News Weather Traffic Sports
MoneyScope Technology Health

Aug. 7, 2001

Are You Ready to Shop with Smart Cards?

(New York-WABC, August 8, 2001) _ Fear of fraud: It's the main reason many consumers will not shop over the Internet. They believe their credit cards will be used by others. In tonight's Extra, the computer industry fights back. A smart card for your home computer is now hitting the market. Here's Jeff Rossen.

We live in the computer age. Why buy in person, when you can do it on-line? But many of you are worried about something.

Shopper: "That someone will get my credit card number and maybe purchase something else."

Enter the smart chip, a new type of credit card. It's called smart for a reason. This small card can store 100 times more information about you than a magnetic strip ever could. Makers say it's about as foolproof as on-line shopping can get. This is VISA's president and CEO:

Carl Pascarella, VISA: "The information is encrypted at the point of transaction, so that offers a higher level of security as well."

Compaq computers is jumping in, too. Their new keyboard has a special slot for the smart card. Here's how it works. If you've ever ordered anything on-line, you know the drill: Type in your card number, expiration date, and go. The smart card is different: You literally have to unlock the card, and prove it's you, before you buy. That keeps impostors away. Since it stores so much information, the computer will store your pin number, like an ATM card so, you have to be with the card to use it.

Will Townsend, Compaq Computer Corp.: "Today there about 50 emerchants who have that plug-in installed. That list is growing exponentially month by month."

It's not just Compaq in the game, other companies are working on the same technology- portable chip readers that will come to the market soon. It works the same way: you plug it into the back of your computer, take your smart chip card, and shop.

Sree Sreenivasan, Computer Expert: "What they're doing is saying, 'people are used to using credit cards and are comfortable with that- let's see if we can try a mix of the old way and the new way.'" When you buy a Compaq Presario 5000 or 7000, you'll get the new keyboard. Millions of smart cards are out there already, and executives hope millions more will flood the market this year.

Last Updated: Aug 8, 2001