smart card forum

8/6/2019 Smart Card Forum

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e-commerce

healthcare

transit

government

loyalty

netw ork security

access control

banking

campus solutionswireless


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We hope that you find this short overview on the smart card world educational and

informative. Since the Smart Card Forum was founded in 1993, the application ofsmart card systems within North America has expanded and now, at the verge of thenew mil lennium, we see excit ing possibi li ties for these systems. The Internet has cre-ated enormous opportunities while it has also created privacy and security challenges.We see smart card systems enabling privacy and security in this virtual world and asa linchpin in creating increased high-assurance business to business commerce.

We expect you will find this brochure informative and hope you will take advantageof the varied Smart Card Forum educational programs, workgroups, conferences, andresearch materials in enabling privacy and security in your businesses.

Best Regards,

Donna FarmerPresident and CEO, Smart Card Forum

Rmy de TonnacCEO, Gemplus Americas

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Answers to Frequently AskedQuestions about Smart CardsAnswers to Frequently AskedQuestions about Smart CardsWhat is a smart card?

The smart card is one of the latest additions to t he world of inf ormation t echnology. Similar insize to today's plastic payment card, the smart card has a microprocessor or memory chip embed-ded in it that, when coupled with a reader, has the processing power to serve many differentappl ications. As an access-control device, smart cards make personal and business data availableonly to t he appropriate users. Anot her application provides users with t he abilit y to make a pur-chase or exchange value. Smart cards provide data portability, security and convenience.

Memory vs. microprocessorSmart cards come in two varieties: memory and microprocessor. Memory cards simply store dataand can be viewed as a small floppy disk with optional security. A microprocessor card, on theother hand, can add, delete and manipulate inf ormation in it s memory on t he card. Similar t o aminiature computer, a microprocessor card has an input/output port operating system and harddisk w ith built -in securit y features.

Contact vs. contactless

Smart cards have tw o dif ferent types of int erfaces: cont act and contact less. Cont act smart cardsare inserted int o a smart card reader, making physical contact wit h t he reader. However, cont act-less smart cards have an ant enna embedded inside t he card that enables communicat ion wit h t hereader without physical contact. A combi card combines the two features with a very high levelof security.

How are smart cards used?

Smart cards help businesses evolve and expand their products and services in a changing globalmarketplace. The scope of uses for a smart card has expanded each year to include applications


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in a variety of markets and disciplines. In recentyears, the information age has introduced an arrayof security and privacy issues that have called foradvanced smart card security applications.

Information Technology

Businesses, the government and healthcare organiza-tions continue to move towards storing and releasinginformation via networks, Intranets, extranets and theInternet. These organizations are turning to smart cards to make this information readilyavailable to those who need it , while at the same time prot ect ing the privacy of individuals andkeeping their informational assets safe from hacking and other unwanted intrusions. In thiscapacity, smart cards enable:

Secure logon and authent icat ion of users to PCs and networks Secure B2B and B2C e-commerce Storage of dig ital cert if icates, credent ials and passwords Encryption of sensitive data

Wireless Communications

People using the Global System for Mobile communications (GSM) standard for mobile phonesuse smart card t echnology. The smart card is inserted or int egrated into t he mobile handset. The

card stores personal subscriber information and preferences that can be PIN code protected andtransported from phone to phone. The smart cards enable:

Secure subscriber authentication Roaming across networks Secure mobile value added services

Wireless providers benefit f rom reduced fraud t hanks to the securi ty off ered by smart cards. With

the advent of mobile services such as mobile commerce, web browsing, and information services,wireless providers rely on smart cards to act as the security mechanism to protect those services.


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As a result, smart cards are beginning to move beyond GSM to secure mobile services for otherwireless standards as well.

