Microsoft Enters the Smart Card Market With Low-Cost, Easy-to-Use Approach

PARIS, October 27, 1998 — The smart card industry is likely to be the next big thing. It has all the potential of the Internet but with the added advantage of a user base that already runs into the millions. In addition, the use of credit cards, phone cards and access cards are so imuch a part of everyday life that most people rarely give them a second thought.

Microsoft this week announced that it is entering the smart card market with Smart Cards for Windows, which will offer the industry the benefits of Windows-based development and run-time environments. A beta version of Smart Cards for Windows is scheduled to be available in January 1999.

Microsoft, which made the announcement at the Cartes ’98 conference in Paris, the most important gathering of the smart card industry in the world, said Smart Cards for Windows will enable card issuers and designers to employ their existing Windows expertise to develop and deploy a broader range of smart cards and applications than is currently possible with existing smart card systems. Smart Cards for Windows extends the Windows family and has been developed and designed by Microsoft and its key partners to help expand the smart card industry. Several key partners joined Microsoft in its announcement including Schlumberger Electronic Transactions and GemPlus as well as pilot customers, such as Merrill Lynch Company Inc.

More than 1billion smart cards were in circulation in 1997 – mostly in Europe and Asia, but also a growing number in the U.S. According to Ovum, an independent worldwide authority on smart card markets, the market for smart cards will reach 2.7 billion by 2003, with the largest markets in pre-payment applications and access control.

Despite this projected growth, the smart card industry is at a stage in its development similar to the early days of the personal computer industry. Historically, the smart card has been based on several proprietary systems, making it difficult to develop applications that can be used to suit a variety of lifestyles and replicated worldwide. All that appears ready to change.

Microsoft’s Smart Cards for Windows provides a standard-based platform that enables secure storage for smart cards used for a variety of purposes, such as secure network authentication, secure corporate transactions, electronic cash and customer loyalty programs.

“Smart Cards for Windows uniquely offers the greatest choice of tools, a common run-time environment and the strongest possible security,” said Craig Mundie, senior vice president of the consumer platforms division at Microsoft. “With the low-cost Smart Cards for Windows, we hope to support a broad array of solutions to provide secure access to online resources as part of an end-to-end solution. We have a business model that provides value-added opportunities for our partners, and we feel we have the opportunity to help expand the smart card market on an international basis.”

Smart Cards for Windows is an 8-bit multi-application operating system for smart cards. It is designed to be a low-cost, easy to program platform that runs many existing Microsoft technologies, such as Visual Basic applications. It has been designed to meet four key criteria:

  • To enable smart cards to be a secure extension to the PC environment, in terms of development tools and connectivity

  • To work with software development tools that have a broad base of developer familiarity and support

  • To offer card issuers the ability to choose the components they want from a variety of suppliers

  • To deliver smart cards at a more attractive price, therefore encouraging new applications and uses. Card are expected to cost between $2 and$4 each, compared to the $15 or so it costs for existing cards

Technology is becoming smaller and more portable every day. People are looking for smaller and more convenient ways to carry their data with them, and smart cards are another step in this direction. When a single smart card can support a number of applications-such as holding travel tickets, tracking money and frequent flyer points and gauging users’ travel preferences–then smart card technology will have truly come into its own.

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