Smart-cards can authenticate identity. Sometimes they employ a public key infrastructure (PKI). The card stores an encrypted digital certificate issued from the PKI provider along with other relevant information. Examples include the U.S. Department of Defense (DoD) Common Access Card (CAC), and other cards used by other governments for their citizens. If they include biometric identification data, cards can provide superior two- or three-factor authentication.
Smart cards are not always privacy-enhancing, because the subject may carry incriminating information on the card. Contactless smart cards that can be read from within a wallet or even a garment simplify authentication; however, criminals may access data from these cards.
Cryptographic smart cards are often used for single sign-on. Most advanced smart cards include specialized cryptographic hardware that uses algorithms such as RSA and Digital Signature Algorithm (DSA). Today's cryptographic smart cards generate key pairs on board, to avoid the risk from having more than one copy of the key (since by design there usually isn't a way to extract private keys from a smart card). Such smart cards are mainly used for digital signatures and secure identification.
Some of these smart cards are also made to support the National Institute of Standards and Technology (NIST) standard for Personal Identity Verification, FIPS 201.
Turkey implemented the first smart card driver's license system in 1987. Turkey had a high level of road accidents and decided to develop and use digital tachograph devices on heavy vehicles, instead of the existing mechanical ones, to reduce speed violations. Since 1987, the professional driver's licenses in Turkey have been issued as smart cards. A professional driver is required to insert his driver's license into a digital tachograph before starting to drive. The tachograph unit records speed violations for each driver and gives a printed report. The driving hours for each driver are also being monitored and reported. In 1990 the European Union conducted a feasibility study through BEVAC Consulting Engineers, titled "Feasibility study with respect to a European electronic drivers license (based on a smart-card) on behalf of Directorate General VII". In this study, chapter seven describes Turkey's experience.
Argentina's Mendoza province began using smart card driver's licenses in 1995. Mendoza also had a high level of road accidents, driving offenses, and a poor record of recovering fines. Smart licenses hold up-to-date records of driving offenses and unpaid fines. They also store personal information, license type and number, and a photograph. Emergency medical information such as blood type, allergies, and biometrics (fingerprints) can be stored on the chip if the card holder wishes. The Argentina government anticipates that this system will help to collect more than $10 million per year in fines.
In 1999 Gujarat was the first Indian state to introduce a smart card license system.As of 2005, it has issued 5 million smart card driving licenses to its people.
In 2002, the Estonian government started to issue smart cards named ID Kaart as primary identification for citizens to replace the usual passport in domestic and EU use. As of 2010 about 1 million smart cards have been issued (total population is about 1.3 million) and they are widely used in internet banking, buying public transport tickets, authorization on various websites etc.
By the start of 2009, the entire population of Belgium was issued eID cards that are used for identification. These cards contain two certificates: one for authentication and one for signature. This signature is legally enforceable. More and more services in Belgium use eID for authorization.
Spain started issuing national ID cards (DNI) in the form of Smartcards in 2006 and gradually replaced all the older ones with Smartcards. The idea was that many or most bureaucratic acts could be done online but it was a failure because the Administration did not adapt and still mostly requires paper documents and personal presence.
On August 14, 2012, the ID cards in Pakistan were replaced. The Smart Card is a third generation chip-based identity document that is produced according to international standards and requirements. The card has over 36 physical security features and has the latest[clarification needed] encryption codes. This smart card replaced the NICOP (the ID card for overseas Pakistani).
Smart cards may identify emergency responders and their skills. Cards like these allow first responders to bypass organizational paperwork and focus more time on the emergency resolution. In 2004, The Smart Card Alliance expressed the needs: "to enhance security, increase government efficiency, reduce identity fraud, and protect personal privacy by establishing a mandatory, Government-wide standard for secure and reliable forms of identification". Emergency response personnel can carry these cards to be positively identified in emergency situations. WidePoint Corporation, a smart card provider to FEMA, produces cards that contain additional personal information, such as medical records and skill sets.
Smart cards are also used to identify user accounts on arcade machines.