By Andy Williams, Contributing Editor, AVISIAN Publishing
Bankcard issuers wanting to set themselves apart from others may opt for a different form factor than the same old, standard credit card. Axalto’s new SmartFob is a surefire differentiator … and that is certainly one of the reasons it grabbed last year’s Sesames Award from CARTES for best new hardware.
With the ongoing U.S. rollout of contactless payments by the big three credit card brands – MasterCard, Visa, and American Express – competition is definitely heating up. And issuers are beginning to explore the new freedom that contactless technology brings to the payment token form factor.
As Xavier Chanay, president of product marketing and technology for smart card manufacturer Axalto put it, “there are two types of strategies used by banks for deployment of contactless payment. The most traditional one is the standard card form factor. Some banks want to use the same form factor because it’s what everyone is used to and feels safe about.”
But for those banks wishing to “differentiate themselves,” Axalto has a choice. Enter the company’s SmartFob, what the company calls a “trendy” payment device that can provide the same functionality as a contactless smart card. It consists of a SIM card module and a contactless keyfob, which can be equipped with a switch to avoid unauthorized transactions.
That’s right, it can be turned on and off. And it’s not limited to the standard fob form factors either. The technique could be used to create contactless payment capability in a watch, a cell phone, or any other personal object, said Mr. Chanay. It provides the same functionality as an ISO 14443 contactless smart card.
.The on-off switch is possible because the antenna has been separated from the chip. The miniature card containing the chip can be added after the keyfob production phase, just like a SIM card for a mobile phone. This allows the physical SmartFob to be mass-produced at a much lower cost than keyfobs in which the antenna and the module are bound together during production. Furthermore, these devices can be updated as often as necessary, just like SIM cards, simply by popping out the SIM and inserting a new one.
“When we spoke to bank customers in the U.S., they identified this need, which is how SmartFob was created,” Mr. Chanay added. And the reverse applies as well. “You could remove the module from one key fob and introduce it into another one. Everything that makes this your card is contained in the card module, not the fob,” he explained.
“It’s very cost and efficient in terms of logistics. We basically associate the strengths of the smart card with a low-cost choice of different form factors,” said Mr. Chanay. Since the SmartFob was announced in the fourth quarter last year, “we’ve presented it to some customers in North America and received a lot of interest,” he adds.
“The device that will contain the chip card module can be manufactured in high volume at low cost, in China or elsewhere,” says Mr. Chanay. “We can offer different types of management. We can do the fulfillment ourselves, personalize the card, insert the module into the SmartFob device; or we can ship it to the user and they can do the insertion themselves.”
He added: “One of the things we didn’t think about, was that banks might want to change the designs of their fobs on a regular basis. Something they liked about our solution is that they can redesign the fobs easily. They can order large quantities of the devices and would have no issue with throwing them away because their cost is very low as there is no intelligence in them until the card has been inserted, which is not the case with a normal fob,” he said. Axalto subcontracts the fob itself, what he calls a “piece of plastic and an antenna.”
Axalto produces a SIM card for GSM, and for the SmartFob, with the same format as a bankcard, he said. The precut module, about one inch long by one-half inch wide, “is very easy to remove from the card body. If you’re a GSM subscriber, you can insert this into the GSM phone. That’s what GSM users do every time they change their handsets. It’s very easy.”
But while Europeans and Asians have no problem replacing their own SIMs, “in the U.S. we don’t see bank customers doing the insertion themselves, so banks (will likely) want us to supply the finished devices,” said Mr. Chanay. On the other hand, he believes European banks will ask Axalto to ship the card directly to the end user and they will have their customers extract the module and insert it into the SmartFob.
As a final comment, Mr. Chanay stressed what he believes to be the overriding benefit of the SmartFob. “You can reuse all the manufacturing infrastructure, especially the infrastructure needed to personalize cards to make each of them unique and your own. If you have something completely integrated, you have to change the production infrastructure every time. The real value of this innovation, whether the end user does the insertion, or Axalto or the bank, is the efficiency in creating a new marketing offer for banks.”