Smartcard briefs

February 2005 Access Control & Identity Management

Strong growth predicted for 2005

Smartcard vendors predict another good year in 2005, led by healthy demand in the mobile phone and banking sectors and new demand in government identity projects. SIM card demand is expected to grow to 1 billion units in 2005, up 14% from an unexpectedly strong 880 million units this year. Even faster growth is expected in banking and retailer cards, projected to grow 21% next year to 290 million cards from 240 million this year. Much of this year's growth came from the United Kingdom, where banks are well on their way to converting magnetic stripe credit and debit cards to smartcards. Government and health care is projected to grow 89% to 85 million units as governments introduce chip-based passports and ID cards. Counting the less-expensive memory cards used mainly as prepaid phone cards and in mass transit, chipcard sales are expected to grow just over 10%, from 2,11 billion units this year to 2,33 billion in 2005.

Smart supermarket cashiers

Long queues at the supermarket checkout could soon be a thing of the past according to MaxID. MaxID is using technology from its development partner, Sygade Solutions (Sygade) of South Africa. Sygade is one of the world's leading innovators in the development and supply of radio frequency identification (RFID) readers. Sygade produce a range of RFID readers for retail and other sectors and are developing complementary products including 'smart shelves' that automatically sense when specific products are added or removed, and send a message to the warehouse so they can be re-stocked.

The system is similar to bar code scanning but instead uses radiowaves to read product details and price contained on an RFID tag (a tiny computer chip) incorporated within the product packaging. Unlike a bar code scanner the RFID reader does not need to be able to 'see' the chip and it can read multiple items in an instant, no human intervention is required.

The technology is already in use in some retail supply chains and the US retailing giant Wal-Mart recently decreed that its top 100 suppliers must deliver goods on pallets, cases and cartons that incorporate RFID tags before 1 January 2005.

RFID technology for Hyundai

The Korean automaker will use PicoTag ISO 15693 compliant cards to monitor the flow of crated parts and supplies. Using the cards to identify the crates and boxes within each crate, accurate inventory data can be obtained quickly and easily. Hyundai will also use long range handheld tag readers. The application involves tagging each box with an RFID tag containing relevant data such as the box number, card information, subcontractor's information etc. These boxes are, in turn, packed into a bigger box, which is also tagged and delivered to Hyundai Cards by its suppliers. During the delivery inspection, Hyundai employees can easily check the content by reading the tags with the long range reader, thus verifying if the delivered products correspond with the placed order and the store database. Thanks to anti-collision capability and long range communication distance between the reader and the tags, the information is accurately read within seconds, without needing to open the box. The information is then sent to the central server for warehouse stock inventory and distribution management.

Congratulations to OTI

On Track Innovations' Saturn 5000 contactless reader has received Terminal Type Approval, Level II from MasterCard's Approval Authority, certifying the reader's application and electronics for use in the MasterCard PayPass contactless payment program.

MasterCard PayPass provides a simpler way to pay for purchases where speed and customer flow are essential, such as in quick-serve restaurants, convenience stores, gas stations and toll roads. Since cardholders can quickly pay with a simple tap of the card, a MasterCard PayPass card is more convenient to use than cash. MasterCard PayPass contains a contactless microprocessor chip and antenna inside the card, in addition to the card's standard magnetic stripe on the back of the card.

OTI has worked with MasterCard on its PayPass program from early in its inception. OTI is providing the contactless solution expertise, including the operating system, application support and inlay technology. It has successfully integrated its inlay technology with leading US card vendors and has already integrated its Saturn 5000 reader solutions with multiple point-of-sale providers to support MasterCard's PayPass program.

Sagem goes to China

Sagem and the Wuhan (Hubei), China company Tianyu have signed an agreement to develop business together in the Chinese smartcard market. The two companies have launched a joint venture for the manufacture of smartcards. This partnership enables SAGEM to become a significant player in the Chinese smartcard market - a market that is the largest in the world for telecoms applications and has substantial growth perspectives in the banking and security sectors.

