LA Credit Card: The Smart Card

By: EconomyWatch Content Team   Date: 29 January 2010

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Although many states are now considering contactless swiping, credit card companies, banks, and credit unions were among the first to offer a Los Angeles credit card that could be processed without swiping.  Known as the “smart card”, this type of credit card was considered only a concept and a dream 10 years ago but today, it has become a reality.

At first, the idea was a failure in that it required merchants to invest money in a different, more advanced type of credit card terminal.  However, with new technology and growing fraud, merchants realized this was a great deal.  For the person with a LA credit card, interest was raised in that they realized this was more convenient and safer.

While this technology has been faced with a number of challenges and even concerns, the numbers for a contactless Los Angeles credit card has not yet reached intended heights.  Even so, it is estimated that approximately 25 such devices are currently in use.  For this type of device to work, it requires card designed to work with short-range radio so communication with the card the reader works.

The anticipation of the developers is that the concept will grab hold and end up being a huge success.  In fact, the goal is to more than double the number of devices in use within the next three years but this will require getting more merchants and credit card companies, banks, and credit unions to accept the technology.

For people with a Los Angeles credit card, the success of this new contactless system depends on a number of things that may or may not come to fruition.  In addition to merchants and carriers getting onboard, the success of the system also depends on the credit card.  Known as a “tap and go” system, once contactless payments with a Los Angeles credit card or a card from any state is accepted, other advances would follow.

As an example, with the contactless system in full force, people would be able to make all types of payments using cell phones and other electronic devices.  Many of the major credit card companies have been depending on the success of this new process, which would eliminate the Los Angeles credit card design that includes a magnetic strip.

Since most credit card fraud is done by using special skimming devices that attach to ATMs and stealing information from the magnetic strip, removing the strip would cut down on credit card crime.  The system is designed to store a number of payment products, primarily cell phones.  However, using an embedded chip over the magnetic strip appears to offer a number of benefits to the cardholder, issuing company, and merchant.

One thing that researchers agree on is that for the contactless credit card system to work, it had to be something that consumers want.  Without the consumer accepting a system such as this, the progress to get it off the ground would be slow.  Everyone also agrees that even if the contactless credit card does not hit the big numbers within the next three years, there will come a time not too far away that the standard for a Los Angeles credit card would be using the contactless system.


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