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Banking industry

Atlanta Smart Card Pilot Faces Challenges in Gaining Consumer Adoption

Strategic Insights

— 2 min read

The highly anticipated Atlanta smart card pilot, led by First Union Corp. and Visa, is set to launch on January 1, but the companies may struggle to persuade consumers to use the stored value cards, which will be issued in denominations of $10, $20, and $50, until a re-loadable feature is added in April 1996. The pilot aims to issue up to 1 million smart cards in the Atlanta area before the 1996 Summer Olympic Games, with the goal of creating an open-system smart card pilot in the United States.

Key Takeaways:

  • The Atlanta smart card pilot will face challenges in gaining consumer adoption due to the lack of a re-loadable feature, which will be introduced in April 1996.
  • The pilot aims to issue up to 1 million smart cards in the Atlanta area before the 1996 Summer Olympic Games.
  • The Atlanta test is unique for being the first open-system smart card pilot in the United States.
  • Consumers will be able to purchase stored value cards using ATM-like devices, but debit cards will not be accepted until April 1996.
  • The stored value pilot may not gain popularity until the middle of 1996.
  • VISA Cash will not be accepted throughout the entire Atlanta area, and consumers will still need to carry cash or credit cards.
  • First Union expects VISA Cash to be accepted at 5,000 points-of-sale (POS), which are not the same as 5,000 merchant sites.
  • Applied Communications Inc. is developing a re-loadable feature that will allow consumers to use their debit cards and ATMs to purchase stored value cards.
  • BellSouth will equip 200 public telephones to accept the VISA Cash cards and is developing a smart-card reader for its screen phones.
  • Diebold has created its line of iq System POS software, integrating credit, debit, and smart card transactions.
  • Schlumberger Smart Cards and Systems will provide an entire range of smart card applications, including chip cards, terminals, and systems.

Statistics:

  • The pilot aims to issue up to 1 million smart cards in the Atlanta area.
  • The stored value pilot will be accepted at 5,000 points-of-sale (POS).
  • First Union's closed-system stored value card pilot at home games for the National Football League's Jacksonville Jaguars has surpassed the bank's expectations.
  • Schlumberger has sold over 150,000 smart-card based pay phones to over 50 countries.

Sources:

  • First Union Corp. (FTU)
  • Visa
  • Applied Communications Inc. (TSAI)
  • BellSouth
  • Diebold Inc. (DBD)
  • Schlumberger Smart Card & Systems (SLB)
  • Alexis Ellison, First Union (704/383-7157)
  • Roseann Clavelli, Visa (415/432-3439)
  • Shelli Ryan, Applied Communications Inc. (402/390-8906)
  • John Goldman, BellSouth (205/977-9507)
  • Sandie Stambaugh-Cannon, Diebold (216/490-3775)
  • Patrick Gauthier, Schlumberger (804/578-7589)

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