There are two types of smart cards. Memory cards contain non-volatile memory storage components only.
Contact and contactless smart cards require different components to complete transactions. Contactless smart cards have an internal power source and can be used in proximity to antennae. A contact smart card does not contain an internal power source and requires contact with a card reader to complete a transaction.
A smart card can be programmed with a great deal of information and applications. For example, a single contact or contactless smart card has the ability to be programmed with banking credentials, driver’s license, medical or insurance information and club memberships. Due to the types of information that may be on a smart card, they can be programmed to only allow a contactless transaction if they are in range of another device. An example of this is allowing a contactless transaction only if the card is in range of a specific cell phone which has been paired with the card.
Part of the convenience of a smart card is that it can provide a wealth of information on just one card. If a smart card is lost, it requires only one card to be replaced rather than the plethora of cards a consumer may carry with them on a daily basis.