The Driver and Vehicle Licensing Agency (DVLA) has launched a public consultation on the issue.
It will also carry out a 12-month trial of 30,000 chipped provisional licences in Wales next year.
The chips will contain the information shown on current ID photocards, as well as a high resolution photograph of the driver.
The DVLA hopes to eliminate driving test fraud as a result of more detailed licences. The plan is to eventually replace paper licences with the new smart cards.
Such a move would allow employers and leasing companies access to a driver’s details and penalty information on one card.
John Pryor, travel manager at ACFO, welcomed the proposal. He said it will make life easier for fleet managers and will bring the licensing system into the 21st century.
The BVRLA was also enthusiastic about the scheme. Head of communications Robin Mackonochie said: “We like the idea of having as much information on the card as possible and we’d be delighted to see the back of paper counterparts.”
However, he added: “There’ll be quite a significant cost to rental and leasing companies – equipping branches with readers, and the driver that goes out to drop off the car has to have a reader as well.”