CONTACTLESS SMART

CARD TECHNOLOGY
ASSIGNMENT #1 PRESENTATION
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ia.com/business_vertical/5_
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AGENDA

History & Invention

Technology

Feature &
Performance

Overview
Stakeholders Perspective
Competition analysis

Commercialization
New Innovations

Market Success

SWOT Analysis
Effect on Competition

Industry Impact

OVERVIEW
The topic
Contactless Smart Cart
An innovation relating both Manufacturing and
Information

Industry need
Anti-fraud features: Magnetic card fails to provide it.
Memory card improves situation
Versatility: Memory card falls short for limited
space; cannot be reprogrammed; good for pre-paid
only
Data security: Memory card has questionable data
security. Industry introduces Smart card
Faster Technology: Contact CPU Smart card fails in
this aspect

Contactless Smart Card

A card with embedded computer chip that
stores and transacts data
Employs radio frequency (RFID) between
card and reader without physical insertion tap and go technology

Common applications
Conveying quick, secure exchanges such
as building access
Government or, corporate recognizable
proof cards (e.g. Passport, ID)
Transportation fare pass
Retail transactions (e.g. Visa, MasterCard)

HISTORY & INVENTION

TECHNOLOGY
Card requires only close
proximity to reader
Both card and reader have
antennae
The card and the reader
communicates through RF
Battery-less card; derives
power for internal chip from EM
signal
Range 10-50 cm

FEATURES AND PERFORMANCE

Security
Similar functionality to RFID
but significantly more secure

Reliability
Temper resistant encrypted
data

Portability
Convenience
53% faster than contact card

Standards set by ISO

STAKEHOLDERS PERSPECTIVE
20% of consumers use contactless payment
Speed and Convenience are biggest factors
Chase reports 30-40% less time at POS
American Express reports 63% faster than cash, 53% faster than
magnetic/pin card

Additional layer of security and transparency

Anti-fraud mechanisms

COMPLETION ANALYSIS
Innovation Security
Magnetic Very low;
Strip Card easily
duplicated
Memory
Card

Biometric

Cost
$0.25$0.75

Low; easily
$1.00duplicated;
$2.50
cannot be
tracked by oncard identifiers
Very difficult
to forge

$200$250,000

Advantages
Data can be altered, modified and
rewritten
Inexpensive to replace
Suitable for pre-paid, disposable-card
applications

Disadvantages
No pin protection; when lost/stolen, very high risk of fraudulently
Data can be harmed when exposed to magnetic fields
No CPU - therefore has limited functions
Cannot be reprogrammed

Higher security alternatives to mag stripe

cards
Convenient; no need to carry a card
Cannot be stolen or forgotten

Biometric devices are not durable; need frequent replacement Expensive

Once physical traits are compromised due to falsification, they be
replaced
Unable accommodate changes to the biometric due to ageing, illness
or injury

Contact
CPU Card

Encrypted
technology;
cards cannot
be cloned

$1.0-$20.0 Provides more memory

Microprocessor controls data handling and Time consuming: insert card, enter pin; not suitable for high traffic
memory access
operation
Can add/delete or manipulate memory

Contactles Encrypted
s CPU
technology;
Card
cards cannot
be cloned

Strongly influenced by environmental conditions, user training and

usability
Malware can break security model

$10.0$30.0

Can be used for multiple application

All features of contact smart card
53% faster than pin and chip
Physical contact with reader is not required

PIN can be stolen

No pin required for low value transactions or transportation cards;
prone to fraudulently if lost or stolen
Limited distance between card and reader required

COMMERCIALIZATION
Telecommunications
Banking
Health care
Transportation

Credit and Debit cards

Company

Transportation

Impact:

Place

JPMorgan
Chase

More than 7 million

Chase cards have
been issued

New
York

Citibank

plans to issue 2.5

million contactless
devices
has issued 2.5 million
debit cards with
MasterCard PayPass
technology

London

is expecting to issue
over 400,000 cards
with Visa Contactless
capability

Access control
Keybank

Well Fargo
Bank

Seoul

Experience:
10% off when
more than $15
was loaded on
the magnetic
card
paid by Oyster
cards

Impact:
20% increase
in bus and
subway
ridership

2.1 million
smart cards
issued
free transfer
proportion of
between bus
smart card use
and subway for for bus is over
smart-card
90% and 75%
users
for subway use

(Sources form: Marie, P. Martin, T &Catherine, M. (Nov 2009). Smart card data in public tra

MARKET SUCCESS
Global addressable market for contactless is
$2.9Trillion/year.
Revenue generated from contactless smart card
market will grow at a CAGR of 30.31% over the
period 2014-2019 globally
Globally, 20% of consumers use contactless
payment
Contactless payments market is forecasted to grow
from $4.32Billion (2013) to $9.88Billion (2018)
1Billion contactless payment cards will be shipped
globally in 2016, an increase of 170Million from
2010

INDUSTRY IMPACT
Increased Transaction Security with encryption
Major reduction in transaction time over cash or pin transactions
Easy payment in public transportation systems
Vast savings in cash handling expenses
Advanced analytic use tracking capabilities
Security access control

SWOT DIAGRAM

EFFECT ON COMPETITION

NEW INNOVATION
MOBILE PAYMENTS
APPLE PAY
GOOGLE WALLET
SAMSUNG PAY

SUMMARY
The most important card payment innovation in the last decade
New, safe way to pay that provides benefits to consumers, merchants,
and issuers
A technology allowing creativity and differentiation
An innovation leading up to numerous value-added applications
Exponentially growing market
What the future holds

SMART
CARDS

Q&A
ANY QUESTIONS?

Group Members: Samiya Jahan , Vuk Pejovic, Brett Lloyd & Shigeng Zhao

REFERENCES
http://vision.visaeurope.com/report-global-contactless-market-to-grow-33-5-to-2018/
http://www.toggletime.net/contactless-payment-using-contactless-cards/
http://www.mobilepaymentstoday.com/articles/mobilizing-emv-in-the-us/
http://www.journal.au.edu/ijcim/2004/jan04/jicimvol12n1_article2.pdf
http://www.smartcardbasics.com/smart-card-types.html
http://www.smartcardalliance.org/publications-contactless-business-benefits/
L. A Mohammed, Abdul Rahman Ramli, V. Prakash, and Mohamed B. Daud. Smart Card Technology: Past,
Present, and Future. Online source: http://www.journal.au.edu/ijcim/2004/jan04/jicimvol12n1_article2.pdf
Zouhaer MCHIRGUI.(2004). The economics of smart card industry: Towards coopetitive strategies.
Online source: http://www2.druid.dk/conferences/viewpaper.php?id=2528&cf=17
Marie, P. Martin, T &Catherine, M. (Nov 2009). Smart card data in public transit panning: a review.
CIRRELT.
http://www.smartcardalliance.org/
"Security of Proximity Mobile Payments", May 2009
"An overview of smart card technology and markets", Mark Furletty, April 2002