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    Smart Card Logic Catches On

    PRINCETON JUNCTION, N.J. - Smart card module shipments to the U.S. and Canada doubled in the first half of 2002 to $31.2 million, the Smart Card Alliance announced at its recently held annual conference.

    PRINCETON JUNCTION, N.J. - Smart card module shipments to the U.S. and Canada doubled in the first half of 2002 to $31.2 million, the Smart Card Alliance announced at its recently held annual conference.

    "It is obvious there is a significant uptake of smart cards in the U.S.," said Paul Beverly, chairman of the Alliance and VP of smart cards and e-transactions, SchlumbergerSema. "With most U.S. wireless operators now using smart cards in their mobile phones, there is an insatiable demand for value added applications running on smart cards. What is really exciting, however, is the large number of other sectors that are now implementing smart card-based solutions," said Beverly.

    Smart card-based systems verify, authenticate and protect a cardholder's identity and personal information. Major financial institutions, retailers, government agencies, healthcare organizations and enterprises use smart cards worldwide for secure identification, payment, transit and mobile telecommunications applications.

    One of the largest sectors contributing to the rapid growth of smart cards in the U.S. is payment cards. Ted Iacobuzio, financial analyst for TowerGroup, estimated that 6 percent of all active credit cards in the U.S. are now chip cards. Although it may take up to 10 years, Iacobuzio predicted that eventually the smart card is going to replace magnetic stripe cards for financial services.

    Eric Dumois, VP card association relations for Hypercom, reported that large retailers are preparing for the acceptance of smart payment cards by purchasing smart card ready terminals. "Fully 50 percent of all Hypercom payment terminals shipped in the U.S. are EMV certified and ready to download Hypercom's EMV certified smart card applications," said Dumois. EMV, an acronym for Europay, MasterCard and Visa, is the global standard for smart payment cards established jointly by the three organizations.

    One major player that is taking the lead is Target Corporation who has already issued over seven million smart card cards and plans to accept the cards in their stores and on their Web site with a new loyalty application that includes electronic couponing. "I think the Target program is brilliant," said TowerGroup's Iacobuzio. "It is capitalizing on the early days of chip to get traffic. It is capitalizing on bricks and clicks. And they are addressing an issue that faces every major private card issuer: How do you get the customers who are making high transactions out of a private card and into a MasterCard or Visa and keep them loyal? For Target the answer is smart cards," he concluded.

    The Smart Card Alliance is a not-for-profit, multi-industry association working to accelerate the acceptance of smart card technology.

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