Anz Leads Rivals In Switch To Smartcards

Anz Leads Rivals In Switch To Smartcards

Sydney Morning Herald
2 November 2001
Anthony Hughes

ANZ Bank has become the first of the major banks to issue ``smart" credit cards, revealing yesterday that it would distribute the new cards immediately to a large chunk of its customer base and invest in new merchant terminals to handle the technology.

ANZ is the second major institution to launch a chip card, after the ``Blue" launch by American Express in July, replacing the traditional magnetic stripe card with one also embedded with a chip to store more information.

In a $50 million leap of faith in the technology, ANZ claims it will be able to offer its customers better security for online transactions and more flexible and sophisticated rewards programs.

The bank's head of cards, Brian Hartzer, said: ``We are taking a measured approach to the roll-out. It's not an experiment. We have made a commitment.

``We are putting in place the foundation for the broad-based introduction of chip cards in Australia, capable of evolving over time to deliver services from banking to mass transit."

But Commonwealth Bank, which dominates the merchant acquiring market with about 35 per cent of the card terminals in shops, said yesterday it had not seen any interest from merchants or customers in smartcards. CBA's head of cards, Nick Kennett, said credit card fraud had also fallen in the past year at his bank, suggesting the fraud prevention claim of smartcards was overstated. It was unclear if the technology added significant value for customers, merchants and the bank, he said.

ANZ shares fell 35c to $17.49, though the shares traded ex the 40c final dividend.

Visa is encouraging issuers globally to introduce smartcards by 2005, but ANZ's roll-out by September next year will include only its proprietary cards, ANZ Gold and ANZ First, and not its most popular card, the Qantas Telstra Visa. Mr Hartzer said fees were unlikely to rise as a result of the introduction of the cards, unless specific features were developed that the bank could charge for.

The Australian Consumers Association's financial services policy officer, Catherine Wolthuizen, said smartcards had the potential to offer consumers greater convenience and security, but also raised significant concerns about how that information was used.

American Express's senior vice-president, John Steward, said his company was very pleased with the customer response to its heavily marketed ``Blue" smartcard, launched in late July and was tracking to targets. But he declined to disclose any figures.

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