denmark to launch first country-wide · pdf fileservice providers are collected and forwarded...

©1992 Smart Card News Ltd., Brighton, England. No part of this publication may be reproduced, stored ina retrieval system, or transmitted in any form or by any means, electronic, mechanical, optical,recording or otherwise, without the prior permission of the publishers.

Denmark to Launch FirstCountry-wide SchemeDenmark will be the first country in the world to adoptSmart Cards nation-wide when it's Danmont (Dancoin inEnglish) project - currently under trial - is launched inMarch next year.

In the trial town of Naestved, 70 kilometres south ofCopenhagen, some 54 card sales outlets have been organisedand Smart Card holders among the 45,000 residents can usethem to make calls from 20 card payphones, pay for journeyson buses, use them in laundries, buy drinks and snacks fromvending machines - and use one of Naestved's two parkingmeters!

The scheme has attracted attention from observers all overthe world, and many are asking the same question: Can thisrelatively small country, with a population of just overfive million, succeed in such a massive and costlyundertaking? This is a particularly pertinent issue whenthe scheme is aiming at very small transactions of between3Kr and 7Kr.

Continued on page 3

Smart Card News

Editor: Jack Smith

Technical Advisor: Dr David B Everett

Editorial Consultants:

Dr Donald W Davies, CBE FRSIndependent Security Consultant

Peter Hawkes,Principal ExecutiveElectronics & Information TechnologyDivisionBritish Technology Group Ltd

Chris JarmanManaging DirectorOrga Card Systems (UK) Ltd

Published monthly by:

Smart Card News LtdPO Box 1383, RottingdeanBrighton, BN2 8WX, EnglandTel: +44-(0)273-302503Fax: +44-(0)273-300991

ISSN: 0967-196X

Next Month

Smart Card Tutorial Part 3 - PhysicalCharacteristics of the Contact Card.

An update on GSM.

CONTENTS

NEWS

Bull Calls for Harmonisation25

Campus Management System 25

Who will accept this scheme ?26

Banks still "testing the water"28

JerseyCard Launches Cash Purse 29

TECHNICAL BRIEFINGS

NIST Advanced Smart Card Access Control System (ASACS) 31

Smart Card Tutorial - Part 2How the IC Card is Made 33

Smart Card Diary 38

A smart way to travel 38

Gemplus offering public key 39

Electronic toll collection 40

Smart Card News October 1992

24 ©1992 Smart Card News Ltd

Danish Smart Card Scheme

Continued from page 1

The Danmont system consists of the Danmontcards (at present non-rechargeable cardswhich will later be superseded with multi-function Smart Cards), a network of servicepayment terminals, several concentrationpoints where transactions from differentservice providers are collected andforwarded to the single clearing system. Itis interesting in the Danish system that thetransactions will be posted as a total andnot individually.

So far 20 service providers have issuedcards for the test trial, including the topsix Danish banks -Den Danske Bank, Unibank,Bikuben, Jyske Bank, GiroBank, andArbejdernes Landsbank, the two local banksHaandvaerkerbanken A/S and NaestvedDiskontobank, and the Copenhagen TelephoneCompany (KTAS).

The cards are being supplied by Danish cardsuppliers dz danmark Ltd and ID Kort Ltd witha Siemens SLE 4404 M2 416 bit chip. Servicepayment terminals authenticate the cardsusing a Secure Application Module (SAM)which is implemented as a single chipmicroprocessor card. The SAM program isbased on a Hitachi H8 chip, and the Germancompany, Giesecke & Devrient/GAO hasdeveloped an operating system calledSTARCOS with, among others, the blockprotocol T=1 and an encryption system basedon the DES algorithm. The Hitachi H8 chip isconfigurated with an 8 Kbyte EEPROM, 10Kbyte ROM and 256 byte RAM. The processor is8 bit.

Implementation

The implementation of the DANMONT system isplanned to take place in five phases.

1. test of the system in the town of Naestved(started 1 September)2. nation-wide expansion from 1 March 1993.3. introduction of a rechargeable, prepaidcard from 1 April, 19944. introduction of a multi-function cardwith limited functionality, and

5. extending the multi-function card usingthe full functionality.

Significant features

There are three particularly significantfeatures about the scheme:

* Danmont is securely based on full co-operation between the banks andtelecommunications industries.

* The Danes have decided on an "opensystem" with one "system operator."

* The implementation is taking place infive distinct stages with successviewed in the long term.

In June 1991, KTAS (Copenhagen TelephoneCompany Ltd) on behalf of all the Danishtelephone companies, and PBS (DanishPayment Systems Ltd), on behalf of theDanish banks and savings banks, set upDanmont A/S for the purpose of introducing aprepaid plastic card based on IC cardtechnology to be used for the payment ofsmall amounts, with the ultimate intentionof upgrading the card to a microprocessor-based card suitable for use as a multi-function card.

There is no doubt that the strength of thescheme lies in the fact that the financialand telecommunications industries - two ofthe biggest potential users of Smart Cardtechnology - have joined forces to implementthe scheme.

Thus, instead of fighting over who gets theicing on the cake, each party has apredetermined share in a unique arrangementwhich could provide a role model for othercountries.

Henning Jensen, Managing Director ofDanmont, says: "If you cannot co-operate youcannot get low cost. So even the biggest bankand the smallest savings bank aretheoretically having the same unit cost inDenmark on their payments. because you arenot killing your competitor on paymentsystems."

October 1992 Smart Card News

©1992 Smart Card News Ltd 25

Open system Mr Jensen said: "Whenever a card is sold we

Danmont admits that its "Open System"concept demands large initial investments,and has a longer development and penetrationtime than closed systems. But what is uniqueabout the Danish system is the decision toestablish a single "system operator" and asingle clearing centre, giving completeindependence between the card issuers andthe service providers. This makes itpossible to be a service provider withoutalso being a card issuer at the same time,enabling small merchants to obtain access tothe system.

