TOKYO -- Frank S. Pierce, vice president of international marketing and business development of Hypercom Corporation, opined that "adaptive" software and touch-screen devices will increase consumer benefits and make smart card use a reality.
"The success of smart cards is tied directly to card acceptance devices consumers like to use and the behind-the-scenes infrastructure's ability to support rapidly changing electronic transaction applications," Pierce told IC Card '99 Conference attendees in Tokyo."Environments that process both emerging microchip-based cards as well as conventional magnetic-stripe based cards will also be requisite."
"The key to every technology adoption is ultimately consumer acceptance, not the technology itself. For the majority of consumers, successful technology is technology the consumer himself isn't aware of using. The more the technology itself is effortless and transparent to the consumer, the more benefit and value they perceive. Smart cards aren't yet at this point," he added.
Pierce said consumers want trouble-free, easy-to-use card acceptance devices at the point-of-sale. Also, behind-the-scenes infrastructure must be flexible, scalable, fast and high performing to support the demand for new applications like e-commerce, loyalty programs, online advertising, electronic messages and electronic signature capture.
"For these reasons, touch-screen card 'swipe' 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," Pierce said.
Out of more than 2.5 billion cards worldwide used to activate a commercial or personal financial transaction, only 99 million smart cards are in circulation. In the U.S., more than 650 million magnetic stripe credit and debit cards exist.
Pierce noted that the U.S. lags behind Europe, Asia and Latin America in smart card adoption. Driven in part by the rapid transition to the euro, Europe is the leading user of smart card payment solutions, with two-thirds of global use.
The average cost of a smart card typically exceeds $10, compared to four cents for a magnetic stripe card. However, smart cards offer greater information storage and processing capacity than magnetic stripe cards. They can be used 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, to customer loyalty programs by retailers.
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