Just like last year and the year before, and well … the year before that, “contactless” was one of the main buzzwords at the 2008 Cartes trade show in Paris. And just like last year, vendors and card schemes have been boasting about their pilots and partnerships all over Europe, some involving mobile phones, others transport cards. But mass commercial rollout across Europe still seems a long way away, as business models remain to be clearly defined.

Proponents of contactless payments should not despair, however, as many technological innovations have taken years to finally meet their market. For instance, another concept that keeps on keeping on in the smart card industry is the use of a bank card’s PIN for online authentication purposes.

The first time I came across the idea of a consumer card terminal was at the very beginning of this decade. The system, developed by a consortium of French banks, card manufacturers and France Telecom, was called Cyber-comm, and mainly focused on online shopping

Back then, chip & PIN was very much a French speciality and the idea was to leverage the consumers’ familiarity with smart card point-of-sale terminals to offer the same level of authentication for online transactions. Cyber-comm, however, never took off. The cost of the terminals may have been an issue, and online scams had not yet made the headlines. Still, the overall concept continued to be promoted by vendors like Xiring and Gemalto, but the adoption of strong authentication solutions remained very limited beyond corporate users.

As it turns out, consumer adoption of chip and PIN “at home” did not come not from its initial proponents but happened last year across the Channel, with UK banks like Barclays introducing strong authentication in the retail space, although not without problems and complaints about the inconvenience of having to carry around a card reader.

Another solution might simply be to forgo the card reader altogether: Visa recently introduced a payment card with a built-in keypad and one-time code generator on its back, to be trialled by MBNA in the UK, Corner Bank in Switzerland, Cal in Israel and IW Bank in Italy.

Whatever the technology adopted, it is about time all European banks moved beyond the all-too-frequent login and static password approach. But unless it is mandated by some kind of industry-wide initiative, like EMV or Chip & PIN were, consumers had better keep their fingers crossed, and their passwords safe.

Filed under: Payments, Retail Banking, Technology