Smart Cards Help The Country Of Uganda Provide For Secure Transactions
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Business Solutions, April 1998
Smart Card Payment System Installed
PEP's smart card-based EMAX system was installed at the International Credit Bank (ICB) in the capital city of Kampala. Since then, it has become the most widely accepted payment system in Uganda other than the Uganda shilling, according to Gary Beadle of PEP's Smart Systems Division. He adds that:
Smart Cards Used In New Applications
Ugandan government agencies continue to endorse the Smart Money system. All government offices, including the Ugandan Army, must buy fuel with a "SmartFuel" card. Also, Smart Money is the only form of payment accepted for tax payments.
The success of "SmartFuel" has prompted government consideration for using smart cards for other systems, including driver's licenses, military identification and employee payment.
Smart Cards More Secure Than Cash
Beadle says The World Bank sees corruption and fraud as the largest threats to continued growth and stability in Africa. Prior to the introduction of cashless transactions, consumers and merchants alike were subject to daily threats of robbery, injury and even death. The situation was especially critical for merchants who, at the close of business each day, were forced to carry thousands of shillings to the banks for deposit. Furthermore, Ugandan government officials are concerned about fraud in fuel and telephone use.
Smart Cards Reduce Fraud
Patrick Katto, president of ICB, said in a recent newspaper interview that the Ugandan government "will save millions of shillings lost through fraudulent rackets in fuel. I can assure the public that the days of fuel fraud are over because the SmartFuel card is scientifically tested to check exactly that." The convenience and security factors surrounding the Smart Money or smart card system are becoming increasingly attractive to emerging economies.
Components In Smart Card System
There are three major components to PEP's Electronic Money for Advanced eXchange (EMAX) system:
Application Impacts The World Market
Beadle said the Ugandan application of the Smart Money system is prompting surrounding countries to sit up and take notice of smart card technology. PEP sees unlimited market potential in Africa.
"Doing business in Uganda has been easy," he said, "with none of the problems usually associated with Africa. Negotiations were quick and installation was completed within 90 days. Payments were wired in advance, in U.S. dollars, into PEP's bank account." He said merchants were quick to adapt to the system and the challenge of teaching Ugandans how to use PINs was overcome in a reasonable time period.
Encryption Software Included In Smart Card Solution
PEP engineers spent three months in Uganda installing the system, which includes computers, software, merchant terminals, smart cards and printers with a camera for cardholder photos. The engineers designed and built the merchant terminals, wrote the operating software and formatted the smart cards. The system also includes encryption software that had to be approved by the U.S. State Department before it could be shipped to Uganda.
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