Behind the Headlines: 'Smart' Cards under attack

Speaking on this week's Behind the Headlines Professor Trevor Watkins, deputy vice chancellor at South Bank University, said: "Smartcards may end up only being smart for the bank but not for the customer. They are competing in terms of low value transactions with cash which has been around for thousands of years and has proved highly effective."

Referring to a recent Mondex trial in Exeter, he said users had expressed fears about losing their cards, a feeling of guilt because they were holding up queues as they grappled with the new technology, and concern about how to top up the card from their current accounts. An earlier Mondex trial ended in failure in 1996 despite the involvement of 13,000 consumers and 700 retailers in the Swindon area.

Prof Watkins added: "The benefits need to be looked at from the customer's point of view and I find that quite difficult to articulate at the moment."

Richard Sykes, chairman of sourcing consultancy, Morgan Chambers, agreed with the diagnosis. "[The move towards smartcards] strikes me as very dubious. A tremendous amount of benefit will be felt by the banks. They aren't being honest about the shared benefits they are going to get - less money to write-off security failures, for example."

However, Thomas Power, founder of education network, the Ecademy, said users would miss out if smartcards were not adopted.

Referring to research released earlier this week which suggested the move towards chip-based technology would costs UK banks and their customers millions of pounds, Power said: "This is worth much more than £300m. This is a good thing for the individual. You currently have to deal with a number of different suppliers. Now you can have all that information on a single card."