Oscard Makes Phones Pay

Alan Joch

Smart Cards may be the rage in Europe, but in the U.S., a new approach, using remote-value devices, could be like putting automated teller machines (ATMs) in your pocket. Unlike Smart Cards, which hold digital representations of currency in their internal memory, remote-value devices store balance information for cash reserves that reside at a bank or other central location.

One of the first implementations of this strategy is the optical-scanner card called Oscard , from Brilliant Color Cards (San Rafael, California). Oscard is an evolution of the phone card, and in its initial implementation, it will be limited to purchasing phone services. B ut in the future, th e device could be issued by any type of commercial business, according to founder Larry Brilliant, who developed Oscard with Shelly Howard, a security expert.

Oscard includes a DTMF tone reader and decoder that convert telephone tones to digital information that resides in the card's memory. To conduct a transaction, the consumer simply dials an 800 number and uses DTMF tones generated by Oscard to tell the bank to transfer a payment to the merchant. Personal identification numbers (PINs) provide security against unauthorized purchases. The DTMF signals also can relay account balance information to the device.

An OCR scanner, which sits within a slit at one end of the device, reads proprietary OS code--a close relative to bar code--which you can swipe in from a printed check or, potentially, view from an ATM screen. The company uses proprietary OCR software. The next-generation Oscard, due commercially in September, will have an LCD screen fo r displaying account information.

Oscard takes advantage of relatively low phone service costs in the U.S. This keeps transaction expenses low even though an Oscard transaction requires two telephone calls (the first to a local telephone point of presence--or POP--using the 800 number, the second to the merchant, a toll call). Second, Oscard uses standard telephone equipment, so there are no added expenses for Smart Card readers. "There are 200 million phones in the U.S., and these are the best entry points for digital money," says Brilliant, who estimates the cards will sell for about $20. "This system isn't dependent on new standards or changes in the infrastructure."

Brilliant developed Oscard in part because he doesn't see the U.S. market embracing Smart Cards because of their expense and unresolved standards. In the meantime, Oscard blends established technologies like DTMF with the evolving need for electric money.

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Oscard

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Unlike Smart Cards, which store value internally, Oscard and its portable reader manage digital currency stored at a central location.

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Alan Joch is BYTE's senior editor for features. You can reach him on the Internet at ajoch@bix.com .