Smart and Smarter - Industry Trend or Event

Industry Standard, The, Feb, 2001 by Deborah Branscum

Under these circumstances, what would lure consumers to these new cards? Enter the coolness factor. "That's part of why we didn't do it as just a chip card," says Bill Buchanan, VP of new accounts at San Francisco's Providian Bank. "We added -- as silly as it may sound -- the cool feature of see-through plastic. And we tied it in with other benefits and other marketing that give people a reason besides the chip to get the card." It just may work, says Robertson. "I would bet that I could get your business by giving you something shiny and new that your neighbor doesn't have," he says. "By the time you think about Internet security, you owe them $2,000 and you're a partner."

First USA's card doesn't rely on transparent plastic, as compelling as some might find it. The Wilmington, Delaware-based bank claims it is offering a "real" smart card, with software that makes its product truly useful. That software, called SmartView, has an electronic wallet that keeps track of credit card account information, and it maintains a list of favorite Web sites with user IDs and passwords. Like Blue, SmartView won't allow the information to be accessed unless the smart card is in its reader. The bank is even giving First USA customers 5 percent cash-back offers when they purchase from Amazon.com and Outpost.com, among other online merchants.

For its part, First USA is not pushing the online security angle all that hard. "I'm not sure the life and breath of the chip is going to reside around security," says First USA marketing chief Warren.

Smart-card boosters hope the success of Blue and the rollout of competing products are signs that their fellow citizens are coming to their senses, ready to embrace a technology long accepted by the rest of the world. No such luck. Consumers love Blue for its beauty and its interest rate, not its brains. And a good thing, too. That gives card issuers at least a couple of years before the novelty wears off and smart cards are forced to deliver on their promise.

Deborah Branscum (branscum@aol.com) is a contributing editor for Newsweek.