Message-ID: <199703061544.AAA02027@inetnif.niftyserve.or.jp> Date: Fri, 7 Mar 1997 00:40:00 +0900 From: FORWARDED <mailto:QWA01214@NIFTYSERVE.OR.JP> Subject: FWD: SOUTH AFRICA-TELEMATICS: In the Fas To: mailto:DEVEL-L@AMERICAN.EDU
Date: Mon, 3 Mar 1997 10:08:14 -0800 (PST) From: Babatunde Harrison <mailto:baba@igc.apc.org> Errors-To: mailto:owner-nigeria-watch@igc.org/* Written 3:07 PM Mar 1, 1997 by newsdesk in igc:ips.english */ /* ---------- "SOUTH AFRICA-TELEMATICS: In the Fas" ---------- */ Copyright 1997 InterPress Service, all rights reserved. Worldwide distribution via the APC networks.
*** 26-Feb-97 ***
Title: SOUTH AFRICA-TELEMATICS: In the Fast Lane of Chip-Card Technology
By Gumisai Mutume
JOHANNESBURG, Feb 26 (IPS) - The world's first multi-functional chip-card was unveiled Wednesday in South Africa where bankers hope it will help curb rampant white-collar crime and put the country at the cutting edge of the telematics revolution.
South African banks are world leaders in chip-card technology, according to Visa International Chief Executive Ed Jensen.
The card, which was launched by Visa International in collaboration with four South African banks, has been described as a giant leap into a cashless society.
The smart card or stored-value card, which banking experts anticipate will ultimately replace the magnetic stripe card, is a payment card with a microchip embedded in it.
It can carry details of one's account balance, which can be loaded onto it and debited in the same way as a telephone card, personal data, and even one's medical history.
And for most people who carry a card for almost everything, the new card is a dream come true.
''South African banks are making history ... You can pay for your morning paper using the electronic purse function, pay for lunch using money in your bank account, and buy a new suit using your credit facilities,'' said Jensen.
''This card is also exciting because it enables the banks to offer the convenience of payment cards to new customers -- customers who may not have a banking history and might not qualify for a traditional credit card,'' he added.
Out of the country's 12 million economically active people, there are only about three million credit cards in the country. It is hoped that the new card will revolutionise banking and get South Africa's rural population, which is cut off from the bulk of banking facilities, on board.
Developing countries can take advantage of chip-based, off line pre-authorised card systems for use in areas where banking and telecommunications are limited. This is also a cost-effective way to by-pass intermediate technologies prevalent in Western countries.
There are currently more than 140 chip-card projects underway in the world today. It is estimated that within the next decade most cards worldwide will contain chip technology capable of storing, processing and managing data.
One of the advantages of the integrated circuit chip over the magnetic stripe is that it allows businesses to create, on one card, multiple applications.
In the information technology industry, work on chip-card use to serve business needs of secure access is in progress. And, work to secure purchasing on the open markets, such as the Internet, is being developed.
A programme which eventually will develop into the world's first stored-value card system with cross border capabilities will be launched in Taiwan in mid-1997, and will involve an estimated 200,000 people.
Such initiatives pave the way for possibilities of a similar programme in the Southern African Development Community (SADC). Already South Africa is part of a multilateral monetary agreement with Botswana, Lesotho, Namibia and Swaziland.
Gerald Kitchen of Nedcor Bank says the card is also a step in the right direction to combat credit card fraud in the country.
In 1995, commercial crime amounted to 590 million U.S. dollars, far outstripping all other single categories. Some 49,000 incidents of fraud were committed in 1990, rising to 53,000 in 1995, according to Nedcor's crime report compiled last year.
France successfully reduced fraud levels through the use of single function chip technology during the last one and a half decades.
Kitchen says however that while the chip is technically a step into more secure terrain, it is not completely fool proof as it depends on a personal identification number (PIN).
''The world does not yet have biometric technology to tie a person to his credit card ... and until such a time, the personal identification number (PIN) remains the most reasonable form of security,'' says Kitchen.
Technology such as retina recognition or the use of DNA to verify whether the holder is indeed the owner of a card is yet to break into the commercial system.
There are currently three types of credit card technology -- the paper-based, over the counter mode which relies on the customer's signature for authentication; the magnetic stripe which simply allows access to a holder's account through a dial-up operation to a central clearing authority; and the chip. Because it is self contained, the chip is much safer.
''With the magnetic stripe you need to protect the communication line to the central location and you also have to protect the terminal,'' says Anne Cobb of Visa International's Africa operation.
''The chip is therefore an additional technological security for both the card holder and the issuing banks,'' Cobb adds.
There are more than one billion credit cards in use across the world as plastic money takes preference over cash and cheque payments. Visa International, which accounted for half the world market last year, tallied 928 billion U.S. dollars in card holder expenditure.(end/ips/gm/pm97)
Origin: Harare/SOUTH AFRICA-TELEMATICS/ ----
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