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Target stores to offer smart-card services

By Jennifer DiSabatino
June 22, 2001 12:00 PM ET

Computerworld - Retailer Target Corp., in conjunction with Visa U.S.A. Inc., said this week that it will begin to offer smart card versions of its Visa credit cards to Target customers throughout the U.S.

The smart cards hold a computer chip that, when slid through a reader, will download coupon information from the Internet onto the card, which customers can use to save on purchases at Target stores. At the same time, Target can track customers' buying habits by linking their purchases to their system identification through the smart card.

"Target's adoption of smart cards signals momentum and mainstream acceptance for this new payment technology in the United States," said Visa's chief operating officer, Paul Vessey, in the announcement.

Target will begin issuing smart cards through its Retailers National Bank affiliate later this year and will install point-of-sale terminals that accept the cards for payment in all Target stores next year.

While Target isn't the first U.S. retailer to use smart cards, it is one of the bigger announcements, said Mark Huppert, a business technology consultant at Andersen, formerly Arthur Andersen LLP, in Chicago. The Mobil Speedpass from Exxon Mobil Corp., which can be used at gas stations, is one smart card that's already in use, he said. The Target announcement means that the technology could soon become part of mainstream retailing.

"Adoption has definitely been better in Europe and Asia than in the U.S. In China, for example, it's being used to replace identification cards. Smart cards have more security built into them," Huppert said. For example, it is easier to paste a photo onto a passport to create a false document than it is to hack into the coding on a smart card, he said. But, he added, "there's no foolproof technology when it comes to security. The killer app for smart cards until now has been for network security."

Meanwhile, in another smart-card announcement this week, Virgin Entertainment Group Inc. announced the installation of smart-card readers for its point-of-sale systems in all U.S. Virgin Megastores. San Jose-based @Pos, a transaction vendor, will provide its iPOS Transaction Computer (TC) card readers. Virgin already offers discounts on music CDs to customers who use the American Express Blue smart card.

The installation in Virgin Megastores includes 320 countertop-size iPOS TC payment devices combined with the @Pos M700 smart card reader attachments for all U.S. Virgin Megastore locations. The devices allow customers to conduct secure credit transactions, review a line-item display of their purchases and use smart cards to access discounts on selected CDs, the company said.

"Implementing this system allows

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