Motorola To Wave In Smartcard It’s Intended To Replace All Those Credit Cards
Doctors have warned that wallets are getting so full of credit cards that they literally can become a pain in the behind. Now Motorola Inc. says it has a cure for the malady.
The Schaumburg, Ill.-based electronics giant will introduce later this year a single “smartcard” intended to replace the dozens of plastic cards people now typically carry.
The card, packed with microchips, will use radio technology to effect a transaction in a millisecond without actually touching the equipment that reads it.
At a time when its leadership in the wireless phone business is under attack from a bevy of aggressive competitors, Motorola has decided that smartcards will be the next century’s superhot wireless technology and intends to become the industry leader.
Christopher Galvin, Motorola chief executive, will hold a press briefing Thursday outlining his firm’s plans to dramatically expand its smartcard role.
The firm is a pioneer in developing microchips for smartcards, which are now used mostly in Europe, but it hasn’t previously supplied smartcard systems complete with software.
A new Motorola business unit, the Smartcard Systems Business, will be based in Schaumburg and headed by Mark Davies, who said Motorola executives have spent 18 months planning how to advance smartcard technology worldwide.
European banks have found smartcards profitable for peculiarly local reasons, such as laws forbidding profits on checking accounts, and the complexities of switching currencies from one country to another. For North Americans to embrace smartcards will require a considerable investment in more expensive cards and new card-reading equipment.
Davies said American banks have become eager to promote the new technology because of its proven record in Europe of drastically reducing credit card fraud.
Initially, people who use smartcards can wave them close to a machine that sends a radio signal to get information about who owns the card, where they bank and so on. The cardholder will also punch in his own personal identification number to verify his identity.
Eventually, cardholders will press their thumbs on a screen to verify identity, or provide some other biologically based identification, Davies said.
“For some applications, you will have to identify yourself as the rightful cardholder,” he said, “but for other applications, that won’t be necessary. The same card may be used to pay for parking, highway tolls and telephone calls, for instance, without requiring identification.”
For small purchases such as snacks from vending machines and subway fare, the smartcards can be “loaded” with electronic funds at a bank or by an automatic teller machine that transfers the cardholder’s funds from one account to another.
A card loaded with $30 could be waved in front of pop machines or toll booths that would subtract sums of 75 cents or so per transaction without identification.
If such a card were lost or stolen, it could be used by anyone, but only for the sum left unspent in the microchip’s memory. The card couldn’t be used to make major purchases or to obtain cash from a bank machine unless the card user could provide proof of ownership.