Government, transit smart card developments may change the world of contactless payments

Government, transit smart card developments may change the world of contactless payments

Smart cards are a common solution to maintain security for employees operating within government agencies. Now, that technology will be used to streamline payments for their daily commutes.

One benefit of smart card IDs that many large organizations have begun to realize is the potential for integration with secure, convenient payment solutions. The Department of Defense has caught on to this trend and will be the first government agency to adapt its smart card IDs as payment solutions for public transportation and, eventually, debit card and ATM transactions.

Because the DoD's Common Access card has a similar format to all other federal smart card IDs, the announcement may signify the introduction of smart card payment solutions across the entire federal government. In fact, government documents requesting external service providers for payment card solutions hint that the technology will be spread out across the entire federal government.

To ensure security on government-endorsed payment cards, the documents cite a specific need for EMV compliance and tells providers to consider that the "payment solution should be sufficiently flexible that it could be funded from single or multiple sources and have the flexibility to be easily changed over time."

Since former President George W. Bush mandated contactless smart card IDs as part of 2004's Homeland Security Presidential Directive-12, government agencies have looked to extend the technology to everyday payments.

In fact, the Washington Metropolitan Area Transit Authority has announced a project that will meet the Defense Department's smart card payment for transit, and will raise it to accommodate any kind of contactless payment card. Not long after the government detailed its plans to offer transportation features on ID cards, Peter Benjamin, chairman of the Washington Metropolitan Area Transit Board, announced the organization will introduce features to allow commuters to pay fares with any smart card that meets international payment standards.

The developments that have come out of the federal government and D.C.'s public transportation authority have been seen as the first step toward an international smart card payment program for travel. By integrating international payment standards onto all debit, credit and ATM cards, Gilson projects major cities across the globe will offer contactless payment for fares, according to government technology news provider NextGov. Specifically, Gilson said travelers will one day be able to use a single payment card for train and subway fares in Paris, London, Chicago, Philadelphia and New York, even if it is the U.S. government's Common Access card.