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

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