Visa cash Uses Motorola Fast Crypto Chip For Leeds, UK Smart Card Trial

Visa Cash Leeds, UK trial. Mondex smart card rival

will use chips from Motorola and Siemens for public key

cryptography to handle credit and debit functions.

Ray Van Eng (03/10/97)

The U.K. based Mondex with the backings of Mastercard and other International banks is aggressively courting market acceptance in various parts of the world, especially in North America and the Asia Pacific region. There are good reasons for them to do so.

Although Europe has always been a hot bed for smart card products, public reactions there towards e-purse or stored value card schemes have been apathetic. For example, the highly publicized Mondex trial in Swindon England not only failed to secure the endorsement of some major domestic banks such as Barclays and Lloyds, it only has about 10,000 people (or 5% of the population) in that city signed up for the service after testing began in mid-1995.

In contrast, Mastercard's arch rival, Visa International has their biggest stored value smart card test during the 1996 Summer Olympic Games in Atlanta, GA where a million and a half Visa Cash cards were issued to visitors and residents throughout the city. Now, Visa Cash is planning to invade the Mondex home turf and will launch a smart card trial in Leeds, England in late 1997.

Though the U.K. trial will be a much smaller affair than the U.S. pilot involving only 70,000 cards, it will have one major significance - it will be the first time a large scale e-cash trial to employ public key cryptography.

Visa Cash's banking partners include Barclays, Lloyds/TSB, Royal Bank of Scotland, Halifax, Abbey National and Cooperative Bank. Visa Cash cards will be issued to consumers for spendings at newsstands, vending machines, public transits, and parking lots where small value transactions are normally done with cash.

At the heart of the smart card is a fast crypto chip made by Motorola that incorporates an 8-bit micro- processor, 20K bytes ROM, 4K bytes EEPROM and 896 bytes RAM, and an operating voltage of 3-5V. The main function of the Motorola chip is to speed up the public key encryption process used in authenticating a transaction.

The Motorola chip (M68HC05SC49A) is capable of handling 1,024 bit cryptography scheme offering the highest degree of data security, and is said to be one of the most powerful on the market today. With this hardware assistance, transaction time is cut from tens of seconds to the millisecond range which is critically in a fast pace retail environment.

Siemens is also reputed to be a chip supplier to the Visa Cash trial. Siemens' SLE 44CR80S is a smart card cryptocontroller chip which offers similar features as the Motorola chip. One major advantage of the Siemens product is its small footprint (15mm2) which is frequently a deciding factor in smart card manufacturing.

Visa Cash's long time smart card partner, Schlumberger Electronic Transactions will provide a modular operating system that would allow Visa's member financial institutions to combine multiple functions in one card. This also suggests that future Visa Cash cards will be more than just a stored value variety. Beside being e-purses, Visa Cash can also be a credit/debit or ATM card, consumer loyalty card, frequent mileage card etc. all rolled into one.

The multi-application Visa Cash card conforms to the EMV '96 (Europay, Mastercard, Visa) specification, and the UKIS card authentication system for credit and debit functions. With England being one of the most important markets for debit/credit transactions, Visa is certainly sensing the opportunities in this area. Right now, the Mondex card is a strictly store-value card with no credit/debit capabilities, however, Mastercard did publicly stated that they are working to incorporate such features into the Mondex card.

The Visa Cash U.K. trial is expected to last for about one year and may then be extended nationally.

According to Colin Grannell, senior vice president, Visa EU region, there are 8.1 trillion dollars worth of cash transactions yearly in the world's top 29 economies. Visa International hopes to be a major player in this market segment.

Visa is the largest consumer card payment system in the world with more than 12 million acceptance locations and 404 million cards in circulation.

*Public key encryption involves the use of two keys: a public and a private one. The sender uses his/her private key to encrypt a message, the receiver would then use the sender's widely distributed public key to decrypt the message. After the message has been decrypted, the recipient will know that the message could only come from the sender and the message has not been tampered with enroute.

Using a smart card to store the private key for encryption functions not only prevents the key from being stolen over the Internet, it also makes it more portable for the key to be used with any smart card reader, be it a personal computer or point-of-sale device.

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