Silicon Valley Roundtable News (summary of Dec 12 speaker's comments)

* Jerome Svigals, Publisher of Smart Cards and Comments, (415-365-5920)
discussed the economics and prospects for smart cards at the December 12,
1995, meeting of the Roundtable. Among numerous examples and statistics,
he included the following items:
 - Bank cards are big business (over 5.2 billion transactions, $437 billion
 sales in 1994)
 - Credit cards are a mature business today, and their penetration is
 changing slowly.
 - Smart cards are the wave of the future for 5 reasons:
 1-they have lower transaction costs than magnetic striped cards (the
 standard plastic card);
 2-offer major loss reduction compared to magnetic striped cards;
 3-the multiple application smart card (one example had 12 different
 applications) provides up to twenty times more revenues than standard
 credit cards;
 4- they are opening up new markets (transportation, entertainment, postage,
 other prepaid formats); and
 5- they can provide a unique transaction role not available to banks.

 - The economics of smart cards is attractive today. An economic comparison
 of smart card versus magnetic striped card reveals that smart cards cost
 $0.17 per transaction while magnetic cards are $0.29 per transaction. The
 comparison includes the total out of pocket costs such as card stock, pin
 validation, transaction authorization, and the useful life of the card.
 Moreover, multiple applications provide more revenues than standard cards.