Are Smart Cards, Er, Smart?

American Express is at the helm again. They are serving up smart cards to customers long before anyone else in the U.S. has even hopped on the bandwagon.

What makes a smart card smart? Well, each card is loaded with a mini-microprocessor that allows the user to enter identification data for each transaction. It works similarly to a bank debit card where the user must enter a password. Smart cards can also have an amount of money “loaded” so the user can use it like traveler’s checks. AmEx’s new Blue Card is a credit card plus. It comes with a menu of services, including a site where customers can pay bills online and fraud protection.

Europeans have been “smart” for a long time. U.S. companies realize that, with the need for tighter credit card security, it’s time to embrace smart cards. The booming e-commerce activity alone could help bolster smart card supporters.

Experts hypothesize that smart cards will grow in use 60 percent over the next year.

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