Smart card technology has been around for many years. However, it is only recently that it is gaining significant ground in the commercial environment. This is largely due to the development of the EMV (EuroPay, VISA and MasterCard) specifications for payment systems. With these specifications in place, the three card associations have paved the way for universal acceptance of chip-based transactions for credit, debit or ATM cards. From mid-2003, South Africans can expect to see a lot more of smart cards.
But smart cards are not only relevant to the banking industry, says Pierre Kotze, executive at NamITech Financial Services.
"While smart cards have clear applications in the financial services industry, and of course telecommunications where it all began, increasingly broader applications are being developed within a number of different industries," says Kotze.
"Because of the benefits smart cards offer, and the scope of possible uses, industries such as government, transport, healthcare and retail are considering smart cards as a way of enhancing their services. For example, in the retail industry smart card-based loyalty programmes enable effective sales tracking, customer data mining and direct marketing campaigns."
Smart cards long-term potential lies in the ability to issue cards that carry a wide range of applications from different economic sectors. It is unlikely that people will want everything on one card, but multiple applications are a natural evolution. "Capable of storing, processing and managing data, one of the more significant advantages of smart cards over the magnetic stripe is that it allows businesses to create on one card multiple applications tailored to the desires of the individual consumer," continues Kotze.
"Other factors driving the greater acceptance of smart cards are security, mobility and convenience. This is where smart cards come in. They truly respond to the `anytime, anywhere` requirement. No consumer is interested in smart cards as such, but they are interested in what you can do with them. Their value lies in the way they assist in providing secure, but user-friendly access to information and services. Smart cards provide the best degree of extra security and they are completely portable."
A further consideration is that card fraud has been escalating and the banks are looking to smart cards to help reduce the figures. Smart cards can effectively combat fraud through offline card authentication methods (to prevent skimming counterfeit protection) and cardholder verification methods (to ensure that the cardholder is legitimate and the card is not stolen or lost).
"There are countless tangible benefits to be found for both consumers and businesses in smart card solutions. NamITech has extensive experience and skills in this growing technology, having first entered the smart card market as a supplier of SIM (Subscriber Identity Module) cards used in the cellular telecommunications industry. Realising their potential in other areas, we have since developed and implemented many customised smart card solutions for our clients," concludes Kotze.
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