Introduction of smart card technology has found its way to a number of proprietary financial applications like credit/debit card transit application, Personal Identification card, loyalty card for purchasing applications...etc . This paper covers smart card and mobile payment schemes that are available in the market.
With the introduction of high ended smart card like java card as SIM card, even mobile phone is also equipped with payment applications. The next section describes briefly about the existing payment schemes in market. Also we cover in brief the potential of mobile payment schemes in the coming years. In the final section gave a small survey result regarding the future of electronic payments.
A smart card, a type of chip card is a plastic card embedded with a computer chip that stores and transacts data between users. The card data is transferred via a reader that is part of a computing system. Smart card-enhanced security systems are in use today throughout several key applications, including healthcare, banking, entertainment and transportation.
Application of Smart Card
A payment function is an integral part of most smart card applications because most
services accessible by smart cards must be paid one way or the other.
Smart card technologies provide strong security through encryption as well as access
control, based on identification technologies such as biometrics.
National ID / Authentication
In the wake of 9/11 attack a need has been felt in many countries for tamperproof ID
cards and a secure authenticating device. Many countries all over the world are trying out, and implementing, the smart card option as a national identity card.
The traditional student ID card can be replaced by an all-purpose chip-based student ID
card, containing a variety of applications such as electronic purse for vending and laundry machines), and for use as a library card, and meal card.
Smart cards are being used as an electronic purse, or epurse, to replace coins for small
purchases in vending machines and over-the counter transactions. This area is growing rapidly in Europe and the U.S.
Retail & Loyalty
Smart cards are used to record the transactions of the customer, which are helpful in
implementation of loyalty programs.Consumer reward/redemption is tracked on a smart loyalty card that is marketed to specific consumer profiles and linked to one or more specific retailers serving that profile set.
The chip-based cards help secure the initiation of calls and the identification of callers
(for billing purposes) on any Global System for Mobile Communications (GSM) phone
Mass transit fare collection systems are using smart tickets, which are easy to load and
redeem for a fare. These smart tickets can be disposable -that means use and throw away- or can be given only to regular travelers.
Advantages of Smart Card
Increasing data storage capacity
The smart card being most secure and proven for its security, but was not popular amount the payment schemes. The financial institutions were watching the developments in the area of smart card, until it get mature.
But inspite of its proven capability in the area of security, smart card failed to get enough popularity. One of the reasons of it is the lack of acceptance by the user.
The penetrations of mobile device like mobile phone and PDA have made a significant impact in the area of e commerce. The mobile operators are also try to sell “Hard” their product by providing additional value added services. Even the Customer wants to have useful application in their mobile devices. The financial institutions are looking for a new revenue generation business and M-Commerce is one of those new areas.
Steps are taken by the financial organization to set the standards for m-commerce. From the above discussion it is evident that the financial institute, mobile operator and customer are looking towards a reliable, flexible and proven frame work for mobile commerce. If this frame work is in place and supported by financial institutes, then customer will trust the new scheme and mobile commerce is going to be new area of commerce.