The American Bankers Association loaded its bank card conference program last week with forward-thinking, often highly futuristic ideas that may have left attendees with some unsettling afterthoughts.

They heard, for example, that their industry's future may not have much to do with cards at all, or at least cards as we now know them.

Roger Peirce, the former Visa technology architect who is now president of First. Data Corp.'s electronic funds services unit, wondered aloud why a panel discussion he took part in was titled "The Future of Cards."

Recalling how big a step the industry thought it took when it redefined its business as "bank cards" rather than "credit cards," Mr. Peirce said, "As we become increasingly electronic, I submit that even this might be a limiting vision.

"The actual card that we carry in our wallets is not the payment system, but merely an access device to the system," he said.

"It has its current form so it could be used in the old paper-based world, [so it could] fit into a manual imprinter" that allowed merchants to transfer the card's embossed characters onto a sales draft.

The card might now be defined as a carrier of electronic information, contained today in the magnetic stripe and perhaps later in a computer chip embedded in the plastic.

"Its shape has become less important," Mr. Peirce said.

"And when was the last time anyone looked at your signature?"

He suggested that the future shape may be something entirely different.

"If you think about it, the electronic access device could conceivably take any form," he said. "It could remain flat and be carried in your wallet. Or it could be a small electronic triggering mechanism, along the lines of those electronic car-door openers that you carry on your key chain.

Mr. Peirce also raised the possibility that the significance of brand names and prestige will diminish further.

"My gold card may impress a hotel clerk, but it's certainly not going to do much for a gas pump," he said.

"Likewise, in the mail- and phone-order industry, which is one of the fastest-growing segments in our business, the visual and physical properties of the card are meaningless."

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Catherine Allen, a Citicorp vice president and chairman of the multi-industry Smart Card Forum, told the crowd that the chip-card phenomenon is "moving much faster than most people think."

She based that opinion on what she sees happening in Europe and Asia, courtesy of her Smart Card Forum contacts, and she urged the bankers at the conference to wake up to a competitive threat.

"MasterCard and Visa and most of big banks are looking at [smart card technology], but the nonbanks will really drive it," Ms. Allen said.

While the card associations and potential partners are discussing a smart-card-based electronic purse that can displace cash, telephone companies, transit systems, and various other types of vendors around the world are already proving that "you don't have to be a bank" to get into that kind of card issuing.

Ms. Allen said Citibank is exploring the notion of a "virtual bank over the national information infrastructure" - computer-based delivery of services at any time and place the customer desires, using banks and any number of strategic partners necessary to pull the system and service package together.

Smart card technology dovetails with the "multiple application" nature of on-line electronic information services, and bankers must wake up to the possibilities before nonbanks pass them by, Ms. Allen said.

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Home banking took the spotlight at the card conference's closing session on Wednesday, Sept. 14.

James Grant, a senior vice president at First National Bank of Chicago and a renowned bank marketing and technology expert, said he has come around to staking his career and reputation on home banking's becoming a success.

He cited a First Chicago analysis showing that a minority of customer households actually create value for shareholders.

The rest are "value destroyers," he said, which calls for "new ways of thinking and positioning services ... Remote delivery will prove the essential success factor above all others."

Noting statistics that show consumers already do more transactions via telephone and automated teller machines than at branches, Mr. Grant said, "Remote banking will far surpass people-to-people banking" within a few years.

The technology is unstoppable, he said. Sounding much like Ms. Allen on smart cards, he added, "We're not in control of this rocket ship any more than we control who can issue plastic cards.

"There are lots of innovators who can step in and fill the void" if banks don't.

First Chicago was one of the partners of Microsoft Corp. and National Payment Clearinghouse in the development of the banking system for the Microsoft Money personal computer software. The bank is also nearing a decision on a screen-phone system to offer to people not using PCs, Mr. Grant said.

Also in the home banking discussion:

Cynthia Montgomery, a vice president at NationsBank of North Carolina, said units of the holding company are testing the waters in both screen telephones and personal computers, and see lots of work ahead.

Multiple device options must be supported, and their technology is evolving rapidly. Also, customer service can be complicated because it is not always easy to provide one point of contact.

"The look and feel of the bank is not always easy to control over these new channels," Ms. Montgomery said.

Matthew Cone, business development manager at Microsoft Corp. responsible for the Microsoft-based banking service, said the Money 3.0 software has removed most of the impediments that slowed the growth of banking via PC.

"It turns the personal computer into a personal financial control center," Mr. Cone claimed.

He added that more banks will enter the Microsoft program this fall, joining First Chicago, Michigan National Bank, and U.S. Bank of Portland, Ore.

Allen DeCotiis, president of Payment Systems Inc. in Tampa, Fla., presented market research showing that many attractive market segments are strongly attracted to new modes of banking delivery.

About three households in 10 reported this year being less dependent on branches than in 1989. Extrapolated PSI data indicate that 56.6 million households, 11 million fewer than in 1989, still prefer do conduct banking business face to face.


Back in the trenches of today's card industry, vendors continue to do battle with, and against, technological vagaries.

Banc One Corp. and Andersen Consulting sponsored an exhibit to promote their joint software venture, Triumph.

They did the same last year, only to encounter widespread skepticism as to whether this long-promised card processing system would ever be real.

"It's real," said Donna Naypauer, one of the Andersen consultants on the Triumph detail. This refrain must have been repeated hundreds of times during the conference.

With orchestral music in the background - symbolizing Triumph's promotional claim to being "a well-orchestrated system" -Banc One and Andersen hosted celebratory receptions at their booth each day.

They also handed out case studies detailing how "real" Triumph became in recent months with conversions of two Banc One affiliates and some 1,000 institutions in the Credit Union National Association's card services program.

The numbers: 7.1 million accounts operational, volume increasing by 10% every six months, and 40.2 million accounts committed. The clients include two major European organizations, Barclays Bank's Barclaycard and GZS in Germany, and Banamex in Mexico.

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One other unfinished piece of credit card systems business, Total System Services Inc.'s TS2, is about ready for prime time.

Philip Tomlinson, president of the credit card processor that is 82% owned by Synovus Financial Corp., said it expects to "throw the switch this month" on the new generation of software, which would be about six months behind plan.

He said that without absolute assurance that everything is working right, there is no point in rushing into production.

Growing with the industry's increasingly proclivity to outsource, Total's client list. includes such large, different, and demanding players as AT&T Universal Bank, NationsBank, and starting this year, Bank of America.

"Five years ago, we never would have considered Bofa a potential customer," Mr. Tomlinson said. "That's how fast times change."

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