FOR THE RECORD - MasterCard Probes Global Thought Leaders on Smart Cards and 21st Century Lifestyles
Experts Log on to Discuss New Technology and Impending Changes to Our Daily Lives
PURCHASE, N.Y., July 22 /PRNewswire/ -- MasterCard International hosted today an online forum with thought leaders from global business, government and research organizations to discuss lifestyle changes that will occur as smart card technology gains acceptance over the next five years. Representatives from IBM, Hitachi, British Telecommunications plc, the U.S. federal government's General Services Administration, The Tower Group and Emerge Online participated in the roundtable, which was moderated by Richard Phillimore, Senior Vice President of MasterCard's Chip Card Business unit.
''Five years from now, multi-application smart cards will be an established technology in the payments business,'' Phillimore said. ''As the benefits of multi-application smart cards are proven in the marketplace, the conversion from magnetic stripe to chip-based payment cards will be very rapid. By the year 2010, we expect all of MasterCard's credit and debit cards and terminals will be chip-based.''
Smart cards will deliver increased consumer value and utility to today's credit cards, Phillimore added. ''Chip technology will enable cardholders to use their cards for many more purposes, such as electronic ticketing, loyalty programs, and secure remote shopping -- a true Lifestyle Card that can be tailored to meet the unique needs and preferences of a single individual.''
The online forum also looked at how perceptions about electronic money will change over time, and how today's investments in chip card technology will pay off for business and government tomorrow. Those panelists invited to participate represent companies that will be at the forefront of the effort to bring smartcard technology to consumers on a mass scale.
During the online session, panelists offered a variety of perspectives on institutional leadership in the design and promotion of smart card programs from banks, telecommunications companies, and governments -- but there was unanimous agreement that loyalty programs and ''packaging'' of smart cards will be keys to their adoption by consumers. Steve Brown, leader of BT's Smart Card Business Development team, added that, ''BT believes that the primary role for telcos is in providing the connectivity to enable access to smart card applications across any number of different sectors.''
A key to the anticipated growth of smart cards will be their ability to assist consumers in making secure purchases any time, anywhere. ''Smart cards will play a leading role in the booking electronic commerce marketplace because they offer enhanced security and portability of the digital certificate used to securely identify cardholders,'' Phillimore said. ''One of the most compelling reasons for adding a chip to MasterCard cards is its ability to carry a secure digital certificate. Banks, as trusted organizations, could have a significant role to play in providing widespread distribution of digital certificates to their cardholders.''
Commenting on the importance of clever smart card marketing, Tod Maffin of Emerge Online added, ''Consumer adoption will be very much based on the ability of organizations to 'package' the card correctly. If all my loyalty programs are not only on my smart card but also work together to find me the best deals as a consumer, I'll opt for that card.'' Bruce Caswell, IBM's North America Manager for Smart Card Solutions, noted that, ''[IBM] is finding strong consumer interest in loyalty applications that bridge multiple retail settings, [and in] Internet payments.'' Diogo Teixeira of the Tower Group cautioned, ''Multi-application smart cards will incur additional overhead that must be carefully balanced against the benefits.''
The panel also addressed the use of smart cards for identification purposes. Many agreed that identification was the ''killer application'' that would encourage adoption of smart card programs. Kotaro Yamashita, COO of Financial Services at Hitachi, Ltd. said, ''We see identification applications issued by governments as being big in many places outside of Asia, for example Central America.'' However, Marty Wagner, Associate Administrator of the Office of Government wide Policy at the U.S. General Services Administration (GSA) cautioned that, ''national identity card programs could run into trouble in the US due to privacy concerns.''
Additional Observations
Hitachi entered the smart card arena in 1985 with the development of smart card-based ID systems and shopping systems. Today, Hitachi continues to be engaged in smart card business, providing secure chips, trusted devices and systems for smart card schemes such as Mondex. Hitachi sees the future of smart cards as an integrated network, offering financial settlement and information distribution all in one complete system.
Bruce Caswell of IBM sees smart cards handling multiple tasks for consumers: providing access to corporate networks, enabling electronic commerce, storing health care information, providing ticketless airline travel and car rentals, and offering electronic identification for accessing government services such as benefit payments and drivers licenses. IBM has been an industry leader in both technology and standards development for smart cards.
At the GSA, G. Martin Wagner is working to establish and evaluate policies for information technology to streamline the Federal acquisition process and to help drive the reinvention of government travel and transportation. With the spread of computer and Internet use, electronic commerce is becoming the preferred way of doing business with the government.
British Telecommunications plc began investigating smart card technology in the early 1990's as a possible replacement for its existing Payphone Phonecard system (which utilized Optical technology). The company's long-range vision for smart cards is for customers to be able to access smart card based applications and services ''any time, any place, anywhere,'' through appropriately equipped telecommunication linked terminals.
A full transcript of the session, as well as a biography and smart card white paper from each chat participant, can be accessed at golinharris.com.
MasterCard International has the most comprehensive portfolio of payment brands in the world. With 23,000 member financial institutions, serving consumers in 220 countries and territories, MasterCard is the industry leader in quality and innovation. More than 600 million MasterCard (R), Maestro(R), Cirrus(R), and Mondex(TM) cards are accepted at more than 15 million locations worldwide. In 1997, gross dollar volume exceeded US$600 billion. MasterCard can be reached through its World Wide Web site at mastercard.com.
SOURCE: MasterCard International
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