IP: [FP] Smart Cards -- Public Acceptance?

From: "ScanThisNews" <mcdonalds@airnet.net> Subject: IP: [FP] Smart Cards -- Public Acceptance? Date: Wed, 9 Sep 1998 22:07:48 -0500 To: ignition-point@majordomo.pobox.com ====================================================================== SCAN THIS NEWS 9/9/98 ======================================================================= New Poll: 76% Indicate Interest in Smart Cards SAN FRANCISCO--(BUSINESS WIRE)--Sept. 9, 1998-- Smart Card Forum research study seeks keys to market success, ways to bridge the gap between early adopters and the mainstream consumer market The Smart Card Forum (SCF), a multi-industry organization working to accelerate the widespread acceptance of smart card technology, today announced some initial top-line poll results of a qualitative and quantitative research study it has commissioned. A detailed analysis of the comprehensive study will be finalized in tandem with the Forum's Work Group meetings this November in Florida. The Forum is attempting to better understand what North American consumers would like in a smart card that they could carry around with them that stores information or value (or both) from various applications (e.g., health care, insurance, banking, loyalty programs). These applications are just some of what a smart card can do (the technology has many more applications), but a study of how consumers perceive them will help the industry better understand the potential size and shape of the future market for smart card technology. "The smart card is a very exciting and powerful emerging technology," says Forum President William J. Barr. "To extend its promise into the mainstream commercial marketplace means understanding and then delivering what consumers want. After all, it's a basic marketing premise that you have to understand the public's needs before you can deliver a solution that will win their support and loyalty. Previous Forum market research has shown consumer interest in our industry; this next wave of research is designed to provide us with more specific information that we can apply to the task of introducing smart cards to the broadest possible consumer audience." FIND/SVP, a nationally known New York-based research and consulting firm, was asked by the Forum to design the research study to capture consumer perceptions of smart cards and the keys to their acceptance and use. To do this, they designed a qualitative (14 focus groups) and quantitative (telephone survey of 2,400) research study(a) conducted in the United States and Canada. It was tightly focused to determine certain attributes of smart cards, which applications would be supported and why, plus servicing, branding, and pricing issues. For the purposes of the research, a very specific "smart card concept" was developed and tested. It was described as a "card-sized unit with a memory that can hold just about any kind of information but requires some sort of reader to input or output data." Among the research findings: - three quarters of those polled (76%) said they were "extremely," "very" or "somewhat" interested in the smart card concept; about one-third (31%) were "very" or "extremely" interested - of the 31% "very" or "extremely" interested, the majority said that they would "definitely want" smart cards for applications such as med-alert information (74%); health insurance ID (62%); ATM and related bank access (59%); drivers licenses (56%); and credit cards (53%) - the most interested group were, in general, willing to pay up to $50 to obtain a smart card, and a $25 annual fee to maintain the card - that same group carried far more cards in their wallets than those not interested (6.3 cards vs. 3.9 cards) - those most interested fit the profile of early technology adopters: younger, higher income, own a PC, etc. - convenience and security were seen as key motivating factors for adoption "These initial results reveal a number of interesting things we didn't know before," says Barr. "First, smart cards -- as they were conservatively described in the research -- have a potential core early-adopter constituency to start with of about a third of the population. Second, some of the applications a smart card can enable are easily understood and appreciated by that segment of the population. That's good news for the industry, because it is the use of smart cards for each of these individual things that will collectively increase the momentum towards multiple-application smart card interoperability and ubiquity." Interest in smart cards. All focus group respondents expressed interest in the "smart card concept." It should be noted that these groups were pre-screened to eliminate "technophobes," and participants developed concepts themselves, so higher levels of enthusiasm for smart card technology were to be expected. However, approximately three-quarters of those polled in the telephone survey said they were either "somewhat," "very" or "extremely" interested in the smart card concept. About a quarter were not interested. Who are most interested in the idea of smart cards? The research discovered that those interested in smart cards - compared to those "not interested" in the concept -- are: - much more likely to have PCs, cell phones, or other high-tech devices (98% vs. 68%) - much more likely to look forward to new technology (44% vs. 18%) - younger (38 vs. 48 years old) - have higher incomes ($54,000 vs. $45,000) - already carrying more cards than those not interested (6.3 vs. 3.9) "Those numbers tell us that as an industry, we must extend our efforts beyond the classic early adopter community and connect with the majority of consumers who need to be educated about the many benefits to them of smart card technology," says Barr. "Our ability to bridge that gap will determine the future success of our industry." One card to replace many. As designed by the focus groups, "Such a (smart) card would replace most of what they now carried in their pockets and do other things as well. It would not be used in addition to the cards in the wallets, but instead of those cards." Of those interested in having a smart card (N=741): *T Would want only one smart card 35% Would want two smart cards 30 Would want three smart cards 27 Would want four or more cards 6 *T One card that does many things. Within the qualitative phase, people were able to easily generate potential uses for a smart card. More than 100 plausible application ideas were generated, both for personal and