Bumpy Start Marks Smart Card Trial in New York

By STEVEN E. BRIER
InfoWorld Electric (US)

SAN MATEO (10/08/97) - The long-awaited rollout of smart cards in New York got off to a rocky start Monday.

The cards, which can be used by consumers in place of cash to make everyday purchases, were to be accepted by 600 merchants on Manhattan's Upper West Side. But many merchants had not received the necessary equipment, and of those that had, not all of their staff members had received instructions in its use.

"We have the equipment, but we can't read cards yet," said P. Bichu, a manager at a Duane Reade drugstore on Broadway who is participating in the program.

"We think things are going well for only one day," said Ellen Stuart, a representative for Chase Manhattan Bank. "We will have the equipment in everywhere by the end of the week and have been conducting training for weeks," she added.

The cards are being distributed as part of a group effort by Chase, Citibank, MasterCard International Inc., and Visa International Inc. Chase and Citibank are to issue 25,000 cards each to customers and non-customers alike who reside in New York's Upper West Side neighborhood.

Chase will issue cards with MasterCard's Mondex cash product and Citibank will issue the Visa Cash card.

The cards, which store the value of cash on an embedded chip, are expected to join credit cards, debit cards, and ATM cards in users' wallets and, it is hoped, replace cash for small purchases.

When purchases are made, the card is swiped through a card reader and the purchase is deducted. The transaction is expected to be faster than a debit or credit card transaction since there is no need to connect to a central database for authorization or confirmation. With the appropriate software and hardware attached to a PC, the cards can be used for purchases over the Internet.

When the cash value runs low, it can be replenished at kiosks and ATMs.

The group effort is to ensure that enough businesses and consumers accept and use the cards to make them worthwhile, officials said.

Chase Manhattan, in New York, can be reached at http://www.chase.com/. Citibank Corp., in New York, can be reached at http://www.citibank.com/. MasterCard, in New York, can be reached at http://www.mastercard.com/. Visa, in New York, can be reached at http://www.visa.com/.