What are Smart Card Readers?

Smart Cards have a microprocessor usually with public key infrastructure or PKI, and need a smart card reader to function.  PKI is the set of hardware, software, protocols required to generate, distribute, store, use and revoke digital certificates and encryption.    PKI makes smart cards effective in electronic authentication of identity, access control, financial transactions and more – assuming you have the means and ability to ‘read’ and communicate with the PKI on the smart card.   This is the purpose, function, and role of smart card readers, to “read” and facilitate secure communication with the smart card.  

Smart cards employ data encryption and data validation technology which offers more security than previous technologies serving bank card transactions. The microprocessor embedded in the smart card engages with the smart card reader and only then, after successful access, can a transaction or information on the card be transferred to electronic processes such as access control, personal identification, financial transactions and more. The smart card reader enables communication between the smart card and the host.

Smart card readers read the data that is stored on smart cards and are available in either contact (requiring manual insertion into the reader), contactless (operating via radio frequency with the smart card in proximity), or a hybrid supporting both contact and contactless.   Smart card and smart card readers are commonly healthcare, banking and finance, entertainment, travel and transportation and more.

How does a Smart Card Reader work?

Smart card readers are the interface between a computer host (local or network system) and smart card enabling 2-way communication.  Once the smart card is successfully engaged to the reader, the card’s microprocessor is accessible to the reader and computer host (local or network system).

Since the smart card lacks a power source, the card reader provides all processing energy required for the two-way data communication path and any app functioning.  Though makers of smart card reader makers have their own communication protocols, the general process boils down to:  

• Initially a user will present the smart card for communication with the smart card reader 
• The smart card reader responds and engages with the smart card – functioning as an intermediary between the user and  smart card. If data  transmission to an external information system is required, then this process ensues.

• Either:  

1) the now bridged local computer or external information system will respond to the smart card reader with processed data, or 

2) the smart card’s microprocessor will process data that is returned back to the smart card reader. 

Either way,  information or data is then returned back to the end-user who is the originating source. The spectrum of smart card readers is vast in differing features, intelligence and functionality – but operationally, there are two primary types: 

Contact Smart Card Reader

Just as is implied in the name, a contact smart card reader requires physical connection to read the smart card.  This connection generally occurs when a smart card is inserted in the reader, pinned to the reader, or making contact through a swiping motion.   

Contactless Smart Card Reader

Contactless smart card readers can engage with multiple smart cards simultaneously as the data exchange is performed by radio waves and no physical contact is required. Communication only requires close proximity of the smart card and the smart card reader.  Contactless smart cards are becoming common for fast and straightforward cashless electronic payment options for retail customers.

Where are Readers Installed?

Smart card readers are just one component of a highly intricate system making smart cards accessible for data processing. Thus, the smart card reader needs to be precisely aligned with and matched to functionality of the smart card. That being said, FEITIAN offers smart card readers for corporate settings, government facilities, university campuses, healthcare environments, network security, e-commerce transactions, finance and banking applications and more.

In sum, from an organizational and technological perspective, the integrated systems to bring functionality to smart cards are mainly tethered to the smart card reader.   Functioning as a bi-directional interface, the smart card reader powers the smart card and establishes a data exchange link.

Both contact and contactless smart card readers are ideal for employee identification, identity authentication, and private information storage requirements. Smart card readers provide are a platform standardizing flexible, safe and secure business processing, transactions, and authentications with minimal human intervention required.

Reader Applications

Security – Smart cards readers can require a two-factor authentication (2FA) level of security assuring access is only to authorized users. This applies to physical entry to spaces or rooms, or logical, access to online resources, network systems, computers or software applications.  2FA instantly neutralizes the vulnerability and security risks associated with compromised passwords – as without the second factor of approval, a compromised password is useless.

Hospitality – Smart card readers are widely used at gaming and theme parks, hotels, casinos, and resorts. Common applications include  cashless vending machines, facility and room access (pools, saunas, gyms)  and more.  

Education – Smart card readers are found at all levels of educational institutions for sensible and practical reasons. When connected to students’ IDs they can serve as access control (door entry), attendance recording, cashless catering and more. 

Smart card readers harden campus access control strategy by providing all-in-one:

• Building lockdown solutions
• Accurate attendance & door access reports  
• Centralizing multiple school building management 
• ID management for recurring visitors,  students, & staff 

Student ID smart cards embedded with RFID technology enable clusters of students to pass through open entry and exit points, rather than narrow  single file. Campus facilities and spaces remain exclusive to students with RFID ID smart card readers at the door, students can use their RFID student ID smart card to gain access. Campuses can improve dorm safety, secure computer and science labs with high-value equipment and protect research departments from unauthorized personal entry. 

Retail Commerce – Smart card readers are found in all levels of commercial retail environments, typically to enable quick and easy payments and simultaneously supporting and managing loyalty programs.

Healthcare – Hospitals have discovered the efficiency and added security of linking hospital employee ID badges to access control systems governed by smart card readers.   The threat of unauthorized intruders is ever-present and smart card readers effectively limit access to restricted areas only permitting authorized personnel entry.  Smart card reader based access control also provides greater flexibility and speed in securing a hospital with numerous entrances and exits in a ‘lockdown’ circumstance.

Since staff identification is generally placed on smart cards, smart card readers are positioned throughout hospital entry points effectively controlling access to spaces. Readers are also stationed near computers or medical equipment involving patient records. Hospitals are using two-factor authentication (2FA) systems supported with a variety of smart card readers to enable fast, transparent, and secure processes for both staff and patients. This ensures HIPAA-compliant authentication and improves productivity while maintaining focus on patient care with access control for nurses’ stations, medication carts, and other hospital equipment and resources.   Smart card readers enable:

• Restricted access to medicines, sensitives areas, and patient files 
• Restrict the assignment and operation of medical equipment and computer resources to authorized staff
• Compliance with protocols, record keeping and legal requirements while boosting efficiency and reducing cost

Most healthcare records are digital compliance with HIPAA and other security directives is a requirement.  Mindful that the average provider of healthcare logs in to workstations and applications 70 times per day, smart card readers allow them to swiftly login when needed with their staff ID smart cards and focus on achieving two-factor authentication and avoiding cumbersome and complex logins. The compact size of smart card readers makes them ideal for workstations, laptops, medical devices and carts, controlled spaces and more.

Finance/Banking – Online banking smart card readers offer two-factor authentication  (2FA) security and enable customers personal finance access on-demand and allow the transfer of funds electronically, 24/7.    

How Online Banking Smart Cards Readers Work

Online bank portals that only require a username and accompanying password are vulnerable to having that data be compromised to those will criminal intent.  This is why many banks require a bank smart card reader for online banking that works as  follows:

• Your online bank requests a unique code.
• Insert your EMV (Europay/MasterCard/Visa) bank smart card into a contact smart card reader.
• Enter your account personal identification number (PIN) into the reader.
• The smart card reader generates a unique one-time code that’s transmitted to your bank’s login access authentication protocol.
• Reply to the online bank’s request for a unique code with the code generated and showing on the digital screen display of the smart.