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June 2005 • Volume 10 Number 6
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Member Profile: SMART System Technologies
1. What are SMART System Technologies' main business profile and offerings? SMART System Technologies, Inc. (SST) is a leading provider of merchant-centric 1:1 loyalty and coalition marketing applications and services. The company's PowerPay(TM) solution provides a quick and rewarding cashless payment experience to consumers, and a powerful marketing and segment-specific promotional communications tool to sports properties, branded merchants and retailers. Leveraging ISO 14443 standards for proximity card technology, as well as on-line hosting and SMS messaging capabilities, PowerPay is being used by thousands of consumers and multiple clients in Detroit and Philadelphia, representing the current largest deployment of multi-application integrated contactless payment and loyalty in North America. For more information, please go to www.SmartSystemTech.com. 2. How do you see the new contactless payment initiatives changing the U.S. payments industry? What trends do you see developing in the market that SST hopes to capitalize on? Many initiatives that are driving growth and change in the payments industry such as contactless payments, smart cards and mobile payment initiatives are all augmentations to the basic payment concept: that a cardholder presents a token to a merchant to perform a payment transaction. The token identifies the cardholder to the network and allows the merchant to accept payment from them for goods or services. It seems obvious, but is probably worth stating, that all retailers now have to pay a percentage of their transactions back to the card associations (i.e., MasterCard, Visa). With SST's integrated software, we will be able to bring in the tools to allow merchants to issue their own merchant-branded contactless tokens (cards, tags, even cell phones). This capability, along with various flexible alternative payment options that SST integrates with, such as pre-paid or ACH/check/debit networks will save merchants money on every contactless transaction their customers make, while simultaneously turning these interactions into 1:1 loyalty marketing touch points to build their brand loyalty, customer retention and deep understanding of consumer behavior and preferences in their environments. 3. What obstacles to growth do you see that must be overcome to capitalize on these new opportunities? Consumer and retailer education and adoption are probably the biggest obstacles all smart card-related technology companies face in North America. However, in Europe and Asia we have seen and continue to see ever-growing customer acceptance. We have to continue to educate retailers and consumers on the respective value propositions we bring to them through the effective application of contactless smart card technology so that they feel motivated and secure in adopting it. European and other trends also continue to generate relevant proof-points and learning for the North American market. 4. What do you see are the key factors driving smart card technology in the payments market? What role does smart card technology play in supporting SST's business? Key driving factors in the markets today are that retailers find RF-based contactless payment devices easy to use and like the increased speed and control of transactions. Besides moving checkout lines more quickly, retailers are seeing increased revenues, as consumers spend more per transaction and transact more frequently. Merchants see contactless payment as a means to increase secure electronic transactions in traditional cash-only retail segments, while incorporating customer-facing programs and services. System integrators, acquirers and ISOs can gain additional revenue and help their retail customers take advantage of the benefits of contactless payment. A range of smart card technologies plays a pivotal role in our business (hence the "smart" in our name). These are quickly becoming the most accepted components for secure and rapid transactions, identification, and authentication around the world. SST's business was founded on strongly leveraging appropriate smart card technologies, with a suite of proprietary hosted applications, including our promotion/loyalty and marketing solutions, which help merchants and retailers target the consumer segments they want to retain and expand. 5. How do you see your involvement in the Alliance helping SMART System Technologies become successful? Partnering with the Smart Card Alliance allows SST to stay atop of current standards and changes within the industry's technologies and services. Through our involvement with the Alliance and their activities, SST can receive recognition that allows us to network with other alliance partners, suppliers and consumers.
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This month Smart Card Talk spoke with Michael M. Richardson, President & COO, of SMART System Technologies, Inc.
