Standards incomplete but smart cards are ready

Smart card technology is mature enough for implementation now regardless of incomplete standards, according to industry experts at the Cards Canada 99 show in Toronto in June.

“There are a sufficient number of standards in place to get started with smart cards, especially in Canada,” said Philip Yen, senior vice-president for emerging technologies with Visa International, during a panel discussion called “Standards and Interoperability.”

Yen said interoperability issues for credit/debit, electronic purses (e-purses), and travel and entertainment cards have all been defined and are independent of any operating system or platform running on the card. He said there are still some minor standards to be worked out, but he added there always will be.

Keith Saunders, vice-president of technical sales and support for the MAOSCO consortium of smart card companies, pointed out that companies jump into other endeavours, such as e-commerce, without standards because there is an immediate business need.

The panellists agreed that companies with a viable business case for using smart cards have begun implementations, while those companies without a business case are the ones bemoaning the lack of standards.

“A lot of people have gotten bogged down in standards over one or two applications…and that’s stopped people from going ahead,” Saunders said. He added that the United States is behind the rest of the world in smart card deployment, and “people pay too much attention to the U.S.”

But technical standards aren’t the only factor holding smart cards back, according to the panellists at another discussion called “Smart Cards in Canada.” There is also a social hurdle to be overcome.

“Any new innovation comes with the question, ‘What do I do with this? Where can I use it?'” said Richard Thomas, director of marketing and communications for the Mondex Canada Association.

Thomas said the public is more savvy these days and accepts new innovations more readily, but the leap to smart cards is still a major one.

The public concern over confidentiality with smart cards was discussed as well.

“Smart cards won’t change confidentiality at all. Banks won’t allow that to happen,” said Bryce Hutt, senior leader of card products and marketing at Scotiabank. He said banks have been controlling confidentiality for a long time and aren’t going to let that slide with a new technology.

Bill Norwood, vice-president of new business development at Cybermark, said there will likely be anonymous smart cards available for cash purposes, but the trade-off for anonymity will be a loss of other features such as tracking, use as a door pass and other links to a person.

“We will have to see what the public wants and they’ll have to weigh it out,” Norwood said.

The second panel also made predictions on where they believed smart card technology would be in two years and five years.

Mondex’s Thomas said: “I think five years from now we will be seeing smart cards in our wallets…with cash, stored value and debit.”

Scotiabank’s Hutt said five years is too far off to see, but added: “Within two and a half years I think we’ll see serious effort to build a smart card and credit infrastructure to combat fraud…It’s inevitable.”

Judith Wolfson, president and CEO of the Interac Association, pointed out that economic activity throughout the world, partially spurred by the Internet, will mean cross-border standards and interoperability will be key.

“We’re going to see a lot of deregulation globally (within five years). As new markets open up, we’ll have to find a way to deal with them. Chips [in smart cards] are going to be a major enabler in that.”

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