Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 21, 1995 TAG: 9503210145
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
First Union Corp. on Monday introduced a "smart" card that acts as an electronic wallet, but the Roanoke Valley probably won't see it until the turn of the century.
The so-called stored-value card will debut in Atlanta, where the banking company hopes to enroll 5,000 merchants and about a million customers in time for the Olympic games there in the summer of 1996.
The program will be unrolled in Washington, D.C.; Richmond; and several Florida cities in 1997 and in Nashville and some cities in the Carolinas in 1998. After that, bank officials said in a telephone press conference Monday, there is no timetable.
Smart cards look like credit cards but have microchips embedded in the plastic. Bank officials said they expect the cards to replace currency and coins for purchases, including those made at vending machines and newspaper boxes, and for fast food, buses and cabs.
The cards will come in two types.
One is a disposable card that can be obtained by depositing money in an automated teller machine. They come in amounts of $25, $50 and $100, and the money is spent down as the holder makes purchases. When the money runs out, the cards are thrown away - unless a market develops, as it has in Europe, for decorated cards.
The second, which will be used by bank customers, will be combined with an ATM card and a debit card. This type of card can be recharged from bank accounts as the value runs down or from a home-based screen phone to be marketed for the Atlanta effort. A parent could, for instance, use the phone to give a child enough money for school expenses the next day.
In either case, the money is lost if the card is misplaced, just like cash. No personal identification number will be required for using it.
Fred Winkler, senior vice president and head of card products for First Union, said the company believes there is a market for the cards because of the 275 billion financial transactions a day in the United States, 73 percent are in cash, three-quarters of them for less than $10.
He said this is the largest "open" use of smart cards in the nation. The stored-value cards have so far been used in pilot programs in controlled situations, such as a university campus or a mass transit system. The new program is supported by Visa and will use only Visa cards.
When the customer makes a purchase with a smart card, the salesperson keys the amount of purchase into a terminal.
The customer first approves the purchase amount displayed on the terminal, then inserts the card into the terminal. The terminal displays the balance amount on the card, deducts the purchase amount and, then, displays the remaining balance on the card.
by CNB