Smart Cards Key to Mobility and Security From Payment to Personal Healthcare Records

Smart Cards Key to Mobility and Security From Payment to Personal Healthcare Records

More Highlights From Smart Card Alliance Annual Conference

SMART CARD ALLIANCE ANNUAL CONFERENCE, OCTOBER 12, 2007–The vigorous take up of contactless payment in the United States and its future in mobile phones, plus a Mount Sinai Medical Center initiative to give patients control of their own health and hospital registration information, highlighted day two of the Alliance annual conference.

Contactless Payment

Conference presenters representing payments brands, merchants and issuers were universally enthusiastic about the uptake of contactless payment in the United States.

“I think the egg has hatched,” quipped Andrea Brandt when asked what advice she would give other merchants about contactless payment. Brandt should know. As financial services manager for Meijer, a retail supercenter chain headquartered in Michigan, she has been involved in accepting and issuing contactless payment cards since 2005. Based on 15,000 contactless payment terminals in 181 Meijer stores, Brandt reports a 44 percent monthly sales lift for customers paying with contactless cards.

Another merchant reported scoring a touchdown with contactless payment–the Baltimore Ravens stadium. Simpler and faster than cash, contactless payment raises the average transaction by $8 and reduces time in line, getting fans back to the game faster according to Kevin Rochlitz, senior director for the Ravens. So was investing in contactless payment acceptance for the 420 payment locations in the stadium a good investment? “Absolutely!” Rochlitz responded enthusiastically. “We have a big cash business and a young audience; it was definitely the right decision. We feel it’s a form of payment everyone is going to want to use. They all want to get through the line faster,” he said.

Michael Liard, research director at ABI Research, estimates that there are 150,000 contactless payment terminals in 55,000 retail locations in the U.S. That number of continues to grow. For example, BP will start accepting PayPass at 3,000 U.S. locations next year, Ken Moy, vice president eCommerce for MasterCard, told attendees at the conference. John McLaughlin, vice president of USA Technologies, said his company is currently installing contactless payment on 7,500 additional vending machines for Coca Cola Enterprises. And Jason Barth of ACS said more than a dozen airports have committed to accepting contactless payment including Atlanta, Chicago, Philadelphia and Dallas.

The Smart Card Alliance recently published an implementation guide for merchants interested in accepting contactless payments, available on the Alliance website.


Transit operators in every major U.S. city are implementing contactless smart card-based fare collection systems, and for good reasons. “We were convinced we wanted to get smart cards in the hands of our riders; it’s the fastest way to get on a bus or enter the subway,” Jonathan Davis, deputy general manager and CFO of the Massachusetts Bay Transportation Authority told conference attendees. Since his organization launched the “CharlieCard” at the start of this year, they have issued 1.4 million of the contactless fare cards. The decision to give the cards away free paid off, according to Davis. Riders now pay for 60 percent of their subway trips and 78 percent of bus trips using CharlieCard. Davis said riders see it as so efficient that if someone pays with cash and slows things up, other passengers will suggest he get a CharlieCard.

Davis touched on another hot theme of this year’s conference, which is the use of contactless payment cards issued by financial institutions in America’s transit systems. “I think we want to take advantage of that,” he said.

Consumers seem to agree, based on results from a PayPass/New York MTA pilot reported at the meeting by MasterCard vice president of transportation Burt Wilhelm. If it were accepted everywhere on the system, 75 percent of credit and 71 percent of debit pilot participants would prefer to use PayPass for transit payment. “Customers want to maintain consistency between the retail and transportation payment experience,” he said.

The Utah Transportation Authority announced plans to implement contactless fare payment across their full system in the coming year, including contactless bankcards, after their successful ski pass pilot last year.


The rapid growth in contactless is paving the way for the next big wave–contactless payment using mobile phones. Wireless, banking and transit industry leaders and their technology partners have been organizing the standards, systems and business models needed to make this a reality.

At the heart of it is Near Field Communication (NFC), a technology standard that enables safe, fast and simple wireless communications over short distances of an inch or so. While it can be used in many different devices for many different applications, what is getting the most attention is putting it in mobile phones and using it for contactless payment, including in transit systems.

For one thing, NFC is designed so that it is compatible with the base of contactless payment devices being installed in the United States, providing a ready infrastructure.

“Mobile payment is the killer application for NFC and it comes ready right out of the gate,” Mark Ferdinands, director for G&D North America and representing the GSM Association, told conference attendees.

“We all believe mobile payment will happen; it’s not a question of if, it’s a question of when,” Deborah Baxley, partner, strategy & change practice leader, IBM Canada Ltd. said. Baxley and 26 other Smart Card Alliance members contributed to the recently released white paper, “Proximity Mobile Payments: Leveraging NFC and the Contactless Payments Infrastructure,” that describes the key considerations for stakeholders implementing mobile payments.


“When was the last time you looked at anything other than a piece of paper for your healthcare information? The healthcare industry needs to catch up,” said Frank Avignone, vice president of Cocentrx.

The healthcare industry is learning that smart cards can help by serving as a personal, portable patient record–speeding up registration, reducing fraud, improving the quality of care and providing rapid access to critical information in an emergency. There is a huge potential for savings in many areas, according to Paul Contino, vice president of Information Technology at Mount Sinai Medical Center. As an example, he cited one major hospital that did an exhaustive analysis of its medical records and found 200,000 duplicates. Fixing those problems costs between $60 and $100 each. “That’s $1.5 million in medical record clean up costs, and you have the problem again every two or three years because of registration mistakes. You can avoid this cost with smart cards,” said Contino.

Contino heads up a program at Mount Sinai to issue and use smart card-based personal health records that contain identification and insurance information to speed up registration and reduce identification errors. It also stores medical information such as allergies, current medication and a recent history of tests and procedures. This information helps avoid medical errors and duplicate procedures. It even contains an EKG, something emergency room doctors say can be extremely valuable in an emergency, but is hard to come up with when every second counts.

It is also very privacy sensitive and secure. Information on the card is encrypted, and the patient must enter a personal identification number (PIN) for healthcare givers to access information, giving them full control over their privacy, an essential requirement for HIPAA compliance.

Mount Sinai and their technology partner Siemens are working with ten other New York City area hospitals that plan to use the same technology in what they call the HealthSmart Network.

Lake Pointe Medical Center near Dallas, a Tenet hospital, is planning a similar smart card pilot starting in January. Dale Grogan, a director for SMART Association, a membership loyalty marketing organization serving the healthcare industry, made the announcement at the conference that the hospital will become the first client to use their new LifeMed patient registration and personal health record.

About the Smart Card Alliance

The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology. Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the United States and Latin America. For more information, please visit