Danmont has also made strenuous efforts inall stages of the project design to keepcosts down. On the card side, for example,the card issuer pays for the card himself butDanmont has advised on the opportunities tosell both sides of the card for corporate orp r o m o t i o n a l a d v e r t i s i n g , t h u ssubstantially reducing or removing cardcosts. In fact one of the banks involved isnow planning to issue three new series ofcards.

Since the start of the project Danmont hassaid that the cost of the card acceptingdevice had to be between 3,000Kr and 5,000 Krand now they can be bought from threedifferent suppliers today in this pricerange.

While there is an additional cost to theservice provider for integrating the deviceinto the various machines, such as telephoneor vending machines, this is a one-timeoutlay. The cost of the device is about thesame as for a coin handler but with theadvantage of removing vandalism which costsbetween 5 and 10 times the amount of cashstolen.

Long term success

The owners of Danmont have allocated £8million to finance the scheme. Income willconsist of interest on the money floatingaround in the system (the float), theremaining value left on unused pre-paidcards which Danmont conservativelyestimates at one per cent of the turnover,plus the clearing charges on collections.

get the money so the bank, for example, getsneither the settlement nor the float andnone of your readers in banking willunderstand why the banks are doing thisbecause they are not used to co-operating.In Denmark the banks are saying okay if ourcontribution is that the float is paying theDanmont we don't mind because we own half thecompany. Service providers like CopenhagenTelephone, for example, is saying maybe wewill have to pay for the transactions, maybewe will even have to pay more than we believebut if that is our price to get moving with auniform card all over the country then we ownhalf the company. The question about pricesand float and so on is diminished because youare a shareholder. There are many people whodo not understand this. They are verynarrowly looking at 'what is my bank'sinterest'. Doing that no system can everwork."

Looking ahead to the introduction of themulti-application card, he says the prepaidis only one application and Danmont is notmaking the multi-application card, and isnot pushing any other application to themulti-function card.

If prepayment is only one of theapplications for the multi-functional card,what are the others likely to be? Strongpossibilities are GSM as one of the GSMoperations in Denmark is owned by thetelecoms, pay-tv in which telecoms are alsodeeply involved, home banking and newproducts to the banking and financeindustry.

It is envisaged that a new company will runthe multi-function card and that Danmontwill be a partner. Mr Jensen said: "We aresecuring our own application to be ready forthe multi-application card because it is animportant application.

"More and more international observers whoare talking to us," said Mr Jensen, "can seethat if you ever want to get into this youhave to find ways of co-operation, maybe notas complete as Danmont but at least there hasto be co-operation between the major partiesbehind the card because if a bank issues it orthe banking industry they will not succeed.



If public transportation do it they will notsucceed - only in their own sector. But byhaving everybody selling the same basic cardthey are gaining more than they are losing onco-operation.

"It is difficult in big countries but I knowthere are people saying it must bepossible."

Robin Townend, Research Manager at BarclaysBank, UK, who was one of the observersvisiting Naestved to see the trial inaction, comments: "If they don't do itnobody else will."



NEWS

Bull Calls for Harmonisation

Europe, and particularly France, held thelead in the field of card operating systems,but they had to be wary of potential productswhich were appearing, in particular fromJapan warned David Stephenson, Director,International Operations and BusinessDevelopment, Bull CP8.

He told delegates at ESCAT (the EuropeanSmart Card Applications & Technology)conference in Finland last month that hebelieved that Europe still had a significantlead both technically and conceptually withregard to the security features in the chipand in the operating system. The Japanese Scard used a non-standard block protocol(T=14) and most likely a Japanese algorithm(FEAL). The S card would not bring anythingnew either to the marketplace, or to thenumerous customers who used cards such asTB100 today.

The TB100 card was the result of a jointproject between Bull CP8 and TRT-Philips,aimed at producing a multi-serviceprovider/multi-applications Europeanoperating system which met ISO standards.

"This object was achieved, and I believethat it is not too late for the European cardmanufacturers to rally around an operatingsystem such as TB100 which meets the ISOstandards, rather than dispersing ourefforts and resources to develop additionalnew general purpose operating systems," hesaid.

He added that standards could be used in apositive way to accelerate market growth,but they could also be manipulated in such away as to stifle and retard the developmentof a technology and its market.

When correctly developed, standards servedto reassure future users of the technology.However standards could have a seriouseffect in slowing down the development of anew technology and its related applications"when the industrial companies of onecountry or another believe that it is

justified to change perfectly adequate andestablished standards simply to furthertheir own interests."

"With the benefit of hindsight, one cannotfind any other reasons for past conflicts inthe IC card industry in determiningstandards, or the appearance of newstandards to cohabit with, and standalongside perfectly adequate existing ones.

"This has been demonstrated in the past bythe adoption the block protocol, spurredonly by national interests and the interestsof one or two individual companies, as analternative ISO standard, but whichprovides no distinct advantage for 95 percent of card applications, whilst requiringincreased, and consequently more costly,resources."

One could always find more than one way toskin a cat, he said, but he was disappointedthat a united European approach could not befound to the card protocol question, so as todefend the interests of both customerscurrently using IC card applications andtechnology, and the interests of theEuropean industry in general.

