Ray Van Eng (07/23/97)                          

We never stop to progress, the same goes for smart cards and electronic commerce.

Now that the Visa International and Mastercard International derived secure electronic transaction (SET) protocol is out and smart card technology is moving along briskly, what better thing to do than marry the two systems?

As any e-commerce savvy banker can tell you, smart cards for stored value sake just isn't going to cut it. It is estimated that if 50% of all American adults carries a smart card with a $100 value on it, the total "float" or mobile cash would be about $10 billion. With a profit margin of about 5%, the revenue that all the financial institutions can make out of this market would only be a mere $500 million. The annual profits of even a moderate size bank could easily exceed that figure.

So the key to massive deployment of smart cards is to enable these devices to run multiple applications: credit, debit, customer loyalty, identification, health care, network access, electronic purse, shopping on the Internet etc.

Java, as we all know is the Sun Microsystem Inc. introduced programming system that has taken the computer industry by storm in recent months. Java is cross platform and that makes it ideal for smart cards which will have to interact with a wide variety of machinery: ATM, point-of-sale (POS), PCs, network computers, mainframes, cellular devices, set top boxes, and many other types of equipment we have not even dream of today. It is this "write once, run anywhere" motto that has sparked the imagination of a new generation of programmers who swear by it like some born again evangelist.

JavaCard has the support of many industry luminaries including IBM, Schlumberger, Gemplus, Citibank, First Union, Bull, Hitachi, Motorola, Toshiba, Verifone and others.

Visa's smart card vision, the "Chip Electronic Commerce Standard", is focused on incorporating widely adopted practices such as the SET and the EMV (Europay, Mastercard, Visa) protocols. The objective is to allow Visa member financial institutions to "standardize the acceptance infrastructure in the physical and virtual world," so says François Dutray, group executive vice president, Visa International. Java is being selected as the lingua franca for use in smart card application development.

When Zona Research asked 279 IT professionals concerning the deployment of java systems, virtually all of them say they are either developing java applications or will do so within the next 12 months. So the usefulness of JavaCard applications can easily be extended to the corporate environment.

Recently, Sun teams up with Siemens AG, a smart card chip maker to develop a line of microprocessors that will accelerate the execution of java programs, all the better to handle the complex cryptography requirements needed for multiple application smart cards with a small memory footprint.

By the way, Sun has just announced the version 2.0 of the Java Card API (application programming interface) with improvements over previous versions to facilitate the evolution of smart cards into the multiple application realm.

At "The Promise of SET" conference co-sponsored by Visa and Mastercard, Sun also demonstrated a javatized "electronic wallet" that incorporated the SET protocol to initiate a secure purchase over the Internet with a Open Market Merchant Server.

On the other hand, MULTOS, the multiple application operating system has its own APIs and coding system that accept programs written in C, a traditional computer language. Support for Java is promised later in the future. The MULTOS membership include mostly smart card vendors such as Dai Nippon Printing, Gemplus, Motorola, Hitachi, Siemens, Keycorp and of course, Mastercard and Mondex.

Although Mastercard was on the board of the JavaCard platform. Visa was not invited to join the MULTOS bandwagon. The official explanation was that MULTOS wanted to keep the number of votes down so that consensus can be obtained more readily.

By looking at the partners at both camps, one can notice a good deal of overlap there which is encouraging because there just might be at least some degree of compatibility between products put forth by these two opposing sides sometime next year.

So let's not get religious here, the JavaCard and MULTOS platforms are meant to do the same thing -- to enable the development of multiple function smart cards so that consumers will only need to carry one card and be able to identify himself or herself online or off, authenticate transactions, supply data to health care providers, use it as a credit/debit or cash card, gain access to a network, have it calculate the frequent flyer mileages, the list goes on and on. What a great convenience that would be.

In any case, the dice are cast. To paraphrase Mastercard, "the future of money" and many aspects of our social interaction would depend greatly on the development of a new generation of multi-application smart cards. Our lives would become a much simpler and smarter one, as Visa says, "anywhere you want to be." Be it the real or virtual world.