Smartcards give way to e-commerce

Feature

Smartcards give way to e-commerce

Smartcards failed on the high street but the technology could help mobile e-business writes Caroline Davis

Smartcards failed on the high street, but the technology could help mobile e-business, writes Caroline Davis

Further evidence that smartcards have not fulfilled their promise of providing a cashless, one-card society came from last week's Smart Card 2000 conference.

The abandonment of e-cash schemes in Swindon together with uncertainty about the future of a Leeds project leave doubts about the practical benefits. Meanwhile advances in mobile e-commerce, are leaving question marks over the future of smartcards.

Heather Stark, who recently left her position as principal consultant at analyst Ovum, said there is still a "tremendous amount of uncertainty" about smartcards in the marketplace.

She believes there is a lack of acceptance devices, standard interface and protocols and network applications. Most importantly she questioned who actually benefits from smartcards, saying it is not clear what individuals gain from them. Stark foresees that card-type payments will take over, especially in mobile commerce, but that such payments would not involve smartcards.

A spokeswoman for electronic payments provider Mondex International des-cribed the company's trial of an electronic purse using smartcards in Swindon as "best forgotten". The project was terminated after five years during which the technology was superseded twice. Mondex is now focusing on individual industry sectors such as the Internet and digital TV rather than looking at a generic e-purse.

Although Visa Internat- ional continued with a similar Visa Cash scheme that began in Leeds in 1997, the company's future emphasis is unclear. The card was intended to be used for small purchases such as car parking and fast food, but take-up was low, according to early reports.

A source within Visa said that, like Mondex, the company aimed to "move on" from the scheme.

Visa also announced this week that it is teaming up with Nokia to develop a mobile e-commerce system which will use a chip in a mobile phone handset, rather than a separate smartcard, to make payments.

However, interest in smartcards is not dead yet. Prepayment Cards (PCL) said it would be part of a UK generic e-purse scheme using the Proton operating system that will be announced next month. And London Trans-port is pressing ahead with its Prestige smartcard ticketing project (see below).

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This was first published in February 2000

 

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