Contactless smart cards are becoming hot business.
Motorola Inc. announced last month its plans to be a leader in the business of contactless smart cards. Meanwhile, the France-based Gemplus Group claims to have already achieved “world leadership in the area of contactless products,” according to Marc Lassus, Gemplus founder and chief executive officer.
Gemplus recently signed “the world’s biggest contract” for contactless cards with Intec of Korea. The cards will be issued for use in a Seoul mass transportation system.
Contactless smart cards are plastic cards with a radio antenna embedded in the perimeter of the card. A microprocessor also is encased within the card. Contactless cards do not have to be swiped, but they must be within 3 or 4 inches of the radio frequency reader. Customers can even leave the card in their wallet or purse, manufacturers said.
The RF reader operates at 13 MHz. It scans the card, the radio waves power the microprocessor, and the chip and reader communicate, resulting in a debit from the card.
The primary application for contactless cards, at this time, is for transportation, particularly mass transit where customers are rapidly moving on and off the system.
Illinois-based Motorola recently announced plans to enter the global smart card business through the complete manufacture of the product. It is now only a supplier of smart card semiconductors to smart card manufacturers.
But the move puts Motorola in a precarious position-as a competitor to its semiconductor customers. To solve any fear of conflict, Motorola put its Smartcard Systems Business in the Land Mobile Products Sector in Schaumburg. A fire wall will stand between information shared with the semiconductor division and the Smartcard Systems Business, the company said.
Motorola said its expertise in radio communications and U.S. defense security distinguishes it from competitors, especially in security matters surrounding contactless cards.
Motorola may have the ability to apply bio-metric technology to establish card identity in the next few years. Instead of entering personal identification numbers or passwords, the card users would be identified by their thumb print, or through a retina scan.
Motorola said its ability to create application software will help define the software environment, and create “interfaces that allow third parties to write software,” executives said.
Some strides already have been made through group effort.
Last week, Citibank expressed support for Sun Microsystems’s Java Card 2.0 application programming interface. Citibank is the world’s largest issuer of Visa and MasterCard bank cards.
Gemplus and smart card manufacturer Schlumberger Ltd. formed the Java Card Forum last February to promote the Java platform as an industry standard.
Also, the ImagineCard Alliance has created a smart card-based secure infrastructure for electronic commerce, and secure enterprise-wide information interchanges. The alliance includes Gemplus, Hewlett-Packard Co. and Informix.
Motorola executives say they aren’t sure how their new goal of building cards will affect their semiconductor relationship with other card manufacturers. One executive said other card manufacturers may be “looking forward to working with Motorola to shape solutions.”
People familiar with the smart card industry question these well-laid plans. Philips Electronics NV of the Netherlands recently sold its card manufacturing business in France to a car maker in the United Kingdom. Philips had tried to supply microprocessors to card manufacturers and build cards through a joint venture. Although Philips wouldn’t comment, industry sources suggest Philips found the competitive aspect of the situation unworkable.
