From: Information Security <guy@panix.com>
To: cypherpunks@toad.com
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UTC Datetime: 1998-02-02 17:25:00 UTC
Raw Date: Tue, 3 Feb 1998 01:25:00 +0800
From: Information Security <guy@panix.com>
Date: Tue, 3 Feb 1998 01:25:00 +0800
To: cypherpunks@toad.com
Subject: SmartCards in the news
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Also see: http://www.zdnet.com/pcweek/news/0112/12bio.html
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[ Features ]
February 02, 1998
Smart Cards Smarten the Net
By Albert Pang
For many contractors to the U.S. Department of Defense, the Internet
will become an important ally this year, helping them resolve one of
the most daunting challenges when doing business with the government:
Getting paid on time and with a minimal amount of hassle.
Thanks to a new breed of smart cards backed by sophisticated Web
applications, 200 defense contractors will start receiving electronic
checks (e-check) from the government via secure Internet e-mail
through a pilot program launched in January 1998.
The contractors will use their smart cards to access the mail box,
validate, and endorse the checks. They will then forward the checks to
BankBoston or NationsBank, the two authorized banks, that will deposit
them into their accounts.
The smart cards, which include digital certificates developed by GTE
Cybertrust, will play a critical role in helping the defense
department and other agencies comply with a mandate that requires most
of the 800 million payments the government makes every year be
converted to electronic form by January 1, 1999.
Because of the mandate, the number of smart-card applications in
different stages of development within the government has doubled to
more than 900 in the past year, says Jim Hagedorn, a spokesperson for
the Treasury Department.
That's good news for vendors such as Anthony Caputo, chairman of
Information Resource Engineering (IRE) in Baltimore, which develops
the smart cards and the readers for the e-check program.
"It will create a nice revenue stream," Caputo says, adding that his
company has issued 100,000 smart cards to government and corporate
customers mostly for use in private networks.
Now with the Internet, the smart card market could grow
substantially, especially in Asia and Europe. "Smart cards are the
ultimate personal network computers," capable of handling everything
from simple tasks such as identification to complex ones such as
online banking and electronic commerce, says Philip Yen, senior vice
president of chip platform at Visa International in Foster City, CA.
[TABLE NOT SHOWN]
Both Visa and its rival MasterCard are engaged in smart-card pilots
around the world, promoting the use of stored-valued chip cards that
run on private networks or the Internet.
For example, AT&T Universal Card is working with Mondex, the
electronic cash venture majority-owned by MasterCard, to sign up a
small number of online merchants for a pilot program that will allow
Internet users to buy products from them using smart cards issued by
AT&T.
However, analysts expect acceptance of smart cards in the United
States to be slower than that in other countries because of privacy
concerns, interoperability issues (Visa and MasterCard use different
operating systems, for example), and the desire to put as many complex
applications as possible on a single card.
Albert Pang is the online editor of the Internet Computing MagaSite
Send e-mail to apang@zd.com.
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