Ohio's food stamp program is set to become one of the largest smart card applications in the world-and maybe a catalyst for the technology in this country.
By sometime in 2000, officials say, the program should have more than 450,000 valid cards in circulation, include 7,000 retailers, and move $89 million per month in food stamp benefits.
A pilot test involving 11,000 Dayton households and 95 retailers began in 1992 and has been expanded this year. Officials expect the program to cover all of Montgomery County, of which Dayton is the seat, by the end of April, and the entire state by 2000.
The program allows recipients to pay for groceries with plastic cards that have computer chips loaded with electronic food stamps. Participating merchants have special point of sale terminals.
The program is expected to save the government millions of dollars in overhead costs immediately.
Citicorp's EBT Services division was awarded the contract, worth $78 million over seven years. Stored Value Systems, a National City Corp. unit and subcontractor for the statewide rollout, designed and implemented the pilot program.
Most other states are implementing programs using magnetic stripe technology, which is cheaper and lets state governments piggyback on existing payment system infrastructure. But David Schwartz, EBT project manager for the Ohio Department of Human Services, said smart cards are a "more secure way of transacting business."
Though Ohio is a pioneer, "there is a strong indication that a lot of states will be migrating to smart cards in next several years," he said.
Four states led by Wyoming are seeking contractors to develop a smart card program called Health Passport for delivery of woman-infant-children, or WIC, payments. Health Passport may also include Medicaid, child health, immunization, and Indian health services benefits.
Bids are due April 12. The other states in the group are Nevada, North Dakota, and Idaho.
In February, Michigan issued a request for proposal to develop a hybrid card using magnetic stripe and smart card technology for its food stamp and WIC payments.
Gary Glickman, a consultant on the Ohio project, said it is "exciting" and will be "the largest consumer application of smart cards to date in this country."
Mr. Glickman, president of Phoenix Planning and Evaluation, said Ohio is planning to add other government applications, from drivers' licenses to Social Security. Smart-card delivery of a wide range of benefits would "save money in long run," he said.
The federal government is closely watching the program, partly funded by the U.S. Department of Agriculture, as a testing ground for the new technology.