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To: Hippieslayer who wrote (2468)	5/19/1999 3:34:00 PM
From: hsg	Read Replies (3) \| Respond to of 3721

some information... New Infrastructure and Stronger Business Case Required for Broad Acceptance of Smart Cards Business Wire - May 19, 1999 14:12 ATLANTA--(BUSINESS WIRE)--May 19, 1999-- 'Adaptive' Software and Touch-Screen Devices Will Help Deliver the Benefits Needed To Make Smart Cards A Reality "Gaining broad-scale market acceptance of smart cards is tied directly to the infrastructure's ability to support rapidly changing electronic transaction applications," said George Devitt, Hypercom Corporation (NYSE:HYC) senior vice president of global marketing. "Environments that process both emerging microchip-based cards and conventional magnetic stripe-based cards will also be requisite." "In the final analysis, consumer acceptance is essential to the successful adoption of any new technology for use in the mass market," Devitt told attendees of the Merchant Payments Forum in Atlanta. "The more effortless and transparent the technology is to the consumer, the more benefit and value they perceive. Similarly, merchant investment in the infrastructure will require consumer demand, and a business case that is stronger than that based solely on stored-value is needed before merchants will accept and actively promote smart cards to consumers. Smart card applications simply aren't there yet." "Consumers everywhere want faster, more secure, convenient and reliable interactions without sacrificing control and personal service. At the front end there must be easy-to-use card acceptance devices for trouble-free point-of-sale interactions. The behind-the-scenes infrastructure must be flexible, scalable, fast and high performing to support new-century applications like e-commerce, loyalty programs, online advertising, electronic messages and electronic signature capture. For these reasons, touch-screen card acceptance devices and server-based application software are playing a central role, not a secondary role, in determining whether or not smart cards will become a widespread success." Of the more than 2.5 billion cards worldwide used for commercial or personal financial transactions, fewer than 99 million are smart cards. In contrast, there are more than 650 million conventional magnetic stripe-based credit and debit cards in the United States alone. The average cost of a smart microchip-based card typically exceeds US$10, compared to four cents for a magnetic stripe card. However, smart cards offer significantly greater information storage and processing capacity than conventional magnetic stripe-based cards. As a result, smart cards could be viable for an array of applications ranging from advanced credit, debit and stored-value cards by banks, to medical and eligibility records and authorizations by healthcare providers, and customer loyalty programs by retailers. In addition to new consumer-friendly card acceptance devices that support faster connections, the payments industry and others -- such as transportation and healthcare -- must also put in place "smarter, more powerful" software to handle increased payment volumes, distinguish between payment types, and support enhanced security and value-added services, Devitt advised. "The infrastructure must be able to 'read' the smart card's microchip and support the new programs that consumers value and that help banks and retailers better compete with advertising, branding and loyalty programs," Devitt said. "Advanced POS technology and value-added programs must go hand-in-hand for smart card usage to grow worldwide." Devitt noted that the acceptance of smart cards in the United States lags behind Europe, Asia and Latin America. Driven in part by the rapid transition to the Euro, Europe is the leading user of smart card payment solutions, with two-thirds of the global use. "The POS and banking/finance industries are in the early stages of a re-tooling for smart cards," he said. "Server-level application software and faster, portable touch-screen terminals that can read and process an array of card types and applications are in demand from companies that want to compete and prosper in today's fast-paced business climate."