Campus Management System

DataCard Corporation is to start marketinga new Smart Card-based All-in-ONE-CardCampus Management System to colleges anduniversities. Designed to meet the demandfor a single student ID card which can be usedfor identification, transaction processingand access control applications, the systemwill be available for installation in thesummer of 1993. Students will only need to have one cardcarrying their identity and allowing them toaccess food services, debit tuition andbookstore accounts, and make conveniencestore and off-campus retail purchases andsmall value transactions such as at vendingmachines, laundries and copy machines.DataCard says the security featureseliminate the potential for fraudulent useor duplication and safeguard the student'sprepaid accounts while minimising theschool's exposure.



David Tushie, President and GeneralManager, Smart Cards and Systems Division,says the All-in-ONE -Card Campus ManagementSystem is positioned for use by a larger non-campus constituency.

Contact: Mark Iverson, Director, Marketing,DataCard Corporation. Tel: +1 612 931 1763.



Who Will Accept This Scheme?

Cambridge, one of the most attractive citiesin England and known all over the world forits famous university, may have its trafficproblems eased in a revolutionary Smart Cardscheme scheduled to begin testing next year.

However, the electronic congestion meteringsystem planned for the city is likely toexasperate vehicle owners, particularlyresident drivers, and turn tourists away.

A charge will be levied on drivers for a unitof congested road, a unit being .5 km or onethird of a mile. Three basic elements oftime, distance and inertia have beencombined to trigger payment above athreshold.

The system will target congested conditionsonly and if applied at 20p per unit it wouldincrease the marginal cost of motoring incongested conditions from 6p per mile(petrol costs) to 66p (60p congestion plus6p petrol). This increases the marginalcost in congested conditions by a factor of10 whilst leaving the costs unchanged in allother conditions.

The threshold has been provisionally set atfour stops within any half km, oralternatively when the time taken to travelany half km is above three minutes.

State-of-the-art

Technically this is a clever scheme usingadvanced state-of-the-art technology, butif drivers feel they are going to bepenalised every time they are caught up in atraffic jam or fail to cover a predetermineddistance within a certain time, some may betempted to speed when they have theopportunity, jump traffic lights andpedestrian crossings and fail to give way atroundabouts.

If the result is an increase in road trafficaccidents, the Council will have to thinkagain about the plans.

So far reactions from residents have beenmuted, but as one prominent opinion former

commented: "This scheme is so bizarre thatpeople have not bothered reacting. Theythink it is so crazy that it will neverhappen."

Prepaid Smart Card

The method of payment is by a prepaid SmartCard which will contain a certain number ofunits, say 50, and would be purchased for £10if the price per unit is 20p.

However, a-self policing control mechanismis needed, and this will be in the form of ameter installed in vehicles. The Smart Cardwill energise the car when inserted, and de-energise it when removed. An "overdraft"will be allowed, say 50 units, at which pointthe card must be recharged and the overdraftpaid off before the onboard unit will acceptthe card for the next journey.

The City will be controlled by beacons on all17 radial roads which will "switch on" thein-car meter by microwave. All journeysmade in the City will be metered and switchedoff again on exit.

The County Council says that meteredvehicles will form the vast majority of allvehicles entering the City, especially atpeak hours.

Non-metered, non-regular users such asbusiness callers, visitors and tourists,will have to pay to enter the City by car. Itis envisaged that all visitors entering byvehicle will purchase a daily pass atautomatic machines at City entrances.

A research grant awarded in 1990 by theScience and Education Research Council to aconsortium, including Newcastle Universityand Newcastle Polytechnic, has enabled alaboratory prototype meter to be produced,and as part of the ADEPT (Automatic Debitingand Electronic Payment for Transport)consortium under the DRIVE project of theEuropean Commission, sufficient resource isavailable to allow a miniaturised onboardunit to be produced. This is expected to beavailable in the summer of 1993 fordemonstration including the microwavebeacon technology and the Smart Card



application. Contact: Robert Tuckwell, Project leader

Field trials

Cambridgeshire County Council propose tocarry out full field trials on at least 100vehicles starting in 1993. This will givethem the opportunity to evaluate their time,distance and inertia formula and decide howit stacks up in practise against trafficlights, pedestrian crossings, roundabouts,and road works.

However, before full implementation of thescheme in 1995, the Council will requirelegislation to charge for the use of certainroads by congestion metering, and to givethe Council powers to insert meters free ofcharge to all vehicles owned by residents orcompanies within a designated area.

It is estimated that some 250,000 vehiclesin a 15-mile radius of Cambridge, and in theCity itself, will be equipped with themeters.

The County Council is funding research intothe scheme and has allocated £100,000 fortwo years, and hope to attract contributionsfrom unnamed other sources.

The Cambridge congestion metering scheme isone of five field trials within the ADEPTproject. The other pilot sites and trialsare:

Trondheim, Norway Integrated payment andm u l t i - t r a n s p o n d e rservices

Lisbon, Portugal Parking pre-booking,guidance and debiting

West Sweden Multi-lane road usepricing and integratedRTI (Road TrafficInformatics) services

Greece Multi-lane and mono-lane automatic tollcollection and driverinformation (MalagraHighway).

and Group Engineer for CambridgeTransportation Planning. Tel: +44-(0)223317724.

McCorquodale agreement

Siemens has signed a long-term agreementwith McCorquodale Smart Card Systems tolicense its Smart Card operating systemsoftware for distribution throughout theworld, including former Eastern Bloccountries.

McCorquodale said that the two companieswere working together to develop new chiptechnologies specifically for Smart Carduse. An integral part of the contract is anew microcontroller line designed bySiemens, using submicron CMOS technologyand fast encryption techniques for chip cardapplications.

Doscar Smart Card Security

Doscar, an MS-DOS device driver for OKIstandard Smart Cards using the OSCARoperating system, and providing 8Kb ofsecure memory (16Kb cards are planned forthe end of this year) has been announced bySmart Card Solutions.

