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Smart cards

Smart cards are the next generation of plastic payment. The information is held on a small micro chip embedded in the card, rather than on a magnetic strip.

A micro chip can hold eighty times more information than a magnetic strip, and this additional capacity can provide new functionality. For example, one card could become multifunctional and serve as a credit card, debit card and 'electronic wallet'.

The use of a chip should also reduce fraud because not only are chips more expensive and difficult to counterfeit, but in the future additional fraud prevention techniques could be introduced such as fingerprint recognition and retina scanning technologies.

Micro chips will appear in more and more UK credit cards over the next few years, but micro chips and magnet strip technology will co-exist for the foreseeable future due to the logistics involved in changing all the cash machines and retailer terminals.

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