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A typical Contactless smart card system consists of a transponder (data carrier, e.g. a card, label or key fob) and a reading device (reader). When the transponder is within the reader's working distance, it transmits data to the reader via radio waves.
The technology is contactless because the transponder does not have to have physical contact with the reader - it is sufficient if the transponder is close to the reader (working distances range from a few centimetres to tens of meters depending on the frequency and kind of transponder used).
The transponder, in the form of a card, tag, key fob or label, consists of a silicon chip component and an antenna. The chip can be a simple memory component, capable of storing from 128 bytes up to more than 64 kilobytes of information (e.g., the monetary balance on public transport cards), or a complex microcontroller with cryptographic functions used to keep highly sensitive data and applications secure (e.g., ePassports).
Passive transponders use energy emitted by the reader's energy field to power the chip and communicate signals, whereas active or battery assisted transponders contain a battery that provides the necessary energy.
Passive transponders are commonly found in the form of cards, known as contactless cards. The contactless nature of such cards differentiates them from conventional contact-based chip cards known as contact cards. Despite the use of the term "contactless card", contactless cards include certain devices not in card form that contain chips, such as electronic passports. Other common transponders, such as RFID-enabled "smart" labels used in supply chain management, or contactless key fobs, are not classified as contactless cards.
Independently from the form of the transponder, the underlying and basic technology is the same: identification or communication of two or more devices via radio frequency.
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