The user can treat the Smart Card as justanother floppy disk. It can be used tocontrol and monitor the use of a range ofproducts and services, protect data filesfrom unauthorised users, and hold data whichneeds to be both portable and safe, forexample, financial transactions, medicalrecords or company confidential files. TheDoscar cards are read by a reader unit whichfits into the PC like a conventional diskdrive.

Contact: Owen McLaughlin, Director, SmartCard Solutions Ltd, 71 High Street, Earith,Huntingdon, Cambridgeshire, PE17 3PP,England. Tel: +44-(0)487 740865.

SWIFT Smart Card

Further details are now available on the newSWIFT (Society for Worldwide Interbank



Financial Telecommunications) Smart Card tobe mandatory for Electronic Funds Transfermessages by financial institutions from thefirst quarter of 1994.

Called USE (Users Security Enhancement) thesystem goes to pilot testing in mid-1993.The card being used is the Bull CP8 standardISO ID1 with a Motorola chip, 4Kbytes of MaskROM, 8Kbytes of EPROM, and 128 bytes of RAM.The communication protocol is T=0, andsecurity is provided by a six-digit PIN anda proprietary crypto algorithm. The carddesign is shown on page 21 without the chip

embedded in the plastic. Banks still"testing the water"

The UK banks have been experimenting withSmart Cards for a number of years now in whathas amounted to "testing the water," but sofar they seem reluctant to commit themselvesto what many regard as the inevitableadoption of Smart Card technology.

The dilemma of the banks is that there is nostraightforward business case to replacetheir existing card systems based onmagnetic stripe cards, and they recoil fromthe massive expenditure involved inattempting to substitute another system. Atthe same time they desperately seek newbusiness in the fiercely competitivefinancial markets and view with mountingconcern the aggressive activity of theEuropean PTTs who appear to be driving theuse of Smart Cards (albeit small memorycards at the moment, but with the potentialto expand into multiple applications andscoop up business at the expense of thebanks).

Banks in general tend to cater for the needsof the As, Bs and Cs of the world, but thereare many, many thousands of people who do nothave bank accounts and to whom an"electronic purse" type of card would beattractive. While the banks have managedvery well without this business they must beanxious that the multi-million poundcollective spend of this group could beattracted to some new money handling systemwhich could make inroads into their ownbusiness.

Banking dilemma

The ESCAT (European Smart Card Applications& Technology) Conference in Helsinki,Finland, last month gave an interestinginsight of the banking dilemma and themomentum of telecommunications activity inSmart Cards.

Roger Alexander, Assistant Director ofBarclays Bank Central Retail ServicesDivision in England, said that in-housestudies at Barclays in the mid-eightiesformed some basic conclusions about SmartCard technology that still held good today -that current magnetic stripe technology had(and still did have) security and datastorage capacity limitations, thatinternational standardisation would berequired to ensure interoperability, thatSmart Cards were expensive, that migrationwould take a long time in view of the existinginvestments in magnetic stripe cards.

However, the Smart Card offered a high levelof security both in terms of authenticatingthe card and verifying the cardholder, itcould support multiple applications, and itcould function securely off-line providingsavings on communications costs.

"Importantly," he said, "the technology wasfirmly recognised as that which wouldultimately become the next generation offinancial transaction card."

Costs of the Smart Card, littleinteroperability and the lack ofinternational standardisation had been theprinciple arguments why financialinstitutions, outside France at least, hadnot embraced the technology. To a limitedextent this was still true today,particularly if viewed as a magnetic stripedcard replacement.

No cost justification

"Put simply," said Mr Alexander, "todaythere is no cost justification, noinfrastructure and standards are stillbeing developed, a situation that has notchanged since the early 80s. This does notmean, however, that there is no place for the



Smart Card in retail banking. On the cashless parking, vending, fast food, andcontrary, the card business is very frequent shopper programmes.competitive, in the UK alone we have over 100different Visa and MasterCard products. What had been described, he said, was aSo, how can card issuers differentiate their typical bank card with an embedded chipproducts? How can card issuers ensure that giving access to a range of Value Addedtheir card is the preferred card and the one Services from which the cardholder couldwhich is taken from the wallet or handbag at select those most relevant to theirthe Point-of-Sale? lifestyle. With this concept the primary

"What the chip can offer over and above the card, with the logo and features relating tomagnetic stripe is the provision of Value the issuer and payment system. Some servicesAdded Services, and these can be the could be provided free to the cardholder,differentiators. Ideally, they should be for example, frequent shopper where thefee-based to offset the incremental cost of supermarket or oil company would pay theadding the chip and for generating new card issuer a rent for the space on theirincome streams. The card would therefore be chip, or would be fee based as in the case ofa hybrid card, the magnetic stripe would the medical applications.manage the payment functions and the chipwould offer new and valuable services forthe cardholder. Ultimately, I see the chipmanaging the electronic payment functionsbut only when there is a critical mass ofhybrid terminals in the market place.

"The successful implementation of thisconcept in retail banking applications isthe dependence upon selecting the rightValue Added Services!"

The most promising Value Added Services mustbe those that had universal appeal to ensuresubstantial market penetration therebyhelping establish the critical mass ofterminals to assist migration for paymentsystem applications.

There were several case studies such as theFrench Banks offering payphone services.Public payphones were currently the mostpopular Value Added Service but othertelecommunications applications were underdevelopment, most notably videotextservices. Global System for MobileCommunications (GSM) and PersonalCommunications Network (PCN) - the nextgeneration of mobile communications whichwould be Smart Card driven. All thisindicated the growing importance andinfluence of the telecommunicationsoperators in the market development of SmartCards.

