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Banking, transport or retail - smartcards have their uses

Smartcard 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 smartcards.

But smartcards are not only relevant to the banking industry, so says Pierre Kotze, executive at NamITech Financial Services. "While smartcards 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 smartcards offer, and the scope of possible uses, industries such as government, transport, healthcare and retail are considering smartcards as a way of enhancing their services. For example, in the retail industry smartcard-based loyalty programmes enable effective sales tracking, customer data mining and direct marketing campaigns."

Smartcards long-term potential lie 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. A further consideration is that card fraud has been escalating and the banks are looking to smartcards to help reduce the figures. Smartcards 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 smartcard solutions," concludes Kotze.

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