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Smartcard vs Magnetic stripe.

Which is better, the smartcard or a magnetic stripe card? The smartcard vs magnetic stripe card battle is one which will probably be waged in South Africa for a few years to come. Internationally, however, the smartcard is gaining ground as service providers realise its advantages.

Local smartcard producer Integrated Card Technology (ICT), along with its German shareholders - Giesecke & Devrient (G&D) and Orga Kartensysteme (Orga), believes that smartcards hold the key to unlocking real potential in every service sector.

Already having established themselves in Europe as the leading smartcard suppliers, ICT's shareholder Orga recently launched a smartcard-based mobile office for use in health care. The system provides a completely portable data collection and records system for people receiving care at home and at regional health centres. The card is able to store the patient's biographic details, the diagnosis, the treatment received as well as prescriptions. This enables up-to-date records to be held on the card at all times and is accessible only by authorised health care practitioners.

"That would never be possible on a magnetic stripe," explains Nikki Kettles of ICT. "The average magnetic stripe card can only store approximately 226 characters whilst a 1 KB chip can store approximately 1024 characters. The average smartcard microprocessor is 16 KB at present - with a 32 KB chip having being launched in South Africa recently."

Furthermore, it seems that the smartcard, because it can store so much more information than the magnetic stripe card, ensures that there is no need for masses of data storage hardware. This not only cuts down on the cost of the hardware, but also cuts down on administration. In the case of a medical smartcard, there is no need to write out a prescription, there is no need to fill in forms if and when you change medical service providers and there is no need to send out statements as the information and payment details are encrypted directly on to the card.

For a magnetic stripe card to work, the service provider is required to swipe the card, the card then processes the information via an on-line system and will then authorise the card. A smart card works off-line and does not need to be processed on-line. This saves time and it saves on employment costs. In the case of loyalty programmes, if a service providers system is off-line and a magstripe card is being used, the consumer will be required to come back the following day, in a few hours time or even to phone-in to a queries line. This means that the retailer is compelled to have toll-free lines as well as extra personnel to deal with the queries.

When one looks at the costs of purchasing a smartcard to that of a magnetic stripe card, the smartcard appears more costly being priced at approximately R7 each compared to the magnetic stripe cards which cost approximately R1 each. Although the initial cost of the magnetic stripe card is lower, one must remember that a magnetic stripe card will require replacing after approximately two years, whilst the life of a smartcard is approximately five years or longer. This, added to the cost savings that a smartcard provides in personnel, hardware and administration, should be taken into account when deciding which option would be best.

"Most applications are suitable for smartcards," explains Kettles, "but the high-tech smartcard image may not suit every service provider. I do feel that in this day and age of technology becoming more sophisticated by the hour, the smartcard is something every service provider should consider using."

For details contact Integrated Card Technology on tel: (011) 608 1803.

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