for business use. These included: replacing money and credit cards, replacing many of the cards in one's wallet, storing records, and managing daily events. Of those interested the smart cards, respondents said that they would "definitely want" them for: Med-Alert information 74%, Health insurance ID 62, ATM and related bank access 59, Drivers license 56, Credit cards 53, Prescription card 51, Car information 50, Money for small purchases 48, Medical records 44, "Other" ID 39, Discount shopping cards 39, Money for larger purchases 36, Frequent flyer information 34, "Other" membership cards 26. According to Barr, "we are pleased by these findings on applications, because that's what smart cards are supposed to be all about. Smart cards are supposed to perform lots of diverse functions, and we're pleased that those surveyed could identify so many of them. Multi-application interoperability is both the objective of the Smart Card Forum and the key to unlocking the business potential of our industry." The ideal way to distribute and control smart cards. A consensus emerged among those most interested in the concept about how one would/should get and maintain a smart card: - consumers would obtain a "starter" smart card from one of many sources, either free or for a small fee - they would "build" onto it by adding identification and licenses, personal data, and credit data (among others), either free or for a small fee - users would pay an independent service an annual fee to help maintain and protect the card - individual smart card-holders would allow different organizations different levels of access to the card Respondents disliked the idea of a single authority having access to all their smart card key data. They accepted that in the absence of such an authority, problems with maintaining the card, replacing it, canceling it, etc. would become overwhelming. Accordingly, their plausible solution was "distributed," allowing for widespread sale of smart cards at a very low price, with the cards supported by an individual choice of one of many independent "bonding agencies" paid monthly or annual fees for their services. It was thought that data might also be backed up by this agency (in encrypted form), or saved by the card's owner who would have two versions of his/her card made. Mild preference for adding data oneself 61%, Mild preference for having one company to call for problems 59%, Mild preference for many suppliers 58%. Pricing. In general, the research discovered that of those most interested in the smart card concept, respondents were willing to pay up to $50 to obtain a card, and approximately a $25 annual fee to maintain the card. Potential smart card users rarely envisioned a single-use card that would be used in addition to the cards in their wallets. Rather, they were interested in a card that would put multiple uses on a single device. The key reasons for embracing the card thus focused heavily on convenience: fewer things in one's wallet, fewer things to remember to carry. Another initial motivator might be security. A smart card can be made significantly more secure than a normal magnetic stripe card, and when introduced to that information, survey participants indicated that smart cards might, by "electronically storing receipts in some way," provide additional reassurance. The use of electronic fingerprinting (biometrics) as proof of identity was also seen as a way to protect the security of information stored on smart cards. "Security" was also interpreted as meaning medical safety and physical well being. Accordingly, a smart card with emergency information accessible by physicians and paramedics was also considered desirable. Other ways to encourage initial smart card use focused on having a smart card doing certain things better than its "dumb" predecessor (e.g. a "faster" or "less expensive" card). Using the card as an electronic key, to which other applications might be added later, was also seen as a possible benefit. The bottom-line. "Using a very precise and narrow definition of a smart card, we have discovered useful new information that we can apply as the full spectrum of smart card applications emerges into the mainstream commercial environment," says Barr. "This is just the beginning of our industry's efforts to learn about how we can connect with and educate consumers whose interest in smart card technology increases in relation to the information they have about it." The Smart Card Forum (www.smartcardforum.org) is a non-profit, multi- industry organization of 200 members working to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors. NOTES: - The "qualitative" aspect of this study comprised a set of 14 focus groups that were conducted in four US cities (New York City, NY; Chicago, IL; San Francisco, CA; and Jacksonville, FL), and two Canadian cities (Guelph and Toronto, ON). - The "quantitative" aspect comprised a much larger and more "projectable" sample of 2,400 American and English-speaking Canadian citizens aged 18 and over who completed a structured telephone interview. Respondents were capable of using a smart card (e.g., had some other form of "plastic" card or checking accounts) but otherwise were randomly selected. CONTACT: Megan McDonnell Environics Communications 1 (203) 325-8772, #14 mmcdonnell@environics-usa.com or Karen Silberman Smart Card Forum 1 (703) 610-9023 help@smartcardforum.org ======================================================================= [forwarded from F.D. Bowden] ======================================================================= Reply to: <fingerprint@networkusa.org> ======================================================================= To subscribe to the free Scan This News newsletter, send a message to <majordomo@efga.org> and type "subscribe scan" in the BODY. Or, to be removed type "unsubscribe scan" in the message BODY. For additional instructions see www.efga.org/about/maillist.html ----------------------------------------------------------------------- "Scan This News" is Sponsored by S.C.A.N. Host of the "FIGHT THE FINGERPRINT!" web page: www.networkusa.org/fingerprint.shtml ======================================================================= ********************************************** To subscribe or unsubscribe, email: majordomo@majordomo.pobox.com with the message: (un)subscribe ignition-point email@address ********************************************** www.telepath.com/believer **********************************************