American Express Buys Smart Card Technology from Belgian Firm

BRUSSELS/NEW YORK — American Express has bought a global license to

use a Belgian company's chip technology in the smart card systems it has under

development through a series of pilot programs.

Specifically it has put Banksys' proton technology to work as an “electronic

purse” in a year long-test with about 2,000 marines in Jacksonville, NC.

The Belgian chip, Banksys commercial director Armand Linkens explained, “puts

much more functionality on the chip card.” Proton's advantage lies in payment

applications for small sums.

“You load cash in small denominations on the chip card and use the card to pay

for small items like hamburgers. It is much faster than cash. It gives you exact

change all the time. It is cleaner than cash. Cash can be quite dirty.”

The chip card also offers merchants greater security, Linkens said, because they

need to keep less and perhaps no cash in their drawers, thus protecting them

from theft or holdups.

Special terminals deduct purchases from the card, making customer movement

out of the store much faster as well, Linkens said.

The AmEx test allows marines to activate the e-purse and “load personal funds

from their Marine Federal Credit Union account,” Amex spokesperson Molly

Faust said.

“They can then use the smart card to make purchases at popular locations on

base, including the Officer's Club, bowling alley, barber shop and vending

machines and can reload funds as needed into the e-purse.”

The test began late last year and is scheduled to run for a year. It is one of several

American Express is running to find the mix of technologies that will make the

chip card more useful to card holders.

Other pilot tests with Continental and American Airlines are using smart cards for

faster airport check-in and access to VIP lounges. It also allows quicker check in

and check out at eight Hilton hotels participating in the test.

Europeans, Linkens argued, may be ahead of the US in application of smart card

technology which is already more widely used than in the US. In fact, however,

applications are most widespread in the Benelux countries.

The Netherlands, for example, has a wide array of bill-paying applications that

can be handled with smart cards. Introduction of the Euro at the end of next year,

experts predict, is likely to increase smart card use.

The Euro and national currencies will co-exist for three years, a period likely to

bring a fair amount of confusion to the payment of small bills to local merchants.

The question is, these experts said, is how quickly the necessary scanning

machinery can be installed in local shops. They also noted, however, that more

extensive US testing is likely to come up with a better performing product.

And they pointed to the French minitel as an example. The small computer

installed in millions of French homes as an advanced telephone book has been

overtaken by more modern technology and helped put France at a disadvantage

in the high tech race.

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