The difference between the two types of smart cards is the manner with which the microprocessor on the card communicates with the outside world. A contact smart card has eight contact points, which must physically touch the contacts on the reader to convey information between them. Since contact cards must be inserted into readers carefully in the proper orientation, the speed and convenience of such a transaction is not acceptable for most access control applications. The use of contact smart cards as physical access control is limited mostly to parking applications when payment data is stored in card memory, and when the speed of transactions is not as important.

A reader radiates a 1" to 20" electrical field around itself. Cards use a simple LC circuit. When a card is presented to the reader, the reader's electrical field excites a coil in the card. The coil charges a capacitor and in turn powers an integrated circuit. The integrated circuit outputs the card number to the coil, which transmits it to the reader.