It should come as no surprise that the smart card experiment on New York City's affluent West Side has been terminated.

Banks distributed hundreds of thousands of cards to consumers there to use instead of cash in stores. But the cards were never embraced, and the number of stores that accepted them shrank rapidly. By the end of the experiment there were few users and few places the cards could be used.

Sure, there were operational problems. There was no uniform system. And some retailers said they would need four additional terminals-beyond what they use for credit and debit card sales-to handle smart card transactions.

But the key reason it failed was this: There was nothing in it for the customer.

The smart card, which carries a chip that keeps track of how much money is loaded onto the card, was supposed to provide convenience. But you had to go to the bank to load it. You could be in trouble if you ran out of money midpurchase-something that doesn't happen when you look at the cash in your pocket before buying something. And, like cash, if the card was lost, there was no way to get your money back.

Its only real success was in the laundry rooms of apartment houses, where the smart card made it unnecessary to have a stack of quarters to run the washers and dryers.

To me, the problem with the smart card is that the people who developed it thought like bankers, not like consumers.

It was like when bankers tried to introduce direct deposit to corporations. The banker would explain it this way:

"Every week you prepare a payroll and pay your employees. Until they cash their checks and get their money, you have the use of it. But we are offering a new system under which the money can be moved automatically to their accounts and you can lose it three days on average or sooner."

"What's in it for me?" the customer would ask.

"It's new. It's state-of-the-art," was the banker's response.

Direct deposit never really took off until the cost of producing checks soared and employees began demanding it.

So the smart card is back to square one. And it shouldn't grow until the banks provide some incentive like a "frequent-user program."

We have seen this type of insensitivity in other industries. Auto makers decided we wanted big gas guzzlers and scoffed when other nations produced smaller, less expensive cars.

And today, computer makers are giving us "bloatware"-a phrase coined by Michael Bloomberg to describe computers that demand too much attention and repair because they do too many things - when all we want is a simple machine.

Knowing what the customer wants has always been the community bank's strength. We can only hope that small banks will continue to stress quick decisions, quick problem solving, and firsthand knowledge of what the customer really needs and wants.

It sure beats a little card that has to be filled up at the bank all the time just to make it as useful as a $10 bill.

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