Cards - Moving ahead in style
Convenience Shopping - Card issuers have something
more to offer their consumers : chip-based cards, also called smart
smart cards really different ?
Credit cards were introduced into the market in the 1980s, and
were followed by debit cards a couple of years later. The latest
offering is slightly more advanced - a chip-based card. It is not
only a means of making payment and a kind of electronic-purse (e-purse),
but also carries out other nonpayment functions, such as storing
your driving license, office-ID, and a host of other information.
In short, it acts as an entire personal database .
Do such cards have a future in India ?
Though it has not been around for long, the smart card is beginning
to make its mark. Companies like BPCL (Bharat Petroleum Corporation
Limited) have launched the smart petro-card, BEST has introduced
a similar card service. States like Karnataka and Gujarat have introduced
How is it different from other cards ?
A smart card is activated through a pin code installed on a chip.
The facility gives the smart card an advantage over other plastic
cards since it makes the card more secure. It also reduces the risk
of default, thanks to the digital signature capabilities. As a smart
card also operates off-line, the customer can read the balance amount
on the card even in the case of a failure of the telecom network.
When and how did smart cards come into existence ?
First launched in Europe about twenty years ago, smarts cards have
found wide acceptance in the telephone industry. In India, IDBI
Bank launched the smart car , initially, at its Renukoot branch
in Uttar Pradesh, where it was a success . Driven by the success
of this pilot project, it launched its card - Money Smart -
in Mumbai recently. At present, a network of about 1000 merchant
establishments accept the card .
How are banks reacting to the presence of smart cards in
the market ?
Banks like IDBI, HDFC, and Dena Bank are very enthusiastic about
using smart cards. Few technology-savvy public sector banks are
planning to get into card issuance in a big way . But not all are
equally enthusiastic. Many foreign banks are preferring to wait
and watch, while new domestic players are cautious