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Privacy Law Resources |
Smart cards are credit card sized micro-processors, which can be programmed to perform multiple functions. Many of the smart card based systems currently being developed in Australia will use smart cards as "stored value" cards or "electronic purses". These cards will carry electronic money as a substitute for cash, which can be used for small retail purchases, telephone calls, travel on public transport and a host of other small value transactions.
When smart card technology is discussed, international attention focuses on Australia, where a number of local and international smart card promoters have decided to test and launch their products.
The decision to use Australia as a base for the development of smart card systems is partly the result of a perception that Australians are quick to understand and embrace new technology. This perception appears to be borne out by the available evidence:
"Australian consumers, relative to those elsewhere in the world, tend to have a high acceptance of new and novel technologies. Australia is highly urbanised and concentrated in a relatively small number of cities. Awareness level and acceptance of the Telecom Phonecard, for example, is very high at over 97%." 1
At the same time, Australians have displayed strong opposition to intrusions into personal privacy. In the late 1980s, strong community reaction forced the federal government to abandon its attempt to introduce a national identification scheme, the so called Australia Card proposal. That proposal involved the issue of an identity card to every Australian citizen, which would be used to store personal information and facilitate extensive data matching.
More recently, a national survey has found that 74% of Australians consider the confidentiality of personal information to be a "very important" social issue - even more important than the economy and the environment. 2
A single smart card can store over 100 pages of information about an individual and/or their transactions. Smart cards also facilitate data matching (the computer assisted cross-checking of records held in different databases). The following pages describe the privacy issues which are likely to arise from the introduction of smart card technology, particularly the development of stored value and multi-function card systems in the commercial sector.
Stored value and multi-function cards are intended to supplement, and eventually replace, the more familiar magnetic stripe credit and debit cards. The effect of these cards on Australian society is likely to be significant. Commentators have acknowledged that "to compare a smart card to having a computer in one's wallet or purse is not an exaggeration." 3
This paper will also discuss the options available for protecting personal privacy in the context of smart card systems. As will be seen, smart cards have arrived at a time when privacy protection in Australia is virtually non existent: the federal legislation deals primarily with the public sector; the New South Wales legislation is facing a complete overhaul; and no other states offer comprehensive privacy protection.
Smart card promoters need to realise that privacy will be an important issue to address if their systems are to gain wide acceptance. While the rapid progress towards a cashless society gains momentum every day, there is a danger that systems will be implemented before the privacy issues have been considered fully.
The giants of the banking and computer industries are moving quickly, and without adequate privacy protections in place, the future for privacy looks grim:
"Imagine a world where no one remembers what purses were for, money is just an icon on the computer screen, and the First Bank of Microsoft knows what you ate for lunch. If every transaction can be recorded, some day soon tax returns will disappear - the authorities will know everything about you and simply debit your account with what you owe". 4