Keith,
Here it is -
Get Ready For Push Toward 'Smart Cards'
Date: 12/29/98
Author: Susan E. Fisher
A battle is brewing for control of your wallet.
Banks, merchants, government agencies and technology firms are looking at ways to swap those credit and bank debit cards in your
pocketbook for ''smart cards.''
These plastic cards look like ordinary credit cards, but they get added intelligence from computer chips. The devices can run simple programs
and store 80 times the data that a standard credit card holds on its magnetic strip.
The various entities promoting smart cards have been talking - and sometimes arguing - about them for years. The spotlight is falling on the
subject again now that Microsoft Corp. has announced it is developing smart-card operating software.
Microsoft's will be one of several operating systems expected to compete in this new market. Other systems from credit card leaders Visa,
MasterCard and American Express are being promoted.
''Just as there was a battle for the operating system for PCs in the 1980s, there will be a battle for operating systems for smart cards,'' said
Michael Killen, president of Killen & Associates, a Palo Alto, Calif., market research and consulting firm.
Why would you want a card with brains? Convenience and quick access to information may be two reasons. A multipurpose smart card may
handle the duties that now require a pocket-bulging assortment of cards, records, coins and cash.
Security may be another incentive. Smart cards can encrypt data in special code, making it difficult for unauthorized users to read stored
information.
With their processing power, smart cards can do a lot more than standard charge cards. Here are a few applications:
Digital cash - Smart cards known as stored value cards can act as an alternative to cash and coins. You would add value to these cards in much
the same way as you would get cash from an automated teller. Then you could use the card at a laundry, in snack machines or on train
turnstiles.
Digital combination locks - Smart cards can become company passes, used by employees to enter the firm's computer network, Internet service
or even outdoor gates.
Record keepers - With a smart card, you could potentially keep medical records, prescriptions, frequent flyer points and other key bits of
information in your back pocket.
Virtual coupons - Merchants may keep track of purchases made on smart cards and automatically reward customer loyalty with discounts or
special deals at the register.
There are numerous smart card trials going on at military bases, on corporate campuses and in other select markets.
The University of Michigan has issued an ''Mcard'' to more than 93,000 students, faculty, staff and visitors, says Bob Russell, assistant director
of financial operations. It can serve as an identification, building access pass, long distance calling card, stored value card and debit card for
making purchases on campus or off.
But don't expect smart cards to pop into your wallet overnight.
''It's not going to hit like a tidal wave, more like a rising tide,'' said Donna Farmer, president of the Smart Card Forum, an industry group based in
McLean, Va. Smart cards for financial transactions should hit the market in the next three to five years.
Merchants and banks have to make a strong case to justify the billions of dollars it will take to replace standard credit and debit cards, analysts
say. It's vital that companies promoting smart cards agree on technology standards and business practices.
Firms must sort out who is responsible for customer service and who is liable for lost or stolen cards, says Theodore Iacobuzio, senior analyst
with The Tower Group, a research firm based in Newton, Mass.
''Eventually these systems have to become interoperable or it is not going to take off in the U.S.,'' Iacobuzio said.
(C) Copyright 1998 Investors Business Daily, Inc.
Metadata: MSFT I/3270 E/IBD E/SN1 E/FRT E/TECH |
