And the card may soon be used for other purposes, such as a debit card, credit card, bus pass, or at other points of sale. The possibilities of SIM card technology are practically endless. The authentication and encryption capabilities of the SIM prevent your phone from being stolen and your calls from being eavesdropped on. The SIM's digital memory, which stores information like your rate plan and service features, also allows you to easily personalize your service and contains user ID and billing information that can be switched between different phones. So, with your SIM card installed, you can make or receive calls personally even when you're using a borrowed phone.
Smart cards come in two formats which are functionally identical.
One version resembles a small chip and is semi-permanently placed inside the phone. The second version is similar to a credit card and can be used in phones equipped with a slot for the smart card. Either format can be ported into a borrowed or rented phone providing the size of the smart card matches the size of the smart card holder or slot in the phone. In GSM networks, an encryption algorithm scrambles the digitized voice transmission between the handset and the GSM transmission site. The information that is required to decode the encryption is hidden within the smart card.