|
Reproduced
for ViVOtech by The Nilson Report, Oxnard, California, Number 780,
January 2003. www.nilsonreport.com:
U.S.
Smart Card Break Through
Mass
issuance of microprocessor-type chip cards of the contact variety
faces an insurmountable obstacle in the short run - the minimum
$5 billion cost to replace or upgrade the installed base of 11 million
stand-alone POS terminals, as well as to revamp the other front-end
services and back-end processing systems that currently support
magnetic-stripe card readers. However, new technology now available
could trigger mass issuance of contactless smart cards - those that
use a built-in radio antenna to transmit data to a receiver in close
proximity, but don't make direct contact with a chip reader.
ViVOtech
has manufactured a radio-frequency-based reader/writer device that
attaches to a stand-alone POS terminal or integrated electronic
cash register. The $100 peripheral receives data from a transponderlaminated
in a contactless card - everything contained in Track 1 and Track
2 of a magnetic stripe, as well as additional security information.
The peripheral connects to a permanent insert in a POS terminal's
mag-stripe reader slot, leaving enough space for swiping a conventional
mag-stripe card. This allows contactless transactions to be processed
just as if they were initiated by a mag-stripe card. Setting up
a ViVOtech device takes less than five minutes, and merchant acquirers
don't need to make any adjustments in their back-end processing
systems in order to begin accepting proximity payments.
ViVOtech's
radio-frequency device is being tested in Orlando, Florida as part
of MasterCard's Paypass proximity-payments project which involves
contactless smart cards issued by Citibank, MBNA, and Chase. MasterCard's
contract is not exclusive, and ViVOtech is already working with
other card companies in Europe and Asia.
The
company incorporated in May 2001 and received $5.5 million in venture
capital in August 2002 - 91% from Alloy Ventures, which is based
in Silicon Valley. ViVOtech can also provide a receiver device for
infrared proximity payments generated by mobile phones or other
handheld devices. Like the contactless smart-card device, it piggybacks
on the existing mag-stripe payment card infrastructure.
Click
here to view the original Nilson Report Article...
|