Commercial ApplicationsSmart cards also provide benefits for a host of commercial applications in both B2B and B2Cenvironments. The smart cards portability and ability to be updated make it a technology wellsuit ed for connect ing the virt ual and physical w orlds, as well as mul t i-partner card programs. Thecards store information, money, and/or applications that can be used for:

Banking/payment Loyalty and promot ions Access cont rol Stored value Identification

Ticketing Parking and t oll collect ion

Multiple applications can be stored on the card, enabling partnering on card programs and pro-viding added convenience to t he card reader.

What is the potential for the smart card business?

A survey completed by Card Technology Magazine ind icated that the industry had shipped morethan 1.5 billion smart cards worldw ide by the end of 1999. Over the next f ive years, the industrywill experience steady growth, particularly in cards and devices to conduct electronic commerceand to enable secure access to computer networks. A March 10, 2000 study by Dataquest predictsalmost 28 million smart card shipments (microprocessor and memory) in the U.S. for 2000.According to this study, an annual growth rate of 60% is expected for U.S. smart card shipmentsbetween 1998 and 2003. Smart Card Forum Consumer Research, published in early 1999, providesadditional insights into consumer attitudes towards application and use of smart cards. This

primary research publication is available from the Forum for a modest fee.


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Why are other countries aheadof the U.S. in applying smart cardtechnology?

Card issuers in different countries are building theirbusiness case to just if y the issuance of smart cards for

different reasons. Here in the U.S., American Expresslaunched the first wide-scale rollout of smart cards in1999 with Blue from American Express, a credit card with a smart chip that offers extra securitywhen shopping onl ine. New markets, or markets that are evolving for ot her reasons, wi ll f urtherhelp make smart cards widespread in North America. Two examples are the network computingand cellular telephone industries that use smart cards to aut hent icate users in new systems thatdemand the utmost in security.

Why are interoperability and enforced standards crucial to widespreadadoption of smart cards?

Even though there are hundreds of smart card pi lot s in existence around t he world, users may nottake a card from one country or scheme and use it in another. An industry-wide trend towardinteroperability and open platforms is now emerging, enabling the development of cards andapplications that w ill work t ogether in open environments. To do this, the industry must examinethe business and technical issues surrounding t he need for standardized int erfaces between cards,terminals and slots, which is the key to securing dramatic growth for the industry.

The Internat ional Organization f or Standardizat ion (ISO) has developed standards for smartcards. These standards were developed for use by multiple industries. Individual industries arenow developing proprietary versions of these ISO standards to support their own specif ic smartcard appl icat ions. There are numerous standards developed by members of the Forum, and oth-ers, to support and promote smart card standards.


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What are the major benefits that smart cards offer consumers?

Smart cards cont ain unique features that bring many benefi ts to both consumers and issuingorganizations:

What is a multiple application card?

A mul t iple applicat ion card is a smart card that can support dif ferent types of applications on t hecard it self t hereby reducing t he number of cards in t he wallet. For example, the chip on Blue f romAmerican Express currently offers two applications: extra security when shopping online using aPC smart card reader and online wallet, and a ticketing application that verifies a Cardmemberst icket order. Blue uses a mult iple application operat ing system and American Express plans to addother appl icat ions to t he cards smart chip.

Meanwhile, Visas multiple application card strategy is based on providing applications that addvalue t o Visas core credit and debi t payment products. A key component to Visas mult i-applica-t ion of fering is the flexible Open Platf orm technology. In addit ion t o providing added applicat ion

securit y through t he use of f irewalls on t he chip, t he Open Platf orm allow s for dow nloading newapplications to t he chip, w ithout having to reissue the card.

Feature

Security

Intelligence

Convenience

Benefits

chip is tamper-resistant information stored on the card can be PIN code and/or read-write protected

capable of performing encryption each smart card has its own, unique serial number

capable of processing, not just storing information

Smart cards can communicate with computing devices through a smart card reader

information and applications on a card can be updated without having to issue new cards

chip is tamper-resistant Smart cards provide a portable, easy to use form factor that many are familiar wi th using


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Another multi-application program was conductedat Florida State University where 40,000 smart cardswere deployed, which featured students personalidentification, dormitory security, banking, and awide range of stored value funct ions for t he purposeof food, payphone, photocopying, transport ation andvending services.

