Smart Technology and Smart Strategies: Critiquing the Path of Chip Technology

December 21, 2004


Boston, MA, USA December 21, 2004

Despite the lack of initiative in the US over the past few years, Celent believes that smart cards are not on their way to extinction, but will instead have a significant presence by 2012.

Smart cards, also called chip cards, are old news for many. Most people are aware of their applicability to payments, but have seen many programs fail in the US while they continue to rise in other parts of the world. In a new report, , Celent examines the evolution of smart cards and their likely impact on the US credit card market.

Several factors will determine the fate of smart cards, including the threat of fraud, EMV, and the overall migration of smart cards across the world. These drivers have been assumed for quite some time; other factors, such as the elimination of cash-based systems, radio frequency technology, and the proliferation of smart technology in other industries, are spurring the renewed interest in smart cards in the US.

"Those close to the payments industry and with an eye on the progress of smart technology know that smart cards in the US will one day take over magnetic stripes and revolutionize the payment industry, as they already have done in Europe," comments Ariana-Michele Moore, a banking analyst at Celent and author of the report. "It is only a matter of when and how. We wanted to give our readers some fresh perspectives on the issue and what we believe to be realistic, and not so realistic, assumptions."

The 33-page report contains 11 figures and five tables. A is available online.

of Celent Communications' Retail Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Michele Pace
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Table of Contents


Boston, MA, USA December 21, 2004

Smart Technology &  Smart Strategies

Return to report Abstract


  Understanding the Basics 5
  Previous Initiatives in the US 6
  EMV 10
  Proliferation of Smart Technology 12
  Elimination of Cash-Based Systems 15
  Rise in Fraud From Unexpected Places 17
  International Expansion 21
  RFID or Smart Cards: Room for Both? 26

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