Datapro Report

Smartcards Hit the Street

Jannette M. Alston

When two large banks and two large payment companies team up to sponsor a smartcard program, it must be more than just a passing fad. Citibank, Chase Manhattan Bank, Visa, and MasterCard are jointly sponsoring the New York Smart Card Program, which targets the upper West Side area of New York City.

Smartcards are used throughout Europe, and the technology is gaining momentum in the U.S. as well. (For more information, see the Cover Story "The Smartcard Invasion".) Consumer knowledge of smartcards has increased in the U.S., in part due to their use at the 1996 summer Olympics in Atlanta. But a stumbling block in smartcard use has been lack of m erchant involvement. By signing up more than 600 merchants in a specific area to participate in a smartcard program , sponsors of the New York program are addressing this issue.

Two types of cards were issued: Citibank customers received the Visa stored-value card; Chase customers were given the Mondex electronic-cash product. People can load up their smartcards with as much as $500 or as little as one penny. Customers of other banks can also participate, but at press time, you had to have a bank account (i.e., you couldn't load "money" into a smartcard using straight cash). Participating vendors include restaurants, retail stores, and even some merchants that previously accepted cash only, such as dry cleaners.

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