Grippo said the switch to smart cards will happen over the next 18 months. Paying recruits poses payroll problems for all three services because the recruits usually do not have local bank accounts, he said. NationsBank Corp. of Charlotte, N.C., the project's financial contractor, expects to issue about 40,000 of the cards per year. Given the option of using a smart card or paying cash for purchases, consumers generally use cash, Grippo said. But if the smart card is mandated in a closed environment such as a military base, it will work as a cash alternative, he said.
Smart cards are worth implementing to solve a specific problem.
The military wants to get rid of paper payrolls for recruits. Most military personnel receive their pay as direct deposits from the Treasury Department. But because recruits stay at training locations for short periods, they usually don't set up direct-deposit accounts, Grippo said. Too unwieldy Cash, money orders, vouchers, checks and military scrip are too cumbersome and expensive, he said. The recruits can download their pay to Lackland's smart cards and make purchases on base.