A 'Smarter' Alternative to Credit Cards?

6 June 2000
Are credit cards likely to be replaced as the preferred method of payment for Internet transactions? Many e-betting operators are hoping so, and they could be bumped by smart cards, such as the one being used for the Hong Kong Jockey Club's (HKJC) new mobile betting service.

The HKJC recently entered a deal with Cable and Wireless HKT and Oberthur Card Systems to make mobile betting available, along with an easily used payment solution, via WAP. The payment solution from Oberthur enables subscribers to place bets, transfer funds from their bank accounts to pay for the bets and deposit winnings, all via their mobile phone. Additionally, users can purchase lottery tickets by making manual or random choices and check balances on their betting and bank accounts. The service supports all Hong Kong banks.

While the HKJC is the only e-betting company to currently use Oberthur's unique smart card payment system, at least one other Internet betting company has contacted Oberthur about utilizing a similar system, according to Francine Dubois, Oberthur's director of corporate marketing communications.

In another development that could benefit Net betting companies, Oberthur inked a deal with Philips Digital Networks to develop a secure, flexible and personalized e-wallet service that can be accessed via a set-top box and displayed on the TV screen. The unique system uses an "online wallet" to store the user's personal applications and services, such as payment, loyalty and identification. With this system, users can easily pay for purchases and services by inserting their smart card into a slot on the set-top box. "The flexibility, security and instant authentication offered by a smart card solution ensures Pay TV becomes a viable and efficient mode of bringing e-commerce to everyone's fingertips," said Mathieu Goudsmits, business manager for CryptoWorks at Philips Digital Networks.

While the Internet is widely used in North America (according to NUA Limited the number of U.S. users is now at 304 million), both WAP and interactive television are more widely available elsewhere. Datmonitor reports, for example, that Europe is expected to have 39 million digital television households by 2004. Gartner Research estimates that e-commerce through TV portals in the U.S. will reach $10.7 billion in 2004.

Already, several U.K. bookmakers are taking bets over multiple media, including telephone, Internet, WAP and iDTV.

Similarly, the Norwegian National Lottery, Norsk Tipping, announced a plan to use a different smart card payment system when it's lottery becomes interactive this summer.

The card used for the Norwegian lottery incorporates the MULTOS smart-card chip, Mondex electronic cash, Posten SDS' electronic identification, and a player application for Norsk Tipping's various games.

Oberthur Card Systems has positioned itself to develop new payment systems too. The company, formed in 1999 by the merger of Oberthur Smart Cards and De La Rue Card Systems, is the world's largest supplier of VISA and MasterCard cards as well as the world's leading supplier of Pay-TV smart cards. It manufactures everything from magnetic stripe cards to the most advanced smart card-based solutions for banking, telecoms, transport and commerce.

Gambling connections aren't too far off either. The new company is majority-owned by Francois-Charles Oberthur Fiduciare, which is the largest instant lottery card producer, and one of the top security printers of bank notes, checks, passports and identification card world wide.

Oberthur is one of several companies developing new payment systems that could be used for interactive gaming. It is still too early to tell whether any one system will become the leading payment system, or if several will become popular. One thing is for sure: Patience is likely to pay off for those operators willing to wait. Credit cards may be replaced as a payment option on betting sites, and some operators probably can't wait for that day.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at vicky@igamingnews.com.