A Contactless Smart Card is like any smart card with an embedded integrated circuit (IC) but with an added internal antenna that can communicate data between the IC and the reading device. The communication is Radio-Frequency Identification (RFID) or Near Field Communication (NFC).
When the card is within range of the reading device/contactless terminal the IC is powered through electromagnetic induction and transmits its data through radio-waves. The range of distance for Proximity Cards (bank cards) are up to 75 mm.
Transactions carried out by:
RF Comms at 13.56 MHz (Incl. Anti-collision handling)
Security Encryption processing
Application Layer (EMV,MIFARE (Transport Sector))
Smart cards provide increased security over traditional magstripe only cards, massively reducing fraud. The processes for authentication, as well as ensuring all data transferred is encrypted, protects against middle attacks. The most important way to ensure data security for the future, is for manufacturers to make cards as tamper resistant as possible and payment systems to continue to incorporate the necessary security features.