first every time.
Click a button to wake up the card and a small display will appear. Choose your card with the buttons and select the one you wish to use. The software will eventually recognize your payment patterns and will display the cards it thinks you are most likely to use first.
Conclusion – SmartCards Are Accepted Almost Everywhere
Virtual wallets that are combined with mobile payments require the merchant to have some form of contactless technology, and yet such technology is not very widespread at the moment. Card reading (swipe or chip & pin) card terminals are very common, and those terminals are able to read some SmartCards. In addition, SmartCards also have contactless technology. Companies such as Coin have already released a list of major brand companies that do not (yet) accept Coin SmartCards. When SmartCards also have Chip-and-Pin technology, then even more businesses will accept them.
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Which is the best SmartCard? At the moment it is very unclear, but based on customer interest and the level or technology, one has to assume that Plastc will “eventually” emerge the winner.