SMART CARDS: THE TECHNOLOGY

This research examines smart card technology, the adoption smart card technology by transaction card issuers in the United States, competitive strategies in the marketing of smart cards, and security issues involving the use of smart cards. One focus of this research is on the adoption of smart card technology in the United States, as opposed to the introduction of the technology, because the introduction of smart card technology in the United States occurred several years ago. The acceptance of smart cards by consumers and businesses in the United States, however, has been a slow process. The widespread use and general acceptance of smart cards in Europe contrast sharply with the situation in the United States (Hansell, 2001).

Several types of digital money have been developed or proposed. The digital money types including the following:

Icons (electronic tokens) stored on a computer's hard drive and transmitted over the Internet using a modem and special software

Monetary value loaded onto smart cards with embedded microprocessors for recording transactions and calculating changes in value, and

Hybrid versions that allow digital money to be uploaded from smart cards to a personal computer or downloaded from the computer to a smart card for greater portability (Coates & Bonorris, 1998).

The so-called smart cards ù the fourth and fifth

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ng is something new. In fact, however, electronic banking was initiated in 1871 with the money transfer service provided by Western Union in the United States. Western Union's money transfer service continues in 2001. What is new in the contemporary period are the innovations in electronic banking that are being spurred by developments in information technology (IT), i.e., software, and computerization, i.e., hardware. A major innovation in electronic banking at the beginning of the 1990s was the introduction of electronic data interchange (EDI). EDI lowers substantially the cost and time associated with the transfer of information between different functional elements within a banking organization, as well as between an organization and outside associates and customers. Data communication networks are essential to the success of the application of EDI technology. EDI technology provides a basis for more innovations in commercial banking in United States. Using computer chip technology, the Mondex cards are actually microcomputers with a memory that allows them to store and retrieve information on purchases. The smart cards also can store data such as frequent flyer points. Smart cards quickly became an integral part of t
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Approximate Word count = 3258
Approximate Pages = 13 (250 words per page)

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