Magazine article American Banker

AMEX Testing Its First Smart Card, with American Airlines

Magazine article American Banker

AMEX Testing Its First Smart Card, with American Airlines

Article excerpt

American Express Co. will join the smart card parade with a test of electronic ticketing for American Airlines passengers.

After standing on the sidelines while the banking industry announced pilots around the globe and the bank card associations created an industry standard, the charge card giant is finally entering the ring.

Using technology developed by IBM Corp., the program lets passengers insert a corporate charge card with a computer chip into a reader at American Airlines departure gates. They would receive a boarding pass, without presenting a paper ticket.

The chip will contain the passenger's identification and frequent-flier number, which will be matched with ticketing information in American Airlines' data base. The cards, with magnetic stripes, will also function as corporate cards that may be used at any location that accepts American Express.

Most major airlines, including Continental, Delta, Northwest, and United, are testing electronic ticketing. Lufthansa, which has such a smart card program in Europe, may be the only carrier with one in place.

Initially the pilot program will be modest, with just "hundreds" of corporate charge cards combining magnetic stripes with chips being issued to American Express and IBM employees. But the plans are ambitious.

Bill Hohle, smart card technology leader, described American Express' venture as "the first step to a comprehensive multiapplication travel and entertainment product."

He envisions that cardholders could book travel, purchase airline tickets, expedite car rentals and hotel check-in, and electronically insert travel information into an expense report for reconciliation.

The pilot is to begin by mid-December at 21 U.S. airports, including ones in New York, Los Angeles, Dallas/Fort Worth, and Chicago. American Express provides corporate cards for IBM in the United States. …

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