Smart cards also help eliminate this risk of counterfeit currency. T he new plastic magician would also help reduce the amount of loose cash lying with the public. This money could then be utilised effectively by the banks. Also, electronic money allows you to transact without taking money out of the banking system. Banks benefit because till you actually spend money they can create credit by lending the money.
Transactions are simpler.
At the end of the day the seller connects to the bank through a modem and drains out the money from the various accounts into his account. This way the consumer keeps his money safe and the vendors do with low infrastructure costs. This is the only alternative to cash. With their ease of operation and safety value, smart cards have been accepted globally. In six years, the worldwide volume of smart cards has increased five fold to 1.9 billion cards.