From: Harka <harka@nycmetro.com>
Date: Tue, 7 Oct 1997 17:48:08 +0800
To: cypherpunks@Algebra.COM
Subject: Smartcard trial in NYC
Message-ID: <19971007055951.64286@DosLinux.nycmetro.com>
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   Monday October 6 10:08 AM EDT 
   
Two N.Y. Banks Launch 'Smart Card' Test

   By Cal Mankowski
   
   NEW YORK - New York's two biggest banks and the Visa and MasterCard
   groups begin a test Monday to find out how readily consumers and
   merchants will switch from cash and coins for smaller purchases to a
   wallet-sized plastic card.
   
   The smart cards, billed as a quick, convenient alternative to cash for
   making everyday purchases, are being distributed to customers of Chase
   Manhattan Corp. and Citicorp. Chase Manhattan is the largest U.S. bank
   based on assets and Citicorp is ranked second.
   
   Citicorp's Citibank retail bank will issue Visa Cash cards to its
   customers. Chase Manhattan will issue its customers the Mondex
   electronic cash product which will appear under the MasterCard banner.
   
   Backers have said a key aim of the test is to demonstrate that the
   different technologies of the Visa Cash and Mondex cards are
   inter-operable" when it comes down to everyday usage. As one
   participant put it, the aim will be to show that two systems can be
   used over one terminal.
   
   Participants will also be hoping the smart cards will prove more
   popular than they did during a much-ballyhood test in Atlanta during
   the 1996 Summer Olympics.
   
   I would have to say it was not as positive as we thought it might be,"
   said one of the people involved in the Atlanta test.
   
   The person, who requested anonymity, said there was a "Catch 22"
   problem in the test -- with merchants declining to be involved because
   not enough consumers had the cards, and consumers complaining that
   there were not enough places to use them.
   
   Although the cards can still be used in the area, about the only place
   they are seen nowadays is the Atlanta area transit system.
   
   Another person familiar with the Atlanta test said that merchants
   surveyed after the Olympics said they liked it, citing among other
   things the added security that comes from not having a lot of cash
   around.
   
   The New York test has signed up about 675 merchant locations, a
   spokeswoman said Friday. The number represents an increase of about 35
   percent from mid-September.
   
   The area targeted for the cards is west of Central Park between West
   60th and West 96th Streets, encompassing an area known as the Upper
   West Side.
   
   A news release in September said Citibank and Chase would each
   distribute 25,000 of the smart cards to customers. Residents of the
   area who were not customers of either bank could get a stand-alone
   smart card from either bank.
   
   The smart cards work like a regular Automated Teller Machine card but
   contain a computer chip that lets customers load" value into the card
   at an ATM or at a special kiosk.
   
   As the cards are used at participating merchants, the purchase is
   deducted from the card's stored value.
   
   For merchants, the sponsors of the test say, the benefit is faster,
   more efficient transactions because the need to make change or handle
   checks is eliminated when the cards are used.
   
   Smart cards have also been tested successfully in closed"
   environments, such as athletics stadiums or at the Army's Fort Leonard
   Wood in Missouri, and participants have said the results have been
   good.
   
   The development of the smart card even gets people talking about
   carrying on commerce without any cash at all, although some believe
   that is a long way in the future.
   
   I just turned 50 and I have trouble envisioning that in my lifetime
   cash will go away," David Slackman, executive vice president of
   consumer banking at Atlantic Bank of New York, said in a recent
   interview. But, he admitted, the volume of cash will probably go down
   as other payment methods win popularity.
   
   Some proponents say the card industry is moving toward a
   "multi-application" card that includes a stored value feature, a debit
   or check" card component, and the traditional credit card.
   
   One issue that proponents of smart cards generally shy away from is
   the preference of some merchants to deal in an all-cash environment
   because of the opportunity to under-report income to tax authorities.
   
   Copyright, Reuters Ltd. All rights reserved
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