Your Future in your Pocket

It’s been a long wait for both manufacturers as well as end-users of

smartcards in India. Ater the heady rush of the early-nineties, when smartcard

payments suddenly took off in a big way, there's been a slump that refuses to go

away, and in its wake, interest in those little strips of plastic has waned

dramatically. Dismayed by the slow commercial adoption, smartcard manufacturers

are stepping up efforts to deliver development tools and improved ease-of-use

features to soothe user skepticism and help convince smartcard manufacturers to

lower prices.

Let’s GO PLASTIC: Card usage is growing 45% annually in India

Smartcards have seen significant acceptance in Europe and the US, but the

Indian market for such systems has been languishing compared to its overseas

neighbors. While India lagged behind the rest of the world in smartcard

adoption, the gaping need for online security and the development of

multiple-use cards is finally stacking the deck in favor of smartcards.

Currently, Gemplus, iSmart and Schlumberger Sema lead the smartcard solutions

market in India.

The Indian smartcard industry is growing at 45% per annum. India’s

smartcard business potential is expected to reach 8 million users by 2003.

According to Frost and Sullivan, the Indian smartcard market could swell to 3

million by 2005.

Currently, government, public and private sectors units, as also some

colleges, have rolled out smartcards. The road transport organizations in

Gujarat, Rajasthan and Chandigarh have started issuing driving licenses,

registration certificates and permits on smart cards. Metro Railway, Kolkata is

planning to issue smart season tickets instead of magnetic strip cards.

Brihanmumbai Electric Supply and Transport (Best), which offers smartcards for

automative fare collection, will also introduce contact less cards for ticketing

across its entire network. The Delhi Traffic Police is planning to introduce a

smartcard driving license soon.

The Kerala government has recently used the ‘smart’ ration card.

Government employees and laborers in Goa will also be equipped with smartcards

soon. Among public and private sector units, BPCL and Indian Oil issue petro-cards,

based on the same technology.

The demand for smartcards in the healthcare and transportation sectors is

expected to reach 350 million by 2005. The Employee’s Provident Fund is soon

to issue smartcards for its 2.6 crore subscribers, which would be used to access

its 267 offices.

One of the features that is driving smartcard deployment in India is the

multi-application card development. Says Simon Lang, head, smartcards solutions

center, iSmart: "The market is evolving from simple to more sophisticated

cards. We are at the dawn of the multi-application smartcard era right now. The

use of smartcards by companies–for identification, security, and Internet

commerce–is something that will drive the Indian market for smartcards."

But this market has been slow, with this technology being deployed only on a

trial basis.

The challenge to make smartcard technology accepted is that all pieces of the

technology be available and affordable. The driver of smartcard adoption will be

a combination of firms, including computer software vendors, Internet service

providers and companies that wish to conduct e-commerce transactions–banks and

credit card companies. It may have its advantages, but the concern for business

houses and individuals lies in the issue of privacy.

"The prevailing myth is that if all your information is on a card and

you lose it, anyone who picks it up will know everything about you," says

an industry expert. Cards could be used for storing credits such as pay

telephone cards and photocopier cards used in some educational institutions, as

well as for ID purposes and other applications in the transportation, retail and

government segments.

Vijay Parthasarathy, managing director of Gemplus India, says,

"Different organizations–such as universities and banks–can share

smartcard infrastructure costs. Though partnerships are the way of the future,

current systems, including operating systems, are proprietary and a worldwide

standard remains elusive". Smartcards carry other information besides

payment authentication. They can also store a personal biometric fingerprint or

iris scan to authenticate a cardholder’s identity. With proposals for national

ID cards gaining support these days, smartcards could find their way into every

citizen’s wallet.

Rahul Gupta/CNS in New Delhi