These cards have a contact plate on the face which makes an electrical connector for reads and writes to and from the chip when inserted into the reader. Contactless smart cards have an antenna coil, as well as a chip embedded within the card. The internal antenna allows for communication and power with a receiving antenna at the transaction point to transfer information. Close proximity is required for such transactions, which can decrease transaction time while increasing convenience. A combination card functions as both a contact and contactless smart card.
Smart cards allow thousands of times the information storable on magnetic stripe cards.
In addition, smart cards are more reliable, perform multiple functions and are more secure because of high security mechanisms such as advanced encryption and biometrics. Privacy is a technology-neutral issue. It doesn't matter whether information is recorded on paper in a doctor's office file or resides in a payroll application on a mainframe computer. It is important to consider the privacy of information form the time it is collected, through the life of its use and until the time it is no longer needed and securely destroyed. It is not enough to protect information on a smart card.