6Card Technology Today • May 2007

news

and cash among consumers and retailers alike.When asked about their views on cheques, only

around 6% of consumers said they preferred to pay by cheque, compared with 57% who preferred credit or debit cards. Significantly, cash was only the preferred payment method among 19% of respondents. Just over 17% of respondents had no particular view.

Over one sixth of consumers questioned claimed to make no use of cheques at all while consumers generally estimated they had reduced their use of cheques by one third over the past year with the greatest fall among women.

Twenty percent (20%) of respondents said they never bother to carry a cheque book. However women are more likely to carry a cheque book women are more likely to carry a cheque book than men (47% of women said they always carry a cheque book when they go shopping compared to only 19% of men). Cheques are most popular with people aged 50 and over.

Large retailers in particular (86%) are seeing cheque usage fall and, as a consequence, are either considering trialing non-acceptance of cheques or have already abandoned them. One of the reasons for this decline in popularity is the high costs associated with processing cheques. According to the study, in 2005/6, cheques cost UK retailers over £104 million in areas such as extra transaction times, extra queue costs, back office handling costs and fraud linked to cheques.

Looking to the future, 64% of retailers anticipate a further decline in cheque usage. Meanwhile the report indicates that debit and credit cards are considered to be the main future drivers of retail sales growth.

According to Visa: “Having invested in initiatives like chip and PIN, retailers are beginning to see just how important card payments are going to be for the future of their businesses. Likewise consumers are enjoying the convenience and security of being able to pay by card, both on the high street and on-line.”

It is likely that new innovations like contactless cards will only increase the popularity of cards and the displacement of cash and cheques as today’s payment methods.

m-commerce

Momentum builds around GSMA’s pay-buy mobile projectNokia, the world’s largest mobile phone maker, and a further 10 mobile operators have apparently thrown their weight behind a GSM Association initiative to enable the worldwide use of mobile phones for payments at retail outlets.

KPN, Maxis Communications, mobilkom austria, O2, Orange, SFR, SingTel, SKT, Vodafone and Wind have joined the 14 mobile Vodafone and Wind have joined the 14 mobile operators* that initiated the project in February this year. The handset vendors in the programme include Samsung Electronics and LG Electronics, include Samsung Electronics and LG Electronics,

which both plan to participate in the first trials scheduled to begin in October.

The GSMA’s ‘Pay-Buy Mobile’ initiative seeks to define a common global approach to using to define a common global approach to using Near Field Communications (NFC) technology to link mobile devices with payment and contactless systems. Together with a SIM/Universal Integrated Circuit Card (UICC) card in a mobile handset, NFC can be used to enable a wide range of secure, interoperable and transparent services, such as credit and debit payments.

According to Rob Conway, CEO of the GSMA: “After several fragmented initiatives, the mobile phone industry is now uniting around a single approach to enabling the mobile phone to be used, instead of cash or plastic credit card, at point of sale. The support of the world’s leading mobile operators and handset manufacturers should ensure that Pay-Buy Mobile is adopted worldwide, enabling vendors to achieve economies of scale and consumers to eventually use their mobile phones to pay for goods and services wherever they travel.”

The first phase of the GSMA initiative is set to begin with end-to-end trials in South Korea and other countries in both Asia and Europe later this year. The Korean trial will be led by KTF and will include all key participants in the value chain, from banks and credit card providers to retail organizations, handset vendors and UICC card manufacturers.

Mobile phone based transactions are already Mobile phone based transactions are already becoming commonplace in South Korea, where there are more than 12 million mobile payment enabled handsets in circulation, with 80,000 terminal payment machines in shops, restaurants and cafes.

According to the GSMA, the Pay-Buy Mobile initiative will build on the work of the major credit card companies, which have developed specifications to ensure global interoperability specifications to ensure global interoperability between chip cards and point of sale terminals, regardless of manufacturer, the financial institution and location of transaction. The GSMA says it intends to work closely with leading GSMA says it intends to work closely with leading financial intermediaries to provide the transaction solutions.

“Nokia is committed to the specification, implementation and introduction of NFC handsets supporting the standardized UICC-based NFC secure element,” said Dieter May, vice president and head of Nokia Emerging Business Unit.

* AT&T (formerly Cingular Wireless) China * AT&T (formerly Cingular Wireless) China Mobile; KALL; KTF; MCI; MTN; NTT DoCoMo; Mobile; KALL; KTF; MCI; MTN; NTT DoCoMo; Rogers Wireless; Smart Communications; Telenor, TeliaSonera; Telecom Italia; Turkcell, and Vimpelcom.

contactless

Oberthur Card Systems claims contactless lead in USA…With more than 13 million of its contactless cards in circulation in the US in 2006, Oberthur cards in circulation in the US in 2006, Oberthur

• Royal Bank of Scotland (RBS) has announced Royal Bank of Scotland (RBS) has announced Royal Bank of Scotlandthat it is to issue Xiring smart card readers to its online retail banking customers. RBS customers will soon begin receiving the Xi-Sign 4000 for APACS portable standalone EMV-enabled smart card readers which will enable them to access web banking accounts. As well as supplying the readers, Xiring will provide fulfilment services and distribution to RBS retail customers.

• STMicroelectronics and On Track Innovations (OTI) have announced that their secure contactless microcontroller solution has received full certification from MasterCard. The certification includes level 1, level 2 and CAST (Chip Assessment Security Testing) certification for use as a dual application card, supporting both MasterCard PayPass and Visa PayWave applications on a single chip. STMicroelectronics is supplying the contactless microcontroller and OTI is providing the operating system and application and the contactless card technology including the inlay technology. The combined OTI and ST solution is based on the ST19WR02, a silicon product specially designed for contactless payment applications.

• SCM Microsystems has reported its financial results for the first quarter 2007. Revenues from continuing operations in this quarter were US$8.5 million, up 14% from revenues of US$7.4 million in the first quarter of 2006. First quarter 2007 revenues included US$7.1 million from sales of smart card readers and other products for secure network and physical access, compared with sales of US$4.6 million in the first quarter of 2006. Strong sales of smart card readers have been attributed in part to the implementation by federal agencies of Homeland Security Presidential Directive-12 (HSPD-12). The company expects to achieve annual revenue growth of 15% to 20% in 2007 based on it’s current expectations for flat to slightly lower sales of smart card readers in the first half of 2007 and anticipated increases in sales of smart card readers in the second half of the year from the projected expansion of various government and enterprise security programs using smart cards.

• Raritan has announced the first smart card and common access card (CAC) reader solution for a KVM switch. The new Paragon II KVM Smart Card Reader solution is compliant with Smart Card Reader solution is compliant with Smart Card ReaderUS Homeland Security Presidential Directive (HSPD-12) standards and is said to provide an additional level of security for accessing and managing data centre equipment. Raritan’s solution integrates an SCM Microsystems smart card reader into a newly enhanced user station and provides anytime, non-blocked access to data centre servers and other IT equipment.

in brief