Reuters New Media [ Yahoo | Write Us | Search | Info ] [ Index | News | World | Biz | Tech | Politic | Sport | Scoreboard | Entertain | Health ] [ Reuters | Wired | ZDNet ] _________________________________________________________________ Previous Story: IBM Seeks To Fill Gap In Internet Commerce Next Story: Intel Sells Entire VLSI Stake _________________________________________________________________ Monday October 6 10:08 AM EDT Two N.Y. Banks Launch 'Smart Card' Test By Cal Mankowski NEW YORK - New York's two biggest banks and the Visa and MasterCard groups begin a test Monday to find out how readily consumers and merchants will switch from cash and coins for smaller purchases to a wallet-sized plastic card. The smart cards, billed as a quick, convenient alternative to cash for making everyday purchases, are being distributed to customers of Chase Manhattan Corp. and Citicorp. Chase Manhattan is the largest U.S. bank based on assets and Citicorp is ranked second. Citicorp's Citibank retail bank will issue Visa Cash cards to its customers. Chase Manhattan will issue its customers the Mondex electronic cash product which will appear under the MasterCard banner. Backers have said a key aim of the test is to demonstrate that the different technologies of the Visa Cash and Mondex cards are inter-operable" when it comes down to everyday usage. As one participant put it, the aim will be to show that two systems can be used over one terminal. Participants will also be hoping the smart cards will prove more popular than they did during a much-ballyhood test in Atlanta during the 1996 Summer Olympics. I would have to say it was not as positive as we thought it might be," said one of the people involved in the Atlanta test. The person, who requested anonymity, said there was a "Catch 22" problem in the test -- with merchants declining to be involved because not enough consumers had the cards, and consumers complaining that there were not enough places to use them. Although the cards can still be used in the area, about the only place they are seen nowadays is the Atlanta area transit system. Another person familiar with the Atlanta test said that merchants surveyed after the Olympics said they liked it, citing among other things the added security that comes from not having a lot of cash around. The New York test has signed up about 675 merchant locations, a spokeswoman said Friday. The number represents an increase of about 35 percent from mid-September. The area targeted for the cards is west of Central Park between West 60th and West 96th Streets, encompassing an area known as the Upper West Side. A news release in September said Citibank and Chase would each distribute 25,000 of the smart cards to customers. Residents of the area who were not customers of either bank could get a stand-alone smart card from either bank. The smart cards work like a regular Automated Teller Machine card but contain a computer chip that lets customers load" value into the card at an ATM or at a special kiosk. As the cards are used at participating merchants, the purchase is deducted from the card's stored value. For merchants, the sponsors of the test say, the benefit is faster, more efficient transactions because the need to make change or handle checks is eliminated when the cards are used. Smart cards have also been tested successfully in closed" environments, such as athletics stadiums or at the Army's Fort Leonard Wood in Missouri, and participants have said the results have been good. The development of the smart card even gets people talking about carrying on commerce without any cash at all, although some believe that is a long way in the future. I just turned 50 and I have trouble envisioning that in my lifetime cash will go away," David Slackman, executive vice president of consumer banking at Atlantic Bank of New York, said in a recent interview. But, he admitted, the volume of cash will probably go down as other payment methods win popularity. Some proponents say the card industry is moving toward a "multi-application" card that includes a stored value feature, a debit or check" card component, and the traditional credit card. One issue that proponents of smart cards generally shy away from is the preference of some merchants to deal in an all-cash environment because of the opportunity to under-report income to tax authorities. Copyright, Reuters Ltd. All rights reserved _________________________________________________________________ ________________________ Search News Help _________________________________________________________________ Previous Story: IBM Seeks To Fill Gap In Internet Commerce Next Story: Intel Sells Entire VLSI Stake _________________________________________________________________ [ Index | News | World | Biz | Tech | Politic | Sport | Scoreboard | Entertain | Health ] _________________________________________________________________ Reuters Limited Questions or Comments