Take a look in your wallet and what do you find? In all likelihood, bills and coins. A variety of credit cards. A driver's license. A transit pass. A voter registration card. A library card. A video rental card. Insurance cards. Frequent flyer and car rental cards. A telephone charge card.
By the end of the century, all of these documents might be replaced by just two or three smartcards. Because they can store and protect relatively large amounts of data, smartcards are being used in a number of ways around the world, replacing a wallet's contents bit by bit. Stored-value cards were in place last year in Atlanta, Ga., at Olympic venues standing in for coins and bills. A health card identifying the holder's insurance provider and account number has been issued to every citizen of Germany, and plans are in place to add such medical information as the name of the holder's doctor, blood type, allergic reactions, medications, next of kin, and instructions in case of emergency. Smart social security cards in Spain interface with a kiosk system that can provide updated information on benefits and eligibility, as well as pertinent job opportunities.
Today, most smartcards handle a single application, but will realize their true value when a single card can address multiple applications. For example, a credit card could have a stored-value function for small purchases, in addition to frequent flyer and rental car information. It might work with a cellular phone to connect the user to a home banking service. One step toward this goal was last fall's announcement by VeriFone Inc., Redwood City, Calif., of a system called VeriSmart, which permits a smart phone or a PC to act as a "personal ATM" (automatic teller machine) in the home, loading cash value onto a smartcard
The smartcard will also be a tool for addressing the "customer of one": applications of special interest to the card holder will be loaded onto the card to make life easier. Eventually, people may customize generic cards themselves from a menu of applications. In a report on the smartcard industry, semiconductor industry analyst Dataquest Inc., San Jose, Calif., recently wrote, "Although some standards issues, infrastructure issues, and software issues remain to be resolved, chip cards hold the promise of being one of the world's highest-volume markets for semiconductors."
As a single card comes to hold more information and relates to more aspects of its holder's life, privacy concerns will have to be addressed. Note, however, that the information stored in a smartcard is usually already available in some format or another; the smartcard merely makes that information portable and puts it at the disposal of the card carrier.
The smartcard application that will be most popular in North America may involve a portable token--a card, a key, or some other familiar shape--for conducting transactions over the Internet, particularly for home shopping and home banking. How can such sensitive information as financial transaction data be safely communicated across a hacker's paradise like the Internet?
Advanced cryptographic functions will be required. Public key encryption (PKE) will be part of the solution in at least two ways [see "Locking the E-Safe"]. First, PKE (often a one-session key) will be used to encrypt data to be transferred with the receiver's public key. This data will be readable only by a receiver with the secret key. The second use will be for digital signatures: a piece of data encrypted by the sender's private key, proving that only the authorized sender could have sent a message or that it has not been modified. PKE capabilities using Smartcards provide for portability, cutting the tie to any specific computer, phone, or other "site."
These smartcard applications require the development of infrastructures that are global, interoperable, easy to update, and capable of supporting several applications concurrently. The Dataquest report on the smartcard market indicated that 156 million smartcard microcontroller devices would be shipped in 1996, increasing to 990 million in the year 2000. Suppliers of smartcard silicon include Motorola, SGS-Thomson, Philips, Siemens, and Hitachi.