But in certain cases, like these military programs, it is obviously a very different story. Perhaps the answer is that stored value smart cards work well when they applied to a situation that makes sense for them. Replacing cash in an open, consumer-driven world has failed to catch on in nearly every instance. However, the use in a closed environment in which use can be mandated can be great.

I was involved with a stored value smart card system for a football stadium back in the late 90s and observed what seems to me to be another key to success. A system that can use the smart card for total replacement/removal of cash brings far greater benefit to the issuer. In the stadium, the smart cards were used for concession payments but cash was still accepted as well. Though card usage was substantial, venue management eventually discontinued the program because it made their processes harder rather than easier.

Because cash was still accepted, they still had cash-handling costs and risks but now compounded these with new terminals, training, and user education issues.

In these military stored value programs, it seems that all three of the keys to stored value success have been met: a closed environment, mandatory usage, and total cash replacement. Perhaps this formula is key to the programs’ success.

Library subscribers can check out the article by clicking on the title below: U.S. Military relies on smart cards for a wide range of stored value payments

SecureID News eMagazine subscribers can look forward to reading the piece in the next monthly issue. Stay tuned.

If you have similar experiences, dissenting opinions, or other relevant thoughts please take a moment and post them as comments below for others to enjoy.