located on a smart-card can be used only in internal card’s operations. This fact together with high level cryptographic security makes smart-cards valuable asset for financial systems demanding additional security and reliability. Because of that smart-cards are now considered to be the most promising kind of plastic cards. They can be also considered to be the most promising for their features. Smart-cards counting abilities allow card holder to keep multi-currency wallet. As predicted by VISA and Europay/MasterCard, smart-cards will replace magnetic line cards within the 10 year period.
The developing of smart technology
First smart-cards appeared in France in the middle 70’s. The main advantages as compared to magnetic line cards are higher reliability, security and multifunctionality. The main disadvantage that it is still difficult to get over is high prime cost.
Nevertheless, in early 90’s rapid growth of smart-cards market took place. Thus, at the last smart-technology forum (SmartCard Forum), hosted in the USA, statistical reports showed that the majority of magnetic line cards owner would use smart-cards as electronic wallet if their bank issued such cards.
But financial institutes that working with smart-cards have a lot of questions at the moment. Many of these questions still do not have answers. Here are the most popular ones:
How high is the level of smart-cards security?
What schemes should be used for transactions: open or secured?
How available and reasonable is the complete replacement of cash with electronic money?
What authorization mode is better: on-line or off-line?
The fact of existence of these questions demonstrates that there is a high interest in smart-cards connected with an ability to transform little sum payments into cashless payments. Visa researches show that annually more then 1,8 trillion dollars happen to less then 10 dollars transaction. Obviously operation of these payment through electronic cards is more than attractive. But the organization of such transformation hits upon serious problems even in well developed countries. In this case solving this problem with a help of electronic wallets seems to be the most effective. According to Jean Jacques Debone, the president of European branch of Visa International “the development of smart-cards, allowing the client to make less then 8 dollar payments, will treble bank’s cards profit”
Smart-cards appear in Russia
Smart-cards as bank’s cards
BGS Smartcard Systems AG is the official dealer and distributor of Visa International smart-technologies is Russian and the former USSR market. It was founded in 1997 and holds right for software and technologies of cashless payments based on U.E.P.S standards. U.E.P.S. – universal electronic payment system is a system based on smart-card technology. The main technological feature of U.E.P.S. is that all transaction operations are done in off-line mode trough direct contact of two smart-cards. BGS introduced several large projects for Sberbank of Russia, Promstroybank, Inkombank and some other banks and bank’ unions in Russia, the leading banks of Uzbekistan, Ukraine and Kazakhstan. In September 1996 BGS signed the agreement with Visa International on developing and migration of smart-card product COPAC including U.E.P.S. as a basis. The matter for greater interest is joint project with Sberbank on creating the united smart-card system (SberCard cards). Taking scale of spreading and recent issue date into consideration we can say that SberCard is on of the most promising card in Russia.
On Sep 13 1996 during annual meeting of banks-members of international payment system VISA International announced a new product – a new plastic card with microprocessor Chip Off-line Preauthorized Card. This product has no special brand name yet, abbreviation COPAC was taken as a working version of a brand name.
Since 1992 BGS company has exclusive right for distribution U.E.P.S technology in the former USSR, Western Europe and Austria.
VISA International declared in the second quarter of 1997 of the new pilot project with Sberbank of the Russian Federation and Inkombank (Union Card) on introducing COPAC technology. After this the pilot project was over new COPAC specification became
available world wide.
Smart-cards as corporate cards
The greatest company offering corporate integrates smart-cards systems in Russia is IT company. Founded in 1990 today Information Technologies Co. (I.T. Co.) ranks among the top three Systems Integrators in Russia, according to the Dator marketing agency and Russian Computer Union opinion poll statistics. Reporting annual revenues in excess of $27 Million, I.T. Co. has deployed over 500 projects in Russia and the CIS for industrial enterprises, trade companies, government, and financial institutions. In 1996, Computer Press magazine granted I.T. Co. an award “For Outstanding Results in Developing the Russian Computer Market”, and was included into the State Registry of Quality Systems. Having extensive experience in the development of information and computing systems, I.T. Co. has created a broad product line of private-branded high-tech software and hardware solutions for the local and international market. Since 1990, I.T.Co. has focused on meeting the demands of what is now today's competitive global marketplace. As businesses, large and small, progressively long for ways to interface with all of their suppliers