A local entrepreneur has joined the ranks of those who are trying to make smartcards work, offering an electronic wallet as a key application.
Ted Woodley, of Wellington-based B&I Group, says he has one New Zealand institution already signed up to adopt the system. Another large potential customer is ready to sign up in a week or two, he says, though he wouldn’t name them.
“It’s up to them to publicise it when they’re ready.”
The Unipoints system was transferred directly from the UK-based smartcard specialist GIS.
An electronic wallet provides a user with digital “cash” stored on a secure microchip-equipped “smartcard”, which can be transferred into a merchant’s account through a terminal without necessary reference to a bank as with debit and credit-card transactions. Multiple applications such as loyalty schemes and secure physical access and identity cards will be packaged on the card under the Multos operating system.
The reason electronic wallets did not succeed in previous trials here and overseas, Woodley says, was because the application was the only one on the card and because “the banks controlled it”. Banks, he suggests, have little incentive to make such a scheme work, because they collect a large amount in transaction fees from Eftpos. The e-wallet makes the complex Eftpos setup, with its constant online checking with the bank, unnecessary.
B&I has taken the system to several banks, he says, and they don’t want to know. He envisages the institutional users of the system — which may be retail chains, educational campuses or clubs — effectively acting as their own banks.
The monetary value is stored on cards belonging to customers and merchants and exchanged through a point-of-sale terminal. A third kind of card, known as a “collector card” or “float card”, is used to take the value from merchant terminals and transfer it to a secure “value vault”.
The process keeps a full audit trail, with the location, card number and value of each transaction recorded. This brings such an operation within the security and traceability requirements of the Reserve Bank Act, Woodley says.