Smart Cards: The Convenience America Craves

America is the land of convenience. So stores stay open 'round the clock to satisfy our urges. Car maintenance, pharmacies-even wedding chapels in Las Vegas - are now drive-through. At a store in St. Louis, you can get your hair cut, your shoes shined, your oil changed and your car washed all in one place. America's appetite for all things convenient hasn't been ignored by the financial services industry. Credit cards, drive-through tellers and ATM machines are evidence of that. But a new way of transacting business that is efficient, cost effective and convenient is now being introduced. At the summer Olympics, the smart card will be tested on a large scale for the first time in the United States. Many Americans are already familiar with something called the stored-value card. A stored-value card is a credit card-like instrument on which monetary value is placed-you give $20 to the photocopy center, the salesperson gives you a card with $20 of value-and the value is depleted as you make copies. Colleges have begun using such a system to allow students to buy books, pay fees, purchase a meal, do laundry or get a snack at an on-campus vending machine. What separates the stored-value card from smart cards is that smart cards are embedded with a microchip that can recognize multiple uses. Microchip technology will enable holders not only to keep cash value on their smart cards for purchases, but also to charge a purchase to their credit card account, for example. With the smart card, you will be able to transfer value from your bank account to your home PC to the card. Conduct business over the Internet using your electronic cash options. Pay bills anytime, anywhere. Even your checkbook may become part of this card, allowing you to pay for things electronically and have the money deducted from your checking account. For those who conduct business abroad, the smart card will enable transactions to take place in other currencies. Want to exchange those dollars for German marks? Just plug the card into the PC and conduct the transaction online. Does this mean the end of cash, checks and credit cards as we know them? Probably not. But consumers will decide if they like the new technology, beginning with the Olympics.