RETAILERS ARE ON DECK TO SET SMART CARD PILOT PROGRAMS

DENISE ZIMMERMAN

DALLAS -- Retailers may be divided on the promise of smart card technology, but they are beginning to come together in hopes of shaping the direction of future pilot programs.

The Smart Card Forum's new Retail Work Group, which meets here tomorrow, may include only two food retailer representatives, but those members -- and others -- told SN that now is the time for the industry to get involved. A handful of other food retailers are attending the meeting as guests.

The core membership of the forum, based in Tampa, Fla., is comprised of banks, government agencies, technology vendors, card issuers and processors looking to encourage wider use of the computer-chip cards.

"We felt that it was important for the supermarket industry to be represented because the financial institutions tend to guide the direction of these new card technologies," said Joy Nicholas, pricing manager at Ralphs Grocery Co., Compton, Calif.

Nicholas is a member of the group and is serving on behalf of the electronic payments systems committee of the Food Marketing Institute, Washington.

The other food retailer represented on the Work Group is Marsh Supermarkets, the Indianapolis chain that led the march into scanning 20 years ago.

Don Friddle, manager of corporate cash resources, told SN that Marsh chose to become involved in the group because a smart card-based electronic benefits transfer program under way in Ohio will affect the company's stores there and in border states.

"It looks like we're going to

be impacted fairly quickly," he said. "There are a lot of questions to be answered yet," especially in regard to retrofitting store equipment to accept smart cards.

The state of Ohio is expected to launch pilot tests of the program in the Columbus and Cleveland markets this year.

Both Friddle and Nicholas said their interest also lies in other applications for smart card technology, such as frequent shopper programs and electronic payments.

"That's why I'm there [in the group] -- to watch the trends and applications that are being discussed and try to provide our industry with updates on the timetables for smart card launches within the retail environment," Nicholas said.

"It's my role representing FMI to keep tabs on those pilots so if there is anything that is getting ready to explode, we are aware of it and can participate in the direction it takes," she added.

Another chain, among the top five in the industry, said the creation of a Retail Work Group for smart cards signals growing interest in the technology. The chain declined to join the group, however, due in part to the $15,000 fee charged to voting members and the low level of retailer involvement.

"I mean, look who's chairing it: the banks," said the executive, who requested anonymity. The Retail Work Group is co-chaired by representatives from Bank of America and VeriFone, Redwood City, Calif.

"It seems to me they need more of a voice from the retailer because that's who's going to be affected.

"I think it's good they formed it, though," he added. The chain intends to participate in a smart card-based debit card pilot test and explore applications for its frequent shopper and gift certificate programs as well.