Hypercom Corp. chairman and chief technologist George Wallner said smart card technology will be viable only if infrastructure changes go hand-in-hand with product innovations.

Mr. Wallner, a persistent critic of smart card economics and of the way banks have tested the systems, said he agreed with industry strategists that multiple services must be combined on cards to produce the necessary revenues.

But "if we as an industry are to deliver on the promise of smart cards," he said in a speech to the Secure Card and Commerce conference in Tokyo two weeks ago, "We must put in place new infrastructures, easy-to-operate terminals, faster telecommunications, and a more flexible transaction processing environment."

He pointed out that a stored value payment service standing alone will not justify chip cards that cost $5 or $10 to produce.

"Loyalty applications are emerging as one of the most popular" on smart cards, Mr. Wallner said.

But he said these are not cost-justified without debit, credit, and other services rolled in.

"We must recognize that smart cards are not a mission," he added. "Rather, they are a business tool that, with multiple applications, can make a good business case.

"Advanced point of sale technology and value-added programs must go hand-in-hand for smart card use to grow worldwide."

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