Big sales make 99¢ smartcard possible

All done with the ancient magic of Multos

Sales volumes, as much as improvements in technology, have made the multi-application US99¢ smartcard possible, says Sydney-based MasterCard director Lyndal Cardy.

MasterCard has just succeeded in producing the US99¢ card as part of its OneSmart programme. It has done so with the assistance of a clutch of companies, including Keycorp and New Zealand's Security Plastics. Visa claims to have already hit the US99¢ production-price mark.

MasterCard first introduced the multi-application smartcard in December 2000, under its US$2.99 chip program. In December 2003, the company succeeded in reducing the price of the card by 33%, to US$1.99. Now this price has been halved again.

There are now 31 million chip-based smartcards deployed in the Pacific region, says Cardy. Banks and merchants are working their way towards the January 2006 deadline for compliance with the EMV smartcard standard. This was jointly developed by Eurocard, Visa and MasterCard. Smartcards are more secure than magnetic-stripe card, which are vulnerable to copying (skimming) and other fraud techniques. After the 2006 deadline, merchants will have to bear the cost of fraudulent transactions unless the transcation was made using an EMV card.

The US99¢ card uses the Multos operating system. It comes pre-loaded with a number of applications, including debit, credit, stored-value (the electronic cash wallet), and telephone and transport payment options. Naturally, not all of the applications need to be activated, but they are instantly available if needed — older cards need to have them loaded through a terminal.

Cardy predicts that the customer appeal of only having to carry one card will lead to a migration of previously separate applications onto the unified smartcard.

Multos is an old operating system and because of this has met with a mixed reaction from the banks. However, it is widely used and carries the highest security classification. Other card operating systems may be more sophisticated but they are also more proprietary, says Cardy. “As with PCs, it’s best to work with the operating system everyone uses.”

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