Don’t Leave Home Without Your ‘Smarts,’ Group Hopes

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From Associated Press

Merchants are attracted to “smart cards” as a way to gather information about their customers, according to a survey released Monday by a group promoting the plastic cash cards that are embedded with a computer chip.

Results were released at the opening of the two-day convention of the group the Smart Card Forum, which is also trying to convince the public that smart cards are protected and the information they contain is confidential.

A customer can use a smart card like a debit or automated teller card to pay for anything from gas to groceries. Because the card has a computer chip, it can keep track of what a consumer buys and when and how much he or she spends.


Polls done by the Harris organization and the forum have shown that consumers are receptive to using smart cards but are concerned about the personal data stored on them.

Merchants surveyed by the Smart Card Forum said the cards made transactions quicker and cheaper for them. They also said the cards made it easy to gather information on customers for use in marketing and promotional programs and for loyalty programs such as frequent-flier miles.

Most merchants surveyed said they believe consumers spend more when they pay with a credit or debit card than when they pay with cash. The study found other benefits to merchants, such as theft prevention. The study also indicates that the cards need not be used that much to make a difference for merchants.

“Grocery stores, convenience stores, movie theaters and gasoline retailers indicated that a mere 2% to 10%--an extremely low threshold of consumer demand--is required for them to realize the benefits of smart cards,” the group said.

A number of banks and merchants around the country are offering the cards on a trial basis.

The Smart Card Forum interviewed 65 major merchants in 11 categories, including groceries, gas sellers, convenience stores, drugstores, restaurants and theaters. The forum was established in 1993 and has more than 225 corporate and government members.