In the early 1990's there were many predictions that so-called
"smart cards" would be revolutionary in their effect on our daily lives. At
the same time, came many concerns that these cards would infringe greatly on
personal privacy. Smart cards have, in some form, become very popular, but
the scope of that popularity has not reached the levels that were predicted.
Are there still unresolved legal issues holding back smart card development
or is it just the case that the technical infrastructure is just not there?
Though there are serious concerns with privacy as more and more aspects of
our private lives become stored on a single computer chip, I think we will
be able to solve these concerns as they arise. It takes time for individual
firms and government agencies to master the rapid technological growth that
is occurring. The idea that each person could carry a single card performing
all the functions that our wallets and purses and glove boxes accomplish is
still a long way from reality.
A smart card has no singular, precise definition. Generally,
though, it encompasses a plastic card with an integrated circuit chip that
can both store and process information. A smart card has advantages over the
typical magnetic stripe card by being able to make computations and
therefore can discriminate in what information it reveals to an outside
source. These cards are also more durable than a magnetic stripe card and
can be more secure because of encryption features. One concern with the
technology is that the operating systems of different cards may not be
compatible if they are independently developed. Standards should be
implemented, but dominant firms will likely attempt to grab the natural
monopoly market inherent in such a network of smart cards and smart card
readers.
The major legal issues involved in smart card technology are
mostly issues of privacy. The more we automate small transactions with a
card that can be traced to a single person, the more we risk giving the
government or private companies the ability to inspect the details of our
personal lives. A smart card could leave a trail of transactions which show
what we bought, what and where we ate, what roads we drove, what buildings
and doors we entered, how long we were there, and so on. People are willing
to risk some invasion of privacy for convenience, but laws and regulations
will be necessary to ease people's minds who would carry such a potentially
invasive conduit into so many private areas at once. It is not clear that
current laws would be sufficient to handle the issues that would arise.
Certainly the Fourth Amendment of the Constitution would impose some limit
on the government in gathering data of this nature, but private firms would
also be interested in consumer data and are not restricted in the same way
as the government. That there are many privacy issues, however, should not
stop technology from progressing. It is simply clear that the courts and
legislature need to monitor the potential pitfalls that efficiency and
convenience may harbor.
