The Smartcard Invasion

Smartcards, ubiquitous in Europe, are set to hit the United States at last.

Udo Flohr

It's 1977. The French banking association, Cartes Bancaires, is looking for a way to combat huge losses through fraud. Using relatively simple equipment, criminals are reading data from magnetic stripes and copying it onto counterfeit cards. Working with French computer company Bull, Motorola Semiconductor designs the first smartcard microchip. Once the infrastructure is in place to replace magnetic-stripe cards, card fraud drops tenfold.

The four basic components of a smartcard are the controller chip, its packaging (called a module), software, and the card itself. Cards exchange data through a rea der or, with the newer contactless variety, from a distance via a built-in miniaturized radio modem.

Smartcards can encrypt the data contained within them and generate digital signatures. For this, every smartcard has a unique key that it never reveals. The speed of the cryptography module is essential here: For acceptable transaction times, chips need to perform 1024-bit RSA sign functions in around 500 milliseconds, using a dedicated hardware cryptoprocessing module.

Smartcards have rapidly increased in sophistication and capabilities. Most smartcards today contain an 8-bit microprocessor, which makes them almost as powerful as the personal computers of the 1980s. ("Dumb" memory cards, often used in Europe as telephone cards, are not true smartcards because they can't process information or provide multiapplication facilities. But they can hold much more data than magnetic-stripe cards.)

A Motorola microcontroller, the MSC0406, is at the heart of the Vis a Stored Value Card program, which began in October in Manhattan. The MSC0406 offers 1KB of EEPROM, 9KB of ROM, and 240 bytes of RAM and sells for $1.49 each in 100,000-unit lots. (The actual cards are manufactured by Schlumberger and others.) This first major U.S. smartcard cash trial -- after the less-than-successful project at the Atlanta Olympics -- may finally wake up the U.S. smartcard market.

In 1998, two technological trends will help consolidate the market. One is contactless cards. (These are useful as "commuter cards": Toll booths can deduct funds while motorists drive through, and public-transport systems can collect fares according to the distance passengers travel.) Such cards have been slow to appear on the market because of the technical challenges in supplying sufficient power to the microcontroller from an RF signal. (For contact cards, the reader supplies the power.)

The second trend is standardization. For some time, the industry has be en chasing the idea of the "white card," which would allow consumers to buy a card and load it with applications according to their individual needs.

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Where to Find

The Smart Card Forum:


 
http://www.smartcrd.com/
 



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What Is the Biggest Hurdle Facing Smartcards?

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The hurdles hindering smartcard success are more psychological than technological.

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The Smart Card Forum in 1998

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AT A GLANCE: Smartcards -- credit-card-size, but with a chip that protects the personal or financial data within -- are all over Europe; the U.S. market is expected to take off this year.

WHO SUPPORTS IT: The Smart Card Forum has over 200 members, including Gemplus, Microsoft, and Schlumberger. The Aladdin Smartcard Environment ( http://www.aks.com/ ) is a well-known development platform.