How is a smart card different from themagnetic stripe card that I carry in my wallet?

A smart card carries more information than can be accommodated on a magnetic stripe card. Itcan make a decision, as it has relatively powerful processing capabilities that allow it to do morethan a magnet ic st ripe card (e.g., data encryption).

What is the cost of an average smart card?

Trying to respond to this quest ion is like asking the cost of a car wi thout defin ing w hether it is aused VW or a new Rolls Royce. The price of a smart card depends upon its capacity. The averageprice for all microprocessor cards is $3.79 each, whereas, the average price for a memory card isestimated at 47 cents.

Why is reloadability important to the development of the smart cardvis-a-vis disposable cards?

There are markets for both disposable and reloadable cards. Disposable cards work well for anevent and as a collectible card. If the card is a multiple application card supporting, for example,debit and/or credit and stored value, the customer would not want to throw this type of cardaway. It w ould be more appropriate if the stored value applicat ion is reloadable.

A standalone reloadable card (as opposed to a standalone disposable card) is very attractive tosome customers. This customer would tend to be someone who uses their stored value on a


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frequent basis perhaps for public transportation, corporate cafeteria etc. and wants to be able toreload the card on a periodic basis rather than have to buy a new card each time.

How secure and confidential are smart cards?

Smart cards actually off er more securit y and conf ident ialit y than other f inancial inf ormation ortransaction storage vehicles, making it a perfect solution for e-commerce transactions. A smart

card is a safe place to store valuable information such as private keys, account numbers, pass-words, or personal information. It's also a secure place to perform processes that one doesn'twant exposed to the wor ld, for example, performing a public key or private key encryption.

Smart cards have computational or processing pow er to provide greater securi ty, allow ingverif icat ion of the cardholder. Entering a PIN is one method of verif icat ion, biomet rics is another.The benefit of the smart card is that you can verify the PIN or fingerprint securely, off-line.

The Smart Card Forum represents a very diverse group of industriesand government groups, many of whom have seemingly competitiveinterests. Is it possible that such a diverse group can work togetherproductively?

Today, even compet ing ent it ies agree that where new technologies are concerned, industry-wideeffort s are required t o bui ld w orkable inf rastructures and to develop compatible, interoperable,multi-use systems. This cannot be accomplished, on any meaningful scale, by individual playersacting in their own interests. To date, the Forum has been highly successful in fosteringcommunications across industries and the public sector and in encouraging various trials thatdemonstrate the viability of smart card-based payment and information systems. Moreover,membership in the Forum now exceeds one hundred and sixty organizations a st rong ref lect ionof the value industry and government entities feel the Form provides.


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Smart card glossary

Authentication:The process whereby a card or a terminal verif iesthat the other party is genuine.

Biometrics:The technique of studying physical characteristics

of a person such as fingerprints, hand geometry,eye structure or voice pattern.

Chip:A piece of sili con et ched w it h electronic circuit s (synonym: Integrated Circuit ).

Electronic Purse:A small portable device which contains electronic money. It is somet imes called an electronicwallet or stored value card.

GSM (Global System for Mobile Communications):A European standard for digital cellular telephones that has now been widely adoptedthroughout the world.

Microprocessor:

A chip that serves as the Central Processing Unit controlling a computer. It providesprogrammable in telligence.

Personalization:

During this process, a smart card is modified to contain the information for one person.

SIM (Subscriber Identification Module):A specific type of smart card for GSM systems holding the subscribers ID number, thusallowing him/her to call from any GSM device.


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tel: 212-837-7713

www.gemplus.com

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Redwood City, CA 94065tel: 888-GEMSMART

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