Interesting NY times article today...
There may be a link to this somewhere on the web, but on the first business page in today's Times is a big article re: Citi and Chase ending their test of electronic cash cards on the Upper West Side of Manhattan. A very amusing article, in that the banks seemed to have totally missed the mark in terms of adding customer value. Some great quotes, including,
"Smart cards are a technology chasing a business case," said Richard Speer, the CEO of Speer & Associates.
Other comments:
<<..In reality, most people who tried the system never loaded their cards a second time. And with few people using the cards, two-thirds of the merchants dropped out. Indeed, in the program's first year, less than $2 millon was spent using all the cards.>>
Another brilliant realization by a bank:
<<"When you localize your test on the Upper West Side, you realize your usage will be supressed, because everyone leaves the Upper West Side," said Judy Darr, the director of smart-card programs at Citibank.>>
IMHO, although I think it's laughable to expect consumers to find joy in STILL having to go to the ATM to load up a card with, say, $100 bucks to then swipe for their morning newspaper (and pay a bank $1.50 per month for the priviledge), I DO think some version of the Smart Cards will catch on over the next several years. For instance, perhaps your new computer keyboard will have a card swiper built in or something. Also, think how long it will take for a substantial number of retailers to invest in the hardware...
However, there appears to be a little light at the end of the tunnel:
Chase is working on a new version that...
<<will have multiple features, including the ability to make purchases over the Internet and to keep track of bonus points at various merchants' frequent buyer programs. "We've learned it takes more than just a plain vanilla product to be successful," Mr. Braco said (I think he's the 'Chief Executive for Overseeing the Obvious' at Chase, or something). "People find that if there is an incentive to use the card, they will use it more often.">>
Anyway, it's worth reading the full article to glean a little insight to why banks seem to lumber about before getting the model right.
Regards, RK |