Contactless transit smartcards

These have really taken off in China with 80 cities now using smartcards to pay for all types of transit fares. But other countries and cities are not so far behind. The following is by no means an inclusive list of contactless systems rolled out for fare collection:

Beijing in China, Chicago, Delhi, Florence, Gothenburg in Sweden, Helsinki, Ismir in Turkey, Joinvillein in Brazil, London, Moscow, Newark, Osaka, Paris, Qingdao in China, Rome, Singapore, Tokyo, Ventura country in California, Warsaw and Washington DC.

The largest system is in Hong Kong with 11 million cards issued for both transit fares and 2300 non-transit merchant locations. Next is Singapore with 5 million fare cards, Lisbon with 14 million, Moscow with 3 million, Tokyo with 9 million, Pusan in Korea with 5 million and Ismir with 3 million. In addition, 2005 will see smartcard systems launched in Sydney, Athens, Milan, Los Angeles, The Netherlands, Atlanta, Mexico City, New York, Santiago and Sao Paulo amongst others.

UK soccer uses smartcards, so does rugby league now

JJB Stadium, home to Wigan Athletic Football Club and Wigan Rugby League, is the latest stadium to install smartcards. In doing so, the JJB becomes a further stadium in the UK to sign up following in the footsteps of many other prestigious clubs including Liverpool FC, Manchester City FC, Reading FC and West Ham United FC.

As with all these stadia, Wigan Athletic and Wigan Rugby League are now enjoying the benefits of ultra quick and safe smartcard stadium access, provided through a platform which also offers fans the ability to use their smart contactless cards for in-stadium purchases, loyalty point collection and parking payment; and in so doing generates new revenues for the club.

Andrew Forsyth, JJB Stadium ticket office manager commented: "At the JJB stadium we were looking for a system that would control access for football, rugby and any other events, like internationals and possibly concerts. We needed an effective and proven product that we could rely on absolutely to ensure match entrances were fast and safe. We also wanted a system that could drive revenues and offer fans the best possible match day experience. Smartcards were able to supply a system that did all this and more, while offering the highest standard of customer service."

Smart schools

Loyalty card programmes have become so prevalent and successful in profit-making companies in influencing consumer behaviour that non-profit companies and public-sector entities such as schools have begun to employ them.

Schools are marshalling concepts refined in the card-marketing world to increase attendance and academic performance as well as encourage healthy eating habits among students in the United States and abroad. But the English were one of the first to take the latest loyalty concepts to school. Teachers contend that pupils are learning a valuable life lesson rather than treating the program like a game. Students often save their points for larger, luxury items, and forgo indulging in quicker gratification with smaller rewards. Participating students redeemed points for an award on average of five times in the inaugural school year, but many pupils are committed to a five-year savings plan.

"We feared the novelty value might wear off, but it really has not," says Chris Mulqueen, assistant head teacher at Isaac Newton. "It has been by far the most popular innovation at the school."

The innovation took little effort. "We simply applied the same techniques that we use for private-sector clients of our loyalty software," says a spokesman for the supplier. The firm is in discussions with other schools and education authorities interested in launching loyalty programs.

The government is spending a total of $7 million in grants for new ideas to combat truancy and raise academic standards. Isaac Newton receives $660 000 each year for three years to fund its loyalty card initiative.

Loyalty cards are not such a far cry from scholastic recognition programs that have rewarded many generations. "You got a gold star for having done your homework or doing the right things back when I was in school," says Peter Palmer, an independent loyalty consultant based in Toronto. According to Palmer, schools can teach retailers and card marketers a thing or two about loyalty.

"If anything, to apply loyalty at the school level without trying to control kids or be too commercial, you have got to get back to basics," he says, claiming that too many loyalty programs are overly concerned with expensive marketing and have excessively high redemption thresholds. He adds that if more schools adopt programs like the ones in Hull, England, or Massachusetts, "they may help retailers focus more on value, significance and benefit to consumers, which is what a lot of programs intended to do but got too caught up in marketing. A lot of retailers could stand to learn to think of the consumer again."

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