MOTOROLA DECLARES 1996 THE YEAR OF THE SMARTCARD ARE YOU READY?

Allan Hughes worldwide Smartcard operations manager for Motorola Semiconductor Product Sector based in East Kilbride, Scotland says the Smartcard, a technology developed in Europe, is about to invade the U.S. This summer at the 1996 Olympics, the largest U.S. trial of Smartcards will occur.

In the greater Atlanta, Ga. area, 5,000 stores will accept Visa Smartcards for purchases. In addition, Hughes says both MasterCard and Visa plan to convert their debit and credit cards to Smartcard. That represents 800 million cardholders worldwide. However, the conversion will occur over several years.

Hughes points to a number of other programs occurring in Europe and South America that better indicate the future direction of Smartcard adoption. In Germany, there will be a 40 million-unit rollout of the German Eurocheque Card.

Spain will be the first country in Europe to implement nationwide a Social Security Card system based on Smartcard, issuing 35 million cards to its citizens. In the Czech Republic, the European Union will use Smartcards for delivering health services. Similar, smart cards will be used in Brazil to deliver health care.

Another application using Smartcards is digital satellite systems. Motorola estimates that over a million subscribers are using Smartcards to access and pay for programming.

To date, the most extensive Smartcard implementation has been in facilitating French banking and metering GSM cellular phone access. Hughes says 27 million cards are currently being used in these two applications each year.

French banking first adopted Smartcard technology in 1977. Hughes says Motorola produced the first 2-chip Smartcard solution in 1979 then a single chip solution the following year. The company worked with Bull SA in Paris, France to develop the solution. Bull licensed the technology in 1989. To date, Hughes estimates Motorola has shipped 100 million Smartcards.

Motorola estimates state that the Smartcard market will grow three-fold from 1995 to 1996. This year, the company says the market is worth $200 million. By 2000, it predicts the market will have grown to $1 billion.

What makes a Smartcard smart is an on-board microcontroller, currently an 8-bit processor. In addition, the device contains blocks of RAM and ROM memory as well as writable nonvolatile memory. Programs stored in the ROM control all transactions occurring on the card. Programs include user identification software as well as encryption code to prevent theft.

The cards have a number of applications. Most are similar to existing credit cards in that the Smartcard is inserted into a card reader for a transaction to occur. However, Hughes says there is a new generation of contactless cards coming.

In addition to computing circuits , the contactless cards will have a small RF transmitter/receiver on board. It will allow the card to be read by a remote station automatically. Applications making use of this capability include ticket purchases for subway, buses and trains. The user simply walks near a reader and the transaction occurs via wireless communications between card and reader.

The only remaining question is will users in the U.S. embrace the card?

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