While the phenomenon of electronic commerce started with the proliferation of plastic cards, and the wired point-of-sale terminals and bank teller machines that talk to them, the e-commerce wires are about to be cut.
That`s the view of Duncan Todd, group marketing director at JSE-listed Prism Holdings, who points out that most of the world - developed and under-developed - understand the concept of portable credit or debit tokens which can be used instead of cash for making payments.
"Most of this physical world commerce so far has happened around magnetic stripe based tokens, as well as the wired infrastructure of card acceptance devices and on-line back end processing systems.
"But this is changing -thanks to developments in smart card and wireless technology," he says.
Todd points out that a growing problem with payment cards today is that mag-stripe is no longer secure enough. Fraud - and in particular Internet fraud - is forcing the world to recognise that the whole payments infrastructure has to move urgently to the issuing, personalisation, acceptance and processing of smart card rather than mag-stripe.
"Chip cards or smart cards bring enormous security benefits that simply could not be contemplated with a token as relatively dumb as mag-stripe. The chip card is ultimately a portable computer - and it`s getting faster and cheaper every day.
"This computer-like capacity brings benefits which go beyond fraud prevention. It means that being on-line - or wired - is no longer a pre-requisite to securely transact or pay. It`s now possible for a card to trust or distrust a terminal whether it`s on- or off-line - wired or wireless.
"A terminal can also intelligently interrogate a card and locally satisfy itself that the card is valid and trust-worthy. The card can record a transaction and carry that record to the next point of service, and wait for a more convenient or more cost-effective on-line session later," he explains.
Todd says this wireless payment capability is generating enormous excitement in regions where being wired is not always cost-effective or practically reliable.
"That`s one of the reasons why national ID and purse cards are exploding in Asia-Pacific, but not generating great interest in the well-wired United States.
"The same is true for the emergence of wireless telephony - where you`re cheaply wired, wireless takes longer to take off," he adds.
"Wireless is increasingly about data rather than voice; data is about content and transacting; transacting wirelessly means changing the personality and functionality of the smart card you carry in your wallet, or the smart card (SIM card) in your mobile phone to identify you and authorise the movement of money that payment needs.
"The technology already exists to enable anyone, anywhere to transact wirelessly. All that`s required is for the banks, retailers and - for cellphone-based m-commerce - cellular network providers, to roll it out to the public," Todd concludes.
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