Who is pioneering Smart Card development?
Presently, about 90% of all smart-card sales are in Europe. Therefore the primary leaders in the industry are European companies. Companies such as Schlumberger, SGS-Thomson and Gemplus. The Americas and Asia account for 2% each, and the rest of the world about 6%, according to Dataquest. This dynamic is about to change. By 2001 the European share should drop to 50% and the rest of world to 5%, while Asia grows to 25% and the Americas to 20%. As a result of the expansion of these markets, new pioneers are beginning to pave the future for smart cards.
Practically every large technology company, be they retailers, wholesalers or manufacturers, is trying to jump on the smart card band wagon. Presently US3, Inc. is the largest manufacturer on smart card in the United States. However that may change. In March of 1997, IBM, Oracle, Netscape and Sun Microsystems announced a partnership that would facilitate the use of smart cards as a method of network security. Two heavy-hitters have already committed in a big way to spreading the concept of smart cards for electronic cash in the United States. Visa