A smart card, chip card, or integrated circuit card (ICC), is defined as any pocket-sized card with embedded integrated circuits which can process information. This implies that it can receive input which is processed - by way of the ICC applications - and delivered as an output. There are two broad categories of ICCs. Memory cards contain only non-volatile memory storage components, and perhaps some specific security logic. Microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally PVC, but sometimes ABS. The card may embed a hologram to avoid counterfeiting.

A "smart card" is also characterized as follows:

• Dimensions are normally credit card size. The ID-1 of ISO 7810 standard defines them as 85.60 × 53.98 mm. Another popular size is ID-000 which is 25 x 15 mm. Both are .76 mm thick.
• Contains a security system - tamper-resistant properties (e.g. a secure cryptoprocessor, secure file system, human-readable features) and is capable of providing security services (e.g. confidentiality of information in the memory).
• Asset managed by way of a central administration system which interchanges information and configuration settings with the card through the security system. The latter includes card hotlisting, updates for application data.
• Card data is transferred to the central administration system through card reading devices, such as ticket readers, ATMs etc.

Benefits -- --

Smart cards provide a means of effecting business transactions in a flexible, secure, standard way with minimal human intervention.