Other Value Added Services includedmotoring services, health care, travel,

function of the card remained a payment

Telephone based applications

Jerome Svigals, Inc., USA, had someinteresting figures to give to conferencedelegates. PTT national levelorganisations headed the list of largevolume Smart Card orders during the pastyear with 21 orders compared with 5 ordersfor national/social programs. In terms ofvolume, France had ordered 155 million cardsfor telecom coin replacement, and Germany 70million.



JerseyCard Launches Purse

JerseyCard, the IC Card system on the self-governing duty free island of Jersey in theEnglish Channel, is expanding its serviceswith the launch this month of a pre-paymentcash purse facility. It has also extendedits services to the neighbouring island ofGuernsey where they will be marketed underthe name "GuernseyCard." And as the interestin Smart Card technology gathers momentum,the company is also busy offering itsexperience to others who want to use theirsystem.

Since its inauguration in 1987, it has beenbuilding its customer base and card readerinfrastructure. Currently around 20,000cards have been issued in Jersey (population85,000) and some 190 card readers have beeninstalled in merchant sites. About onethird of the readers accept the JerseyCardfor a specific facility including chargeaccounts at a major department store, awines and spirits retail chain, a group ofgarages, and also as a membership accesssystem to the local leisure centre.

This month, JerseyCard Ltd launches theJerseyCard Cash Purse - a pre-payment systemuseable at selected merchant sites as ageneral means of payment. The multi-function card is capable of offering 23different services so there is no need toissue a new card. Customers who want to usethe cash purse facility will pay a £5administration fee which is a one timepayment. For all other purposes the cardwill continue to be issued free tocustomers.

The cash purse will be initialised at theJerseyCard offices or at one of two otherapproved points. Cardholders will be ableto go to any service provider to have the cardrecharged by handing over cash or using anydebit card. The cards will be used initiallyin a department store, a garage group, anewspaper and gift shop chain and at certainpublic houses.

They will be available to two groups ofcardholders - residents holding a card forone of the above purposes and, by

arrangement with a French companyorganising conferences on the island,visiting delegates who will be issued withthe pre-loaded cards which they can purchaseprior to arrival and use to buy duty freegifts.

In Guernsey, where the system is beingoffered as a "department" of JerseyCard, theGuernseyCard is being used initially with agarage chain but will soon include threeother garages and a large store. This saysJerseyCard Ltd, opens the door for anyretail chain operating in both islands touse the system.

Chris Parlett, Executive Manager,JerseyCard, said: "We are also talking tothe airline and the hydrofoil company whooperate inter-island services."

The first card using the JerseyCard systemhas just been launched in Scotland inconjunction with JerseyCard, with anotherdue soon in the South of England.Lanarkshire Card Ltd are planning toduplicate the JerseyCard operation in partof the Strathclyde area of Scotland southeast of Glasgow and covering Motherwell,Hamilton, East Kilbride, Coatbridge, andAirdrie.

As in the JerseyCard system, the scheme isbeing financed by private investment. DaveMather, of Lanarkshire Card, says: "Weintend to duplicate the JerseyCardoperation in Lanarkshire area and are nowseeking customers. The response so far isquite good." The clearing of thetransactions, he said, would be through theBank of Scotland.

Another success for JerseyCard is that oneof the largest UK Training and Enterprise



Councils based in the Midlands of England,has recently agreed to use the JerseyCardand data collection system in a pilot totrack the progress of people going through atraining programme in their area. As aresult, JerseyCard are now in discussionwith several other TECs with a view toproviding a training credits system. A major UK tyre and garage chain has recentlyexpressed interest in the JerseyCard systemand they continue to entertain a stream ofvisitors from all over the world.

Mr Parlett said: "JerseyCard will continueto offer our system in other parts of thecountry and in other countries."

In the Jersey scheme the IC Card readerterminals also read credit and debit cards.The IC Card can be used as an account card, amembership card or an electronic purse andthe cardholder can have several differentservices on his card which is used inconjunction with a Personal IdentificationNumber (PIN).

Service providers pay JerseyCard a rentalfor taking space on their chip. The serviceproviders process their transactionsthrough Barclays Merchant Services "onpreferential terms" and as a result Barclayshas substantially increased its marketshare of the acquiring business on theisland.

Card details

Type: ContactFabricator: GemplusDimensions: ISO ID1 sizeContact location: ISO 7816-2 FrontChip manufacturer: SGS-ThomsonChip Ref No.: GPM416Chip type: MemoryMemory type: EEPROMStandards: ISO 7816Comms protocol: T1Security: PIN (four digit)Cryptography: DES (Terminal

only) Contact: Chris Parlett, Executive Manager,JerseyCard Ltd Tel: +44-(0)534 37713.



The NIST Advanced Smart CardAccess Control System (ASACS)

The security technology group of NIST (USNational Institute of Standards &Technology) has designed an advancedcomputer access control system in responseto the needs for a secure yet easy to useauthentication scheme. The smart card andrelated terminals (called smart drives)have been developed by Datakey Inc. incollaboration with NIST.

The scheme is recommended for use in USGovernment Internet systems (ASACS is beingintegrated by Trusted Information SystemsInc. - TIS) as well as in banking networks andother networks which must restrict access tosensitive but unclassified data. Thisproject was sponsored by the US DefenceAdvanced Research Project Agency (DARPA).

ASACS is the third in a series of NISTresearch projects which involve the designand development of smart cards withcryptographic capabilities and theapplication of such cards to problems incomputer security.

