Current Electronic Purse Development
The Mondex and Visa Cash electronic purse systems appear likely to dominate the UK market in the foreseeable future, but internationally the situation is far from clear. These systems vary significantly depending on the type of organisation operating the service. Historically the banking organisations have placed great importance on security, whereas public transport operators have been more concerned with the time taken to complete the transaction.
In public transport systems there is often a requirement to store centrally a complete record of the transactions. In part this is motivated by the requirement to accurately allocate subsidies among various operators for carrying passengers who do not pay full fares (eg in some countries disabled passengers are not charged for using local public transport).
Such a central record means that if a card is reported as lost, the card can be electronically cancelled the next time someone attempts to use it, and the rightful owner can be reimbursed with the value on the card at the time it was stolen. In practice, the central systen is often offline and updated overnight; this means that there can be up to 24 hours during which the stolen card can still be used.
In other types of system a record of recent transcations is stored on the card and the terminal receiving payment may record the serial number of the card as well as the amount of the transaction. However not all operators think it is essential to be able to trace individual transactions. If there is no record of transactions and someone cracks the security system, then they would have a perfect method of "printing money".
As smart cards contain increasingly powerful microprocessors and larger memories, a future development will be to have multi-functional cards with an operating system and a number of independent application modules. Therefore there is the possibility of a user having a card onto which applications are loaded by individual service providers (eg at an ATM).
At present it would appear possible that Multos, developed by Mastercard, will be one of the dominant operating systems, with application modules being written in Java. However, Visa have developed an open chip platform based on Java, which means that financial institutions are able to choose which operating system and suppliers they wish to use, and are not tied to one proprietary system such as Multos.
However despite the technological viability of such multi-application cards, their introduction is likely to be held up by a myriad of problems such as branding and retailer acceptance.