Two of the biggest credit card providers have announced
new cards based on chip and Pin and radio frequency identification
technologies.
At this week's Cartes 2004 conference in Paris, which showcases
the latest card technology, Visa announced plans to issue a chip
card that complies with the EMV (Europay MasterCard Visa) technical
specification for the next generation of debit and credit
cards.
Like the chip cards that are currently being rolled out in the
UK the Visa "mini chip" card allows cardholders to pay for
transactions by entering a four-digit Pin code into a terminal
instead of signing a receipt.
Visa also said that it would widen a pilot of a service to
verify the identity of card holders paying for goods online.
The service, called Verified for Visa, generates a one-off
password for the card holder for each online transaction. The card
owner inserts their card into a card reader, which verifies their
identity by exchanging information with the card providers IT,
systems.
Meanwhile, MasterCard announced a chip card that incorporates
RFID technology to allow for "contactless" payments like the Oyster
smartcard used on the London underground train network.
The card has RFID technology embedded into the card, which
interacts with a terminal. The payment is then cleared in the same
way as a normal transaction.
MasterCard said the first cards and terminals are ready for
testing by banks and merchants.
"OneSMART PayPass combines the power and security of MasterCard
M/Chip, with the speed and convenience of contactless payments,"
said Pascal Dufour, vice-president and head of Chip Product
Management, MasterCard International.
"Contactless payments are most powerful in places where speed is
of the essence - such as in quick-serve restaurants, petrol
stations and tollways. Cardholders simply tap their PayPass-enabled
card on the PayPass reader and are on their way."
Talking to Computer Weekly, Toni Merschen, senior vice-president
for MasterCard, admitted that smartcards had taken more than 20
years to get near widespread use, despite being tipped as a
replacement for cash. But he added that chip and Pin and
contactless payment technologies were now well-tested and could
offer businesses substantial benefits through reduced costs and
improved customer service.
Merschen said that the rolling out of chip and Pin technology in
the UK made it an ideal test bed for developing new applications
within smartcards, such as customer loyalty schemes.