A key feature of the ASACS smart card is itscryptographic capability which offers thefollowing algorithms,

- RSA- DSA (Proposed NIST digital

signature algorithm, seeappendix)

- DES

This is probably the first implementation ofthe proposed new DSA algorithm on a smartcard. The IC chip is the Hitachi H8/310 usinga 10mhz clock. The cryptographicperformance is shown in the table below,

Algorithm DSA RSA

Global Computation off card N/A

Key Generation 29 seconds off card

Pre-computation 28 seconds N/A

Signature creation 0.05 seconds 25 seconds

Signature 56 seconds 5 secondsverification

The card contains the following public key to ISO 7816-3 the next generation NIST cardcommand set, will conform using the T=0 communications

- Generate keys (DSA) size with the connector on the front of the- Load private key (RSA) card.- Load public key- Encipher (RSA)- Decipher (RSA)- Pre signature computation (DSA)- Signature creation (DSS)- Signature verification (DSS)

The Hitachi H8/310 has 10K bytes of mask ROM,8K bytes of EEPROM and 256 bytes of RAM.Although the current card does not conform

protocol. The card is of standard ISO ID-1



The ASACS card implements the following set algorithm was announced by NIST in Augustof cryptographic functions, 1991 and was published for public comment.

- Secure user authentication (3 way the discrete logarithm problem which is noencrypted handshake) less than the difficulty of factorisation.- Generates message authentication The algorithm contains the following globalcodes (MAC) computations,- Low speed file and lineencipherment p = 2 < p < 2 where p is prime- Support for ANSI X9.17 automatedkey distribution q = 2 < q < 2 where q is a prime- Support for applications using divisor of p-1portable reader/writer- Secure data storage for g = h Mod p where 0 < h < p suchcryptographic keys and user that g > 1 (i.e g = 1 Mod p )passwords- Secure data storage for audit trail p, q and g are global constants for ainformation particular security scheme.- Random number generation- Public key digital signature Key calculationcapability (DSS and RSA)- PIN verification

Datakey Inc. has developed a product linethat consists of the signature card and tworeaders. The model 10 desktop smart cardreader/writer connects to the users workstation using an RS232 serial interface. Theterminal supports card based userauthentication for both local and wide areanetwork log on.

The model 20 portable smart drive includes akeyboard and display as well as the standardRS232 serial interface. This unit isdesigned for users who travel betweendifferent work sites.

The ASACS card and desktop reader/writersystem is available from Datakey Inc. insmall quantities for $150:00

Contacts:

James Dray - ASACS Project leader NISTSecurity Group. Tel: USA. 301-975-3356

Gary Ostrem - Datakey. Tel: USA. 612-890-6850

Appendix - The NIST Proposed DigitalSignature Standard (DSS)

The DSS algorithm is in many ways similar toSchnorrs signature scheme. The DSS

The security of the DSA algorithm is based on

511 512

159 160

(p-1)/q

q

A users public and private keys arecalculated as follows,

Private key x = an integer such that 0 < x < qPublic key y = g Mod px

Signature computation

The user calculates a signature on a messagedigest m as follows,

Choose k to be a random number 0 <k < qCalculate r = (g Mod p) Mod qk

Calculate s = k (m + xr) Mod q-1

The signature consists of r and s each of 20bytes. Signature verification

The checker verifies the signature asfollows,

Compute w = s Mod q-1

u1 = mw Mod qu2 = rw Mod q

Calculate v = ((g * y ) Mod p)u1 u2

Mod q



If v = r as received then the signature isverified.



Smart Card Tutorial - Part 2

How the IC card is made

The manufacture of a smart card involves alarge number of processes of which theembedding of the chip into the plastic cardis key in achieving an overall qualityproduct. This latter process is usuallyreferred to as card fabrication. The wholeoperation starts with the applicationrequirements specification. From therequirements individual specifications canbe prepared for the chip, card, mask ROMsoftware and the application software. TheROM software is provided to thesemiconductor supplier who manufactures thechips. The card fabricator embeds the chipin the plastic card. It is also quite normalfor the fabricator to load the applicationsoftware and personalisation data. Securityis a fundamental aspect in the manufactureof a smart card and is intrinsic to the totalprocess. However we will consider securityseparately in subsequent articles in thisseries. We will look at each of the stages inthe manufacture of the smart card as shown infig. 1.

Chip specification

There are a number of factors to be decided inthe specification of the integrated circuitfor the smart card. For the purpose of thisdiscussion we will consider a CPU based cardalthough the manufacture of a memory card issubstantially a subset of that describedhere. The key parameters for the chipspecification are as follows,

-Microcontroller type ( e . g6805,8051)

-Mask ROM size-RAM size-Non volatile memory type (e.g EPROM,EEPROM)-Non volatile memory size-Clock speed (external, andoptionally internal)-Electrical parameters (voltage andcurrent)

-Communica t ions parameters(asynchronous, synchronous, byte,block)-Reset mechanism-Sleep mode (low current standbyoperation)-Co-processor (e.g for public keycryptography)

In practice the semiconductor manufacturershave a range of products for which the aboveparameters are pre-defined. The task of thedesigner is therefore concerned withchoosing the appropriate product for theparticular application. As mentionedpreviously security may be an importantissue for the application and accordinglythere may be extra requirements on thephysical and logical security offered by theparticular chip. Conformance to ISOstandards is also likely to be a requirementand in this area ISO 7816 - 3 (Electronicsignals and transmission protocols) is theprinciple standard to be considered. Itshould be noted however that ETSI (EuropeanTelecommunications Standard Institute) arecurrently developing new standards for theCEN TC224 committee. These standards aremore stringent than that described by theISO standards. For example the ISO 7816-3allows a card current supply of up to 200 mA.ETSI have recommended 20mA for normal useand 10mA for applications such as portablephones.

