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A
Brief History of Smart Cards
The
smart card is by no means a new innovation; the technology was invented in
1974, and has been applied in various forms for over 20 years. Widespread use of the technology
began in Europe in the 1980’s and centered on two areas.
·
Many
public telephone systems in Europe are designed around the smart card
system, making them highly efficient and almost completely free of
vandalism and fraud.
·
European
banks adopted smart credit/debit card payment systems early on, largely to
reduce fraud and circumvent the need to verify each transaction via
telephone.
These
applications were slow to catch on in the US, precisely because the early
drivers for Europe do not offer the same benefits here. The US telecommunications
infrastructure is much less fragmented than Europe’s, and credit card
verification is easily accomplished with extensive networks already in
place. Tests of smart debit
cards in Atlanta during the 1996 Summer Olympics and in New York City in
1997 were met with lackluster public response.
In
the last few years, though, smart card technology has been applied in a
wide range of other areas.
These include transit passes, mobile phone user verification,
network user authentication, government ID cards, and in some cases
national ID cards. The
increased use of the internet for communication and commerce has raised
new concerns about user authentication and credit card fraud, and smart
cards are seen as a way to combat these concerns.
In
2000-2001, American Express (“Blue”) and bank card issuers Visa and
Mastercard have launched large scale smart card programs in the US despite
earlier market test failures.
These cards contain a smart chip, whose primary function is digital
identification to improve security of internet transactions. Additional functions should
continue to be added in the
future.
Recently,
a number of corporations and government agencies began using smart cards
that include biometric identification, one of the most promising (and
controversial) applications of the technology. With a stored fingerprint or
retina scan on the card, a user can be positively identified, providing
increased security for access and commerce applications.
Timeline of Development (from previous
project)
Link to Previous Smart Card Project of 1998.
1974
 |
Roland Moreno, a former
reporter for Chimie Actualités and self taught inventor, devises a
revolutionary payment system. His brainchild is in fact an early
electronic stored-value application mounted on a ring. The idea is
simple: when the bearer needs money, he or she "loads" currency onto
the ring ; the electronic money thus available can be spent at
merchants that have the proper electronic payment gear. |
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Roland Moreno presents
his project to a few French banks. |
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The protected electronic
memory mounted on the ring connects to an electronic device. |
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The first demonstration
prototype of Moreno's electronic payment product included an
integrated circuit mounted on a ring and a device made of electronic
parts that could simulate a transaction.
|
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The first chip housed on
an epoxy card. The draft proposal for international "Embossed cards
specifications, numbering Systems, and Registration procedures" is
adopted, as well as as the one on magnetic stripes. |
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Epoxy card from a series
of cards made for Roland Moreno by CII-Honeywell Bull (now known as
CP8 Transac). |
1975
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First card in the
credit-card format, with the chip and its contacts on one side (made
by CII-HB). |
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Roland Moreno patents a
batch of inventions.
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1976
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Roland Moreno patents a
second batch of inventions. |
1977
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Bull CP8 is founded.
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Epoxy card housing 4Kb
of MOS memory in the form of CII-HB's 54 S573 integrated circuit.
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Bipolar DIL 4Kb memory
for simulator. |
1978
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Michel Ugon takes out
his first patents.
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Memory card built around
a Siemens SIKART chip : Identification and Transaction Card. |
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Operational card using
1-Kilobit of 2-ribbon TAB erasable memory made by Bull's DAN/SAI
division. |
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First card housing an
electronic microcircuit mounted on a ribbon using tape automatic
binding (TAB) technology (made byCII-HB).
|
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A team of senior
executives from four French banks finalizes a brief on the
industry's expectations and requirements formemory cards and
forwards it to CII-HB. The group is made up of: |
1979
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Schlumberger acquires a
15 % stake in Innovatron, the company created by Roland Moreno.
Schlumberger begins research into memory cards and sets up its
division "Cartes à Mémoires & Systèmes".
|
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Birth of the first
operational microprocessor card (two-chip card) by Bull CP8 - seen
face down, micromodule open. |
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The card houses a memory
chip and a microprocessor supplied by Motorola of the United States,
where managers, at firstreluctant to embark on this adventure,
finally gave the go-ahead after persistent lobbying by Marc Lassus
and famous designer Arturo Kruger. |
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The new product is built
around the 3870 model monochip and a 2716 model EPROM (addressed
through the monochip's parallel I/O ports) shipped from the U.S to
Toulouse. |
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Assembly took place
according to novel techniques developed by Jacques Villières at
Motorola's toulouse plant thanks to active support from Marc Lassus,
then head of linear division in Toulouse, and Arturo Kruger. |
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The device was mounted
on a plastic card and tested at Bull CP8's labs in Louveciennes.
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The LEP (Philips
Laboratories) design a prototype using Kapton technology. |
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Schlumberger increases
its stake in Innovatron to 34 % thus matching the percentage still
owned by Roland Moreno. |
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Bull CP8's two-chip card
: First public demonstration in New-York at American Express.
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Bid for tender by French
banks and the Direction générale des Télécommunications for an
interbank trial of the memory-card concept.
|
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By November 30, seven
manufacturers had placed bids : CII-HB, Dassault,
Flonic-Schlumberger, IBM, Philips, Transac, Thomson. |
1980
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The creation of the
Memory Card Group (Groupement Carte à Mémoire). Ten French banks and
the Posts Ministry have just formed a Group to study the possibility
of launching a new means of payment in France: the memory card. The
announcement of the Group's formation was made by Alain Le Corre,
General Director of the French banking association CSBP and the
Group's president, at the second annual EFMA convention. |
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The Group has chosen the
first three companies who will furnish the cards and the payment
equipment to be used in three experimental programs. They are:
CII-Honeywell Bull Flonic Schlumberger Philips Data System. |
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At the initiative of a
Lyon merchants' association, whose president is in charge of the
local FNAC book-and- media store, the city of Lyon is chosen as the
pilot site for smart card experiments in October 1980. Later, the
cities of Blois and Caen will also be chosen.
|
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The Group announces that
is has selected three manufacturers: CII-HB Flonic-Schlumberger
Philips. |
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The BNP, Crédit
Lyonnais, and Société Générale banks also join the Groupement.
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The Antiope subscription
card is developed by Télédiffusion de France.
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The first bi-chip CP8
microprocessor card appears: the "Cardiac pacemaker user identity
card". |
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The prototype of the
Philips bi-chip card, non-optimized lab version. |
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The prototype of the
Philips bi-chip card, optimized lab version.
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1981
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More banks join the
Groupement Carte à Mémoire, which now includes: |
The Banque de France, Banque Nationale de Paris
(BNP), Banque de Paris et des Pays-Bas (PARIBAS), Banques Populaires,
BRED, Caisse des dépôts et consignations, Crédit Commercial de France,
Crédit lyonnais, Crédit du Nord, The Posts and Telecommunications
Administrations, Groupe Crédit Industriel et commercial, Société
Générale, Union Nationale des Caisses d'Epargne de France
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A certain number of
private banks represented by the Banque Hervet. |
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A few months later, the
Société Générale leaves the group. But a major new member joins:
Crédit Agricole, in March, 1981. |
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The group decides to
launch experiments in Spring 1982 in three cities: Blois, Caen,
Lyon. |
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The Télétel experiment
in Vélizy is officially inaugurated by Louis Mexandeau, Minister of
Posts and Telecommunications. |
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Some 2,500 volunteer
households take part in this French videotex experiment. |
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Representatives of
several European banking institutions, meeting in Brussels at the
headquarters of the Crédit Commercial de Belgique, announce their
intention to create, on June 16th, an international association for
microcircuit cards. On that date, the presidency will be entrusted
to Gérard Narmon, CEO of Crédit Commercial de Belgique. |
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Called INTAMIC
(International Association for Microcircuit Cards), the association
brings together British financial institutions, represented by IBRO
and TSB, the Danish PKK, Austria's GABE, the Dutch Bankgirocentrale,
six Belgian banks, and the French banks belonging to Groupement
Carte à Mémoire.
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Card experiments get
under way at three sites: Blois, Caen, Lyon.
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Card produced by Gieseke
& Devrient for Flonic-Schlumberger. |
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First telepayment
experiment in the world in the town of Vélizy.
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Beginning of AFNOR
standardization.
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Philips supplies the USA
government with identification cards. |
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Color variations on the
Philips card for the American government.
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Birth of the first
mono-chip microcalculator card, the SPOM (Self-Programmable One-chip
Memory), developed by the Bull team under Michel Ugon. |
1982
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Along with the Vélizy
Télétel experiment, CFF launches its Videobanque home banking
service. |
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Still in Vélizy, BRED
launches a telepayment service using a smart card for customer
identification. |
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French Posts Minister
Louis Mexandeau inaugurates the Caen, Lyon, and Blois experiments in
France for the purpose of testing three different techniques
conceived by Philips, Schlumberger, and Bull CP8. |
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DGT orders prototype
memory-card booths from Flonic and CII-HB and Crouzet. Goal: 20,000
payphones per year starting in 1986 and 1 million cards. |
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A world first: 500 cards
are distributed at the EFMA congress in Monte-Carlo. Congress
delegates pay their expenses using the Bull CP8 smart card. |
1983
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The directing committee
of the Groupement Carte à Mémoire elects its new president:
Louis-Noël Joly, central director of Société Générale, who succeeds
Alain Le Corre. |
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Philippe Rousselet,
president of CANAL+, announces the launch of a study for a decoder
using a memory card. The announcement is made during a press
conference organized on the occasion of Agence Havas becoming a
shareholder in Sligos, a subsidiary of Crédit Lyonnais. |
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The Telecommunications
administration presents its "telecommunications card," which it
plans to make available to the public starting in January 1984, at
the SICOB. It is a subscriber card letting the subscriber place all
calls on his telephone bill. |
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That year, the DGT
counts 160,000 card payphones installed in France. |
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The Social Affairs
minister, Pierre Bérégovoy, announces the launch of two experimental
operations. Their purpose is to test the use of smart cards in the
health and social services sector. Two types of experiment are
planned: |
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In Blois, for the health
record booklets - more precisely the vaccination records - for a
population of 4500 children, and another involving the French
hemodialysis population. Every French hemodialysis patient would
have a smart card to facilitate their access to the 150 French
dialysis centers.
|
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The first card payphones
(PF32) are installed in France by Schlumberger. |
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The first payphone cards
are produced by Flonic Schlumberger for France Télécom. |
1984
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The French banks
announce their choice of a CP8 technology chip card manufactured by
Motorola and Eurotechnique (Thomson). |
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Specifications and
standards for the bank memory card are published by the Groupement
Carte à Mémoire.
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Compagnie Financière
acquires stock in Innovatron. The distribution of capital is as
follows: |
Schlumberger 34 %, Roland Moreno 34 %, Bull 15%,
Cie Financière 5%, other shareholders 12%.
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Bull and Philips sign an
agreement for Philips' use of CP8 components manufactured by
Motorola and Eurotechnique. |
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Bull CP8, a 100%
subsidiary of Bull. Its goal: set up an autonomous structure which
will manufacture the products developed by the mother company's
research departments.
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End of the IPSO
experiments at Blois, Caen, and Lyon. This also marks the end of the
Groupement Carte à Mémoire. |
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For the experiment, the
Norwegian banks install 40 electronic payment terminals on
merchants' premises, 15 card payphones, 10 bank card loading
machines, and 10 machines for card consultation using Minitel and
distribute 5,000 combination cards (stripe and chip). |
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Called Télébank, the
operation unites Bull - for the cards and payment terminals, Sligos
for developing the computerization system, Thomson-TITN for the
automatic calling system, Crouzet for the payphones, and Flonic-
Schlumberger for the prepaid payphone cards. The operation is led by
Bergen Bank. The new Eurotechnique memory card chip. |
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Startup of a memory card
experiment in Norway, at Lilleström, 25 km from Oslo. |
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It's Italy's turn to
launch a smart card application, using the TELLCARD card. Behind it:
Banca Piccola Valtellinese, backed by the Chambre Syndicale des
Banques Populaires.
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DGT has just ordered
50,000 memory card readers for connection to Minitels from a
consortium made up of: Bull CP8, acting as general contractor
Philips Radiotechnique, which is in charge of manufacturing the
readers CII-HB, which handles research and development. |
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The totality of the
smart card aspects are sub-contracted to Sligos. Delivery of the
readers is planned for early 1986. They will be shipped via
subscription, the cost of which is estimated to be 40 French francs.
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MasterCard International
hires the consulting firm of Arthur D. Little to do a study of the
feasibility and appropriateness of the French memory card. |
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A German bank issues a
call to tender for suppliers of a memory card. Constraint: alliance
with the German Giesecke, official supplier of the Eurocheque cards.
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1985
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Russel E. Hoog,
President of MasterCard International, signs an agreement with the
management of MCTI, the American subsidiary of Bull CP8, for the
launching of an experiment involving memory cards for a payment
application in the United States. The same agreement is made with
the American subsidiary of the Japanese Casio Microcard. |
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Visa International
announces the final development of the Super Smart Card: a chip card
including a keypad and a viewing screen.
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The CB bank card group
signs an agreement with Bull CP8 for supply of 12.4 million
microprocessor cards by the end of 1988.
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The Carte Bleue group
develops another function: the electronic token purse. It will be
able to be used to pay small sums as soon as the CB Blue Card is
equipped with a microprocessor. |
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The first electronic
token purse. Lyon Parc Auto entrusts the regional direction of
Crédit Lyonnais Rhône-Loire-Auvergne with implementing an electronic
payment system for the parking meters on public thoroughfares. The
system uses a memory card from Paymatec- Schlumberger, which also
provides readers that can be adapted to the latest generation of
meters. |
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CEPREM (Center for
promotion and research for European currency) proposes the issue of
a memory card which would be use the ECU. This card could be used in
the European Community countries for payment of services like
telephones, parking lots, tollways, or any other service in the
non-competitive services sector. |
1986
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By a decree of February
18th, the Defense Minister defines the cryptographic resources, such
as equipment and software, designed either to transform
non-encrypted information or signals into unintelligible information
or signals according to secret conventions, or to perform the
inverse operation.
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By this same decree, all
persons or entities in possession of cryptographic resources for
professional or private use are required to request the needed
authorizations from the administration within three months of the
official publication of the decree. |
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Thus, videotex services
applications using memory cards to provide message security will
first have to obtain approval from the French Postal and Telecoms
administration before being sold or used.
|
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CREG tests the memory
card with its new credit card. This is the first experiment carried
out by a financial establishment using private cards. Some forty
merchants belonging to the association "Les Boutiques de Chartres"
take part In the operation. |
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An audit of the memory
card experiments in France shows a total of 85,430,000 FF in aid
from public authorities for the period of December 1981 to October
1986. |
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The total aid granted by
public authorities - via the Telecommunications administration and
the Industry Ministry - reached 14 million FF for that same period,
or slightly more than 16% of the total. |
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250,000 bank smart cards
are in use. |
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Visa International
publishes the results of its microprocessor card study, done in
collaboration with the Bank of America, Royal bank of Canada, and
the French CB group. This study shows that the memory card can
increase the security and lower the cost of transactions. |
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A few months later, the
experiments on electronic payment by microprocessor card launched by
MasterCard International and involving the French Bull CP8
technology and Japan's Casio Microcard begin.
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In March, 14,000 cards
equipped with the Bull CP8 have been distributed to clients of the
Bank of Virginia and the Maryland National Bank, and 50,000 Casio
cards to clients of the First National Palm Beach Bank and the Mall
Bank. |
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MasterCard conducts two
studies: one, on the physical characteristics of cards, is entrusted
to the Arthur D. Little bureau; the other concerns the possibilities
of reading the microprocessor's secret area and is conducted by
Tecknikon. |
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Visa takes delivery of
the first two prototypes of the Super Smart Card, named ULTICARD, of
the two hundred it ordered to run a test with a few of its clients.
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These two prototypes are
made by the American company Smart Card International, founded and
headed by Arlen K. Lessin in 1983. |
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The latter had
previously been given the job of introducing French technology to
the United States at the expense of the Telecommunications
administration. |
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The Ulticards are
manufactured by General Instrument Corporation, Microelectronics
Division. |
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Michel Ugon is named
Chevalier of the Ordre National du Mérite.
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1987
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The memory card does not
cause a sensation at MasterCard. A steering committee meeting on
Sunday, January 18th decides that despite the good
impression the card's capabilities make on them, decide that certain
key areas - without saying exactly which - need to be analyzed in
more detail. |
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On June 23rd, the
members of the Groupement Carte à Mémoire decide to dissolve their
group, progressively transferring all its activities to the CB
group. |
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As of October 1st, 1987,
the chip bank card can be used in payphones. The agreement signed on
July 21st between DCT and the CB group provides that holders of a
bank card can use 140 basic units, or 107 FF worth, which will then
be debited from their bank account. |
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The issuing of bank
memory cards is being slowed. According to Crédit Agricole, |
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'The development plan
adopted by the CB group's direction cannot be implemented within the
time period and under the conditions prescribed.'. |
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The bank decides to
postpone delivery of the cards until June.
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Innovatron is licensing.
After Toppan Printing and Casio, Innovatron has just granted world
rights on its memory card patents to the Japanese printer Daï Nippon
Printing. These three licensees join the eleven others : Bull,
Schlumberger, Philips, Electronique CKD, Crouzet, Sligos, Ingenico,
Logicam, Ordicam, Microcard Technology, Smart Card International.
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Closing the forum on
"Financial Europe in 1992," organized by Charles Copin and René
Tendron, Former Finance Minister Edouard Balladur declares: 'We
should be prepared to take advantage of the opening of borders in
the area of means of payment and electronic transfer. Our advance,
notably in the area of microprocessor cards, should make it possible
for us to impose French technology at the European Community level'.
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Bank of America issues
memory cards for the 1,600 employees at its card banking operations
center in Pasadena, California. Standards
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ISO Standard 7816-1,
concerning the card's physical
characteristics. |
1988
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Bull CP8 plans to start
a joint venture with Daï Nippon Printing, who controls 50% of the
Japanese magnetic stripe card market. |
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Midland bank launches a
microprocessor card.
|
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The bank memory card
plan resumes. After much hesitation on the implementation of the
French microprocessor card payment system, the plan defined in 1985
seems to be readopted. |
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Société Générale's
president, Marc Viénot, feels that the advisability of setting up a
bank card payment system in France needs to be studied. |
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In a letter to his peers
in the APE, the president makes his argument in three points:
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First, the expected
revenue was not forthcoming, and further, the expenses engendered by
the operation of the card payment system are higher than was
predicted. |
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Secondly, the technical
problems encountered, especially the "chip killer terminal" affair.
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Finally, he feels that
the two networks, MasterCard and Visa, are going to develop a new
electronic anti-fraud system that will not use the French
technology. In other words, Société Générale's president is afraid
of launching a system that only the French banks will use. |
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ISO Standard 7816-2
concerning the role and position of the card's electrical
contacts. |
1989
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A Thomas Cook experiment
involves the use of a memory card as an electronic traveler's check.
|
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CANAL+, whose president
had been favorable to a memory-card decoding system, reconsiders:
Much too expensive'. Such was the conclusion of studies done by the
pay TV channel. |
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For its part, Gemplus
obtains a contract in Great Britain. The company, led by Marc
Lassus, will provide two pay TV channels, Sky Movies and Disney
Channel, with memory cards for subscriber identification. |
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New hope for
manufacturers. There is talk of putting the memory card payment
system program in France back on track. This is a great relief for
companies, notably Bull CP8, which had invested in the light of a
future generalization of the system. |
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After Brittany,
Provence, and Lyon-area residents, Parisians should now know the
joys of the PIN code.
|
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ISO Standard 7816-3
concerning electrical characteristics and exchange protocol
(T=0). |
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