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CARTES & IDentification 2008 focuses on the use of smart cards

June 2008 by CARTES & IDentification

The 23rd edition of Cartes & IDentification (Trade shows and Conference), from November 4 to 6, 2008, turns the spotlight on the United States. As the biggest payment card market in the world, the country has rapidly adopted contactless payment and understood the potential of smart cards in the field of security and access control.

Rapid adoption of contactless payment

It is considered good taste for Europeans to smile knowingly when deployment of smart card applications in the United States is mentioned. It is a hackneyed topic which invariably comes down to the “Not Invented Here” syndrome. This simplistic vision is very outdated. American banks have certainly not yet clearly indicated that they will one day adopt the EMV chip, but they are the first in the world to have adopted, two or three years ago, contactless payment using a chip capable of emulating the magnetic strip of their traditional bank cards.

The American market is the biggest market in the world for payment cards, in particular credit payment. It captured more than 56% of payment transactions carried out in 2007, representing $40.7bn. The share in this of contactless cards was still modest in 2006, representing just 777 million transactions (27 million cards). However, forecasts predict significant growth by 2011: 2.2 million transactions and 109 million cards.

This market is encouraged by the ease of use and speed offered by contactless, for the consumer as well as businesses. For this reason, JP Morgan has already issued more than 10 million “Blink” cards and Washington Mutual Inc. has recently announced the issue of 25 million cards. All the big banks such as Wells Fargo & Co., HSBC Holdings PLC, Citigroup Inc. have contactless card programmes. Bank of America, Citi Cards, SunTrust, Wachovia and BancorSouth have also launched online banking applications using mobile phones as a result of agreements with operators such as Verizon and AT&T Wireless, secure software publishing companies such as Firethorn and mFoundry, and big “processors“ such as First Data and Metavante. The forecast is that 34 million mobile phones will be used by online banking applications in 2012. And 8-30 million phones will be equipped with an NFC interface, for contactless proximity payment applications1. Use of cards in governmental security applications Creators of the Common Access Card (CAC) In the field of governmental and federal security, the United States was the first country in the world to involve experts (some of whom were recruited by the pioneers of smart cards in Europe). These ran a national “smartcard” programme within the NIST (National Institute of Standards and Technology) and the GSA (General Services Administration). This programme made it possible to set the specifications and proceed, from 2000, with the deployment of a smart card (the CAC, meaning Common Access Card) now used in all sensitive administrations of the DoD (Department of Defense). More recently, this programme also made it possible to develop a smart federal identity card incorporating biometric data, the PIV (Personal Identity Verification). Increase in the number of CAC cards Since their launch in 2000, 13 million CAC cards have been issued. These cards make it possible to control access to the workstations of DoD employees, evaluate emails and access websites. A new generation was released in 2006, in compliance with the 2004 directive known as HSPD-12 (Homeland Security Presidential Directive), from which the PIV card originated. These two cards now offer contactless functions to control access to federal buildings and benefit from public key infrastructure (PKI) for deployment and use. They may also use biometric data to authenticate carriers at their workstation. Several tens of millions of PIV cards are due to be deployed in due course. An ambitious American identity card project The most ambitious programme, but also the most controversial, is that of creating a national identity card issued by each State to replace the driving licences, currently used as identity cards by the authorities and which can easily be forged. The “Real ID Act”, signed in May 2005 by President Bush, is far from universally popular however. Its cost of around $15bn, the expected time it will take to implement, the risk to the protection of privacy and confusion over the technologies to be implemented are all currently obstacles to its implementation.

Once again, smart card technologies are part of the debate. Less than a month ago, the NIST confirmed, after a series of tests, that the use of biometric data combined with smart card technologies (or “match-on-card“, whereby all calculations are carried out in the chip) offered a higher level of security than any other solutions. This could be a solution to the "privacy" and security questions still posed by the Real ID Act. So, with the two major advances represented by contactless payment and access control for governmental applications, the smart card has won over the United States in less than 10 years.

From November 4 to 6, 2008, the United States will be the guest of honour at CARTES & IDentification 2008.

1 Source: Visa Inc, MasterCard, ICMA and, In-Stat

About Cartes & IDentification 2008

The Cartes & IDentification Trade show will open its doors on November 4th at Paris- Nord Villepinte Exhibition Centre. The world leading event on digital security and smart technologies will bring together all the international players of the sector who will present their innovations to the 20,000 expected visitors. For this 2008 edition, the Unites States will be the guest of honor.

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