Card specification

The specification of a card involvesparameters that are common to many existingapplications using the ISO ID-1 card. Thefollowing list defines the main parametersthat should be defined,

- Card dimensions- Chip location ( contact card)- Card material (e.g PVC,ABS)- Printing requirements- Magnetic stripe (optional)- Signature strip (optional)- Hologram or photo ( optional)- Embossing (optional)- Environmental parameters



The characteristics of the smart card arepart of the ISO 7816 part 1 (physical) and 2(contact location) standards. The choice ofchip location has been a difficult subjectdue largely to the use of magnetic stripes.The early French cards put the IC modulefurther off the longitudinal axis of thecard than the standard eventually agreed by



Fig1 Stages in the manufacture of a smart card



ISO. This was preferable because of the application cards where it is essential toresidual risk of chip damage due to bending. provide the necessary security segregation.The French Transac tracks were lower on the The developed code is given to the suppliercard which also made this position who incorporates this data as part of thepreferable. The now agreed ISO standards for chip manufacturing process.magnetic stripes resulted in the French chipposition and the magnetic stripe beingcoincident. Hence the now agreed lowerlocation which does of course result inhigher bending stress on the chip. The ISO7816-2 standard does however allow theposition of the contacts to be either side ofthe card. More recently there have beenmoves to remove this option with the front(opposite to the side containing themagnetic stripe) being the preferredposition for the IC connector.

The choice of card material effects theenvironmental properties of the finishedproduct. PVC was traditionally used in themanufacture of cards and enabled a higherprinting resolution. Such cards arelaminated as three layers with transparentoverlays on the front and back. Morerecently ABS has been used which allows thecard to be produced by an injection mouldingprocess. It is even proposed that the chipmicromodule could be inserted in one step aspart of the moulding process. Temperaturestability is clearly important for someapplications and ETSI are particularyconcerned here, such that their highertemperature requirement will need the use ofpolycarbonate materials.

Mask ROM Specification

The mask ROM contains the operating systemof the smart card. It is largely concernedwith the management of data files but it mayoptionally involve additional features suchas cryptographic algorithms (e.g DES). Insome ways this is still a relativelyimmature part of the smart card standardssince the early applications used the smartcard largely as a data store with some simplesecurity features such as PIN checking. Therelevant part of the ISO standard is 7816-4(commands). There is a school of thoughtthat envisages substantial changes in thisarea to account for the needs of multi-

Application Software Specification

This part of the card development process isclearly specific to the particularapplication. The application code could bedesigned as part of the mask ROM code but themore modern approach is to design theapplication software to operate from thePROM non volatile memory. This allows a farmore flexible approach since theapplication can be loaded into the chipafter manufacture. More over by the use ofEEPROM it is possible to change this code inan development environment. Themanufacturer of a chip with the users ROMcode takes on average three months.Application code can be loaded into the PROMmemory in minutes with no further referenceto the chip manufacturer.

Chip Fabrication

The fabrication of the card involves anumber of processes as shown in fig. 2. Thefirst part of the process is to manufacturea substrate which contains the chip. This isoften called a COB (Chip On Board) andconsists of a glass epoxy connector board onwhich the chip is bonded to the connectors.There are three technologies available forthis process, wire bonding, flip chipprocessing and tape automated bonding(TAB). In each case the semiconductor wafermanufactured by the semiconductor supplieris diced into individual chips . This may bedone by scribing with a diamond tipped pointand then pressure rolling the wafers so thatit fractures along the scribe lines. Morecommonly the die are separated from thewafer by the use of a diamond saw. A mylarsheet is stuck to the back of the wafer sothat following separation the dice remainattached to the mylar film.

Wire bonding is the most commonly usedtechnique in the manufacture of smart cards.



Here a 25uM gold or aluminium wire is bondedto the pads on the chip using ultrasonic orthermo compression bonding. Thermocompression bonding requires the substrateto be maintained at between 150C and 200C.The temperature at the bonding interface canreach 350C. To alleviate these problemsthermo sonic bonding is often used which isa combination of the two processes but whichoperate at lower temperatures.



Fig 2 Smart card fabrication process



The die mounting and wire bonding processes This is accomplished by using the basicinvolve a large number of operations and are commands contained in the operating systemtherefore quite expensive. Because in in the mask ROM. These commands allow thegeneral only 5 or 6 wires are bonded for smart reading and writing of the PROM memory.card applications this approach isacceptable. However in the semiconductorindustry generally two other techniques areused, the flip chip process and tapeautomated bonding. In both cases gold bumpsare formed on the die. In flip chipprocessing the dice are placed face down onthe substrate and bonding is effected bysolder reflow. With tape automated bondingthe dice are attached by thermocompressionto copper leads supported on a flexible tapesimilar to a 35mm film.

The finished substrate is hermeticallysealed with an inert material such as epoxyresin. The complete micromodule is thenglued into the card which contains theappropriately sized hole.

The fabrication of a contactless card issomewhat different since it always involvesa laminated card as shown in fig. 3. The ICsand their interconnections as well as theaerial circuits are prepared on a flexiblepolyimide substrate.

Application load

Assuming the application is to be placed inthe PROM memory of the IC then the next stagein the process is to load the code into thememory.

Card Personalisation

The card is personalised to the particularuser by loading data into files in the PROMmemory in the same way that the applicationcode is loaded into memory. At this stage thesecurity keys will probably be loaded intothe PROM memory but as mentioned previouslywe will explore this in more detail later.

Application Activation

The final operation in the manufacturingprocess is to enable the application foroperation. This will involve the setting offlags in the PROM memory that will inhibitany further changes to be made to the PROMmemory except under direct control of theapplication. Again this is an integral partof the overall security process.



Fig 3 Contactless card laminations



Smart Card Diary

European Payments 92 (EFTPoS & HomeServices), Sheraton Hotel, Edinburgh,Scotland, 17-19 November.

This eighth annual conference and As the European Community moves towards moreexhibition organised by the Scottish relaxed frontier controls there is a growingElectronics Technology Group offers an demand to use new technology, such as SmartIntroductory Tutorial To Smart Cards on the Cards, to avoid queues and delays atafternoon of 16 November chaired by Bob passport desks.Carter, Senior Consultant, OrchardInternational. Enquiries to Paula Member states are being encouraged byBiagioni, Tel: +(0)41-553 1930, Fax: Brussels to allow unhindered travel, but the+(0)41-552 0511. British Government, while saying it will

Managing European Plastic Cards, Hotel the right to scrutinise documents at BritishMelia, Madrid, Spain, 19/20 November. points of entry. When the Channel Tunnel,

Covering the card industry with sessions on be increased calls to ease restrictions onsmart cards including the topic "Has the travellers. issuance of Smart Cards deterred the levelof fraud in France?" from Christine Woillez, A Smart Card, perhaps with some biometricD i r e c t e u r d e l ' E x p l i o t a t i o n identifier, is the likely long-termInterbancaires, Groupement des Cartes solution. Experiments are already underwayBancaires (France). Programme from IIR, UK in some countries. At Amsterdam's SchipholTel: +44 71 412 0141, Fax: +44 71 412 0145. airport, Dutch travellers who are frequent

Smart Card '93 Conference and Exhibition, year - can obtain a card containing passportWembley Conference Centre, London, 16-18 details and a digitized fingerprint. TheyFebruary. can avoid queues by using their Smart Card

Six conference streams covering rightful owner of the card through theircommunications, market overview and fingerprint. marketing systems, finance and security,medical, technology and innovations, and Advocates of this scheme say that the cardtransport and travel. In addition there will readers and computer software could bebe a half-day seminar on 15 February installed at any airport.providing a practical introduction to Smartcards for new and potential users. A second Meanwhile, BAA, who operate the UK'shall has now been opened for exhibitors. airports say they are discussing suchContact Conference Secretariat Tel: systems with the British Home Office but say+44(0)733 394304. it could be some time before Smart Card

CardTech/SecurTech/ISSA '93 Conference and travellers.Exhibition, Hyatt Regency Hotel, CrystalCity, Virginia, USA, 18-21 April. Pilot test

Ten concurrent seminars will be heldthroughout the three main days of theconference - CardTech tracks stressingapplications of advanced card technologies,SecurTech tracks addressing specificapplications, and ISSA (Information Systems

Security Association) tracks focusing onsecurity. A major exhibition is being run inconjunction with the conference. Contact:Ben Miller (CTST) Tel: +1 301 881 3383.

A Smart Way to Travel?

relax controls on EC citizens, has reserved

linking Britain and France, opens there will

users of the airport - at least five times a

which positively identifies them as the

technology is available to British

In the United States, immigration officialsare interested in a pilot test to be carriedout at New York's JFK and Newark airports,which relies again on biometric techniquesfor the personal identification of theindividual. Instead of fingerprints, the



scheme uses hand geography technology.Passengers who are computer registered willhave their passports scanned while a secondsystem will read the palm of their hands toverify that they are who they claim to be andtherefore the genuine holder of thepassport.

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Gemplus Offering Public Key

Gemplus is offering an evaluation kit forpublic key cryptography called MIMOSA. Theproduct is a public key algorithm Smart Cardand Gemplus plan to introduce the Smart Cardthrough the evaluation kit so that customersand potential customers can test this typeof system and evaluate public keycryptography.

The G-Q (Guillou and Quisquater) algorithmhas been embedded in the Philips 83C852 chip

recently available from Philips in Germany.This will be the first public key chip fromGemplus which up until now has used DES forcryptographic security.

The G-Q algorithm was first proposed byGuillou and Quisquater at Eurocrypt '88 as azero knowledge based identity schemesimilar to that of Fiat and Shamir. Thispaper was updated at Crypto '88 to include asignature scheme.

The Fiat and Shamir signature scheme is



optimised for a lower processing overheadthan RSA but at the expense of memoryrequirement and size of signature. The G-Qalgorithm increases the processing but withless memory. MIMOSA offers a method that keeps the numberof keys and hierarchies required for multi-applications to a minimum. Gemplus saysthat this method, based on the use of a publickey algorithm, considerably limits the roleof the card issuer and enables more flexiblemanagement of cards.

The MIMOSA evaluation kit will be availableshortly and consists of a softwareenvironment, sample cards, a card reader andaccompanying documentation. MIMOSA is soldunder a CCETT license.



Electronic Toll Collection

The electronic toll collection system undertest at AT&T Bell Laboratories at Holmdel,New Jersey.

AT&T has developed an electronic tollcollection system whereby drivers merelyinsert their personal Smart Card into asmall radio transponder as they approach atoll-collection area. Receivers eithermounted above the road or on the pavement (asillustrated in the drawing below)communicate with the transponder, noting

the locations where the car entered andexited the highway, or where the toll waspaid. The toll charge is transmitted back tothe dash-top communicator and a record ofthe transaction is written onto the SmartCard.

The system allows drivers to pay tollswithout stopping or fumbling for change, byidentifying the moving vehicle. Thetransaction takes only milliseconds.

The card could operate as a prepaid debitcard, or as a credit card with a runningaccount and monthly billing.

Last April AT&T and Lockheed Corporationsigned an agreement to jointly developIntelligent Vehicle Highway Systems (IVHS)for a market said to be worth more than $200billion over the next 20 years in the UnitedStates alone. Electronic collection ofvehicle tolls is a key component of IVHS, andLockheed has already installed the firstsuch system in the US.

Contact: Michael Jacobs, AT&T Tel: USA 201- 564- 3836.

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