Renting space on multi-app smart cards

Card issuers could soon be renting space on their smart cards to third party application providers, while consumers download or subscribe to the services dynamically.

Card issuers could soon be renting space on their smart cards to third party application providers, while consumers download or subscribe to the services dynamically.

These are some of the developments that lie ahead with the emergence of multi-application smart cards.

Speaking at Cards Asia 2002, which was held in Singapore last week, Alan Johnson, technical director of the Multos Consortium, said the move towards multi-application smart card has been made possible with the decoupling of hardware from the operating system, and applications from the suppliers.

In this scenario, the application providers may not be the card issuer, unlike today where banks issue the payment cards, mobile networks issue the subscriber identity cards, the transport operators have their electronic tickets and companies, their corporate identity cards.

According to Johnson, the separation of roles enables application providers to focus on the requirements of the application rather than on the specific technology to be delivered to the hands of the end users. For example, he said, the service provider may not have to provide a card management system, which could be handled by the issuer.

However, for multi-application smart cards to take off, it is important that the card issuer gives the application provider a lower cost of entry and allow them to "rent space" on the card, said Johnson.

He gave the example of Hong Kong, where the government is issuing a biometrics-based identity card for identification and immigration purposes, with plans in the pipeline to rent space to other application providers.

According to David Chan, head of Chip Products at Visa Asia Pacific, the concept of renting out space on multi-application cards is not entirely new. "One of the merits of multi-application cards is that they allow any number of applications to be stored, limited only by memory space and control."

According to Chan, there are already Visa members in Asia Pacific, Europe and the United States issuing smart cards with multi-applications that belong to more than one party.

"The payment function is owned by Visa or the card issuing bank, and the non-payment functions are owned by merchants."

He gave the example of SK Telecom's Moneta Visa card in Korea.

The payment function on the SK Telecom Moneta card is owned by Visa and five card issuing banks, the stored value function is owned by Visa Cash or the banks, and the loyalty function is owned by SK Telecom. The loyalty functions support post-issuance activation, that is, they can be switched on whenever they are needed. "This card will be in the marketplace for the next two to three years. During this period, issuing banks and their partners will be able to expand to retail or Internet merchants, effectively 'renting out space'. This allows new applications to be added or downloaded via mobile networks."

Looking ahead, Chan said the next phase that the industry would be considering is to allow consumers to download or subscribe to applications dynamically. "This means that card issuers will be able to offer cardholders a variety of services that consumers can personalize for their needs."

Johnson believes that consumer convenience applications will drive the deployment of multi-application smart cards. He gave the example of leisure applications such as a golf handicap card with a credit and debit facility. "The branding is golf, not bank," he said.

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