CONTRACTUAL RELATIONS OF SMART CARD SYSTEMS

INTRODUCTION Smart cards get important role in more and more cases in the implementation of various services . The proper development of smart card systems and the contractual relations between the actors necessitates legal handling.

The speciality of the legal matters comes on one hand from the fact that to handle them appropriately needs to have proper IT knowledge background, and needs to know the card system’s general architecture and the business models of them. On the other hand the specialities come fromthe fact that many of the services which are provided with the smart card system (eg, electronic signature certification services, e-wallet) are strongly regulated by law which regulation must be properly handled. The handling must be done firstly during the starting of the infrastructure, and on the other hand, during the regulation therelationship between the actors with concluding proper contract.

OPERATORS, FUNCTIONS, DUTIES AND RESPONSIBILITIES IN THE SMART CARD SYSTEM The actors of the smart card system are in normal case the card issuer and the cardholder The smart card gets role in the relationship between the two actors (eg, different service relationships, health services relation, credit relationships).
Unlike the above two operators the model of the smart card can separate from their service provider and several, card issuer and service provider can play role in the card system. In case of more actors the operator of the system has important role, deriving from the fact that the system operator makes contract with the actors which is defines what services can be reached by the card holder through the card system. In addition the processing of transactions made by using the smart card or loading applications to the smart card can also be a separeted role in the card system.
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The relationship between the smart card system’s actors is always regulated, firstly with individual contracts between the actors and with general terms and condition between the service provider and the consumers.

In the contractual system, the matters to regulate is firstly the sharing of tasks between the actors which is only possible with knowing all of the tasks, to avoid the latter disputes. A very important viewpoint of managing the duties and responsibilities, that those, in the system’s - both business and consumers - contract be treated with consistence, and the score of the uniform tenets.

PROVISIONS REGARDING SOFTWARE AND HARDWARE COMPONENTS OF SMART CARD SYSTEMS It is needed to ensure the interoperability of the software components (eg, card operating system, card application software, management software, card terminals, software which personalize the card, and the central terminal communications software, server-side transaction processing, database management software, etc) in the smart card system not only during the procedure of the developing of the system, but also during the further developments, which must be reflected in the concluded contracts. It is also necessary to ensure that the adequate actors of the system have the proper copyright to use all the necessary software components for proper functionof the services carried out.

In the chip-card systems in addition to the smart card - in many cases, users do not see - hardware component plays an important role. Such component is the card terminal - which in some systems may be the cardholder's own computers as well - communication system between the terminal and the center the central transaction processing system, the system which personalize the cards.

FEES AND CLEARING IN THE SMART CARD SYSTEM In the smart card systems – jn case of multi-actor model – between the system’s actors(in particular the terminal operators, the card system operator, service provider, the card issuer, etc) the fee can be determined firstly by the business model. Fixed per-transaction fees, proportional transaction fees, time-based usage charges, or periodic fixed fees.

The clearing of the fees can be made in advance, and subsequently, but very important consideration is, that for any of the system’s actors from cash flow point of view, can be extremely important to be available some of the fees, so this is an important consideration to put it into a contract.

PRIVACY ISSUES IN THE SMART CARD SYSTEM From privacy point fo view, in case of smart card system firstly the control of the access of the stored datas on the card (what is needed to be followed by mapping by logical control means),stored in eitherin central systems the datas which can be accessed with usage of the smart card card, the logging of card usage and initiated operation . The accesibility of log files, the transfer of personal data to third parties, linking the database with other databases containing personal data and the integration of depersonalization of data into the processes are also privacy related issues.

These privacy issues need to be regulated correctly in the general terms and conditions accepted by the card holder(especially in the field if the proper notice and ensurement of authorization for the handling of personal data), on the other hand – as a result of the strict rules on handling of personal data– privacya issues have to be regulated between the actors of the card system in contract..


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