Smart cards are cards that are embedded with either a microprocessor and a memory chip or only a memory chip with non-programmable logic. The microprocessor card can add, delete, and otherwise manipulate information on the card, while a memory-chip card (for example, pre-paid phone cards) can only undertake a pre-defined operation.
Smart cards, unlike magnetic stripe cards, can carry all necessary functions and information on the card. Therefore, they do not require access to remote databases at the time of the transaction. Integrated Circuit (IC) Microprocessor Cards (generally referred to as ''chip cards'') offer greater memory storage and security of data than a traditional mag stripe card. Chip cards also can process data on the card.