Discount smart card. Its advantages, differences and mechanism of operation.

[Tomcat]

Why is a smart card the best discount card? How to properly realize its potential in discount projects? How not to get lost in all the technological subtleties and open up new horizons for your business? We will try to talk about all this in our article.

A little history of the issue. The first discount cards were no different from ordinary business cards. Then cards with a magnetic stripe appeared. They remembered the size of the discount provided and could have several levels of value (gold, silver, luxury...). The mechanism for processing data from these cards is constructed as follows:

An identifier code is written on the magnetic strip, where the following are encrypted: data of the service provider, card data - its identification number, the amount of the discount provided for one category of goods. When reading a magnetic stripe, these three parameters are sent to a common data processing server, undergo verification (authenticity check) and are returned with a ready-made solution. The client is given a discount indicated on the card, which is deducted from the purchase amount.

At the same time, data about the service provided is stored only on the server and on the cash register. The discount amount does not change. Discounted product categories remain unchanged. You do not receive any data about a specific client and his private purchasing activity. You cannot conduct a full analysis of the discounted goods sold. You cannot limit the service life of an individual card. You do not involve the client in the purchasing process because you are deprived of feedback from him. Additionally, magnetic stripe cards have a limited lifespan.

All these disadvantages are eliminated when using discount smart cards. Smart card - has a built-in microprocessor and built-in memory. This allows you to use the card to:

• Give different discounts on different products at the same time, or different discounts on different quantities of one product.
• Have a changing number of benefit units in the card memory. For example, reward points, reward minutes. Various bonuses - which can be awarded both for purchasing activity and for prepayment. All these bonuses, benefits, points can be changed, limited, appear and disappear as needed. This allows you to conduct temporary promotions on various categories of goods and services for holders of your discount smart cards.
• When activating a smart card, the client fills out a form (either on your website or on a paper form). This data is sent to the discount service center and is recorded on the card the first time the card is used. It gets its owner, and you get a client about whom you know everything you need. His priorities for purchasing a product, his email, average income level, where he prefers to shop (if you have several stores or offices). That is, you can, after analyzing the client’s behavior, offer him the product that he really needs.

Do not forget that by expanding the capabilities of the discount card, we have access to a program that processes data from all user cards. To some kind of “discount center” - and its capabilities are much wider than those of a card ID with a magnetic stripe.

• Storage and maintenance of databases. Both by cards and by payment terminals.
• Generating reports, creating charts and graphs.
• Possibility of setting up both a discount program as a whole and individual for individual cards.
• Possibility of maintaining several cards of one user (for example, old and new). Or creating user categories (corporate discounts).
• The ability to integrate your discount center into a network of several third-party discount centers. That is, the creation of inter-corporate discount projects.
• The ability to connect the discount center to the client’s “personal account” on your website for more expanded cooperation between you.

Now we need to consider another rather important issue. We'll take a closer look at smart cards. What they are, how they differ from each other. Smart cards were developed primarily as universal cards for use in a wide variety of industries. There are no smart cards designed specifically for discount projects. There are two main types of smart cards, which use different types of readers and have several fundamental differences. In addition, smart cards can be combined. That is, to be both contact and contactless and have a magnetic stripe. The presence of several information storage devices on a card proportionally increases its cost

Contact card with electronic chip​

To read the contact card, you must place it in the reader and, if necessary, enter the PIN code. Contact smart cards are most bank cards, telephone SIM cards, and some electronic keys. Such a card contains a built-in chip consisting of a processor, an operating system, and a control device that encodes access to card data. Such cards vary in cost depending on the amount of internal memory (from 256b to 1GB). The larger the card's memory, the more data it can store and process. And on the level of security of the card, on how strongly its data is encrypted.

For discount projects, there is objectively no need for a high level of encryption of card data, or the amount of memory that allows storing graphic files. The most common standard of such cards in discount projects and loyalty programs around the world are SLE4442 / SLE5542 memory cards. Having low cost and average memory capacity.

Contactless card​

Such punishments appeared a little later than contact punishments, but they have already become quite firmly established in our everyday life. There is no need to insert it into the reader and enter a PIN code. You just need to lean it against the reader for a second. It does not contain a visible chip; it is hidden inside the card. When exposed to an electromagnetic field, the antenna located inside the card turns on the internal microcircuit. Examples include contactless travel passes on public transport, Mastercard PayPass bank cards, and parking cards.

Contactless cards are slightly cheaper than contact cards, despite the functionality they share. But they do not have a large amount of memory or a high threshold for data storage security. The only problem with their use is the lack of availability of equipment that works with them. The most common and inexpensive contactless card around the world is MIFARE® Ultralight.

Disadvantages of smart cards​

The main disadvantage of smart cards is their high cost. This is due to the fact that the manufacturer of both contact and contactless chips are foreign companies that have protected their products with all possible patents. Apart from them, no one has the right to produce these chips. But there are no domestic developments. The second obvious drawback of a smart card is that it only works in contact with the reader, and is not autonomous. The third is the lack of smart cards focused exclusively on discount projects. ... But we can talk about the shortcomings of such cards only by comparing them with even better cards. At the moment there are no such cards. And even the emerging “virtual cards” are not yet competitors to “smart cards”.

(c) https://card-online.ru/articles