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Smarter Cards

The potential of the smart card to handle many different applications has revived hopes for making the technology as commonplace in the United States as it is becoming overseas. Advances in the technology itself are driving the possibilities in the marketplace. Three years ago smart cards boasted the processing power of a 1980 Apple II computer; today’s versions are approaching the level of a 386-class PC, circa 1990. Most smart cards can hold 32 kilobytes of data, and their embedded microprocessors can execute simple application programs stored in 64 kilobytes of flash memory.

That’s enough computing power to run multiple payment, customer loyalty, health-care, and security applications on a single card. “It is essentially a PC without the keyboard or display,” says Neville Pattinson, director of business development for New York Citybased SchlumbergerSema, a top maker of microprocessor cards. The cost has dropped below $5 apiece for quantities of thousands, and smart cards with the power of a Pentium-class PC are within reach this decade, he says.

Perhaps the biggest push for smart cards is coming from large organizations that want them for their employees. In one of the largest smart-card rollouts under way, the U.S. Department of Defense is issuing a Common Access Card to every member of the armed services. Each card includes a photograph and a microchip that authenticates identity whenever the card holder enters an agency facility or logs onto its computer network. The card will also encrypt and decode employees’ e-mail. More than a million of these cards have been deployed, and the department plans to issue the cards to all its 3.5 million officers, service members, and civilian employees within the next year.

Prompted in part by the security concerns that crystallized after September 11, other government agencies are following suit. The Aviation and Transportation Security Act and other recent legislation mandate that the Department of Transportation, the Border Patrol, and other agencies investigate a universal worker-identification device that would hold biometric data such as fingerprints and digital “faceprints.” The devices would be automatically monitored at checkpoints or spot-checked by roving security officials. Workers may need the cards to log onto agency and airport computer networks, as well as to gain physical entry into facilities. “Post-September 11, there are secure-identification projects going on all around the world,” says Ed MacBeth, senior vice president of marketing at ActivCard, a Fremont, CA, company that is supplying software for the Defense Department’s card. “The card has to be smart enough to identify the user,” MacBeth says. “It’s no longer good enough just to flash a photo ID.”

Although government agencies are rolling out the largest number of cards, the technology is turning up at major corporations, as well as college campuses and other large institutions. Hewlett-Packard, Microsoft, and Sun Microsystems are all issuing cards to tens of thousands of employees for building access and for logging into their corporate computer networks. Some employers are enhancing cards with such applications as electronic-cash accounts that can be used at their company cafeterias. Managing the cards is getting so complicated that companies are contracting the work out to banks.

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