‘Smart Card’ Scene Different in Europe

One of the things that made “smart cards” popular in Europe was the fact that before smart card readers were widely available at most retailers, they were everywhere else [“E-Commerce May Help Americans Learn to Love Smart Cards,” Oct. 11]. Every possible vending machine had them, pay phones had them, virtually any pay-as-you-go utility device had them.

Europeans were sold on convenience, and this was aided, as mentioned in the article, by standardization. Smart cards enabled another type of convenience that had been unknown in Europe until the emergence of such cards: the ability to easily go from one country to another without having to convert large amounts of cash.

This phenomenon has been partly responsible for a turn-around in European economies, making cross-border commerce and consumption much easier. It gives a hint to the euro’s potential.

In the U.S., we have a unified currency, so that type of convenience isn’t a factor. Unfortunately, the lack of standardization has not only hindered widespread adoption by retailers, it has also limited implementation in the most obvious areas, such as vending machines, coin-operated washers and dryers, pay phones and parking meters.

There is also a problem of perception. The first smart cards in the United States were check-cashing cards. Consumers had problems with these cards because even though they were convenient, there was no automatic entry in their checkbook. Even if the consumer remembered to make an entry in their check register, they had nothing with which to match the entry at the end of the month. It made reconciling a bit of a nightmare.

Cards that can be easily refilled at ATMs usually tap into the consumer’s cash account, the checking account, and this presents the same dilemma.

Finally, there is a problem of safety and security. Those issuing smart cards have been slow to adopt protection policies that offer the same protection for smart cards as offered on credit cards if lost or stolen.

There is also a problem for many with the idea of having too much personal information on a card. A consumer might like the convenience of being able to use such a card in a parking meter but might not like the idea of some central computer not only knowing they parked, but knowing the exact location and being able to identify them. The same people who have no objection to video cameras in public places resent the idea of a central repository of information that logs their every activity.

The fact there are now card readers available that allow users to insert a card in their PC’s floppy drive, yet it hasn’t caught on, is an indication of consumer resistance and the problems faced even in the area of online e-commerce.

MICHAEL SOLOMON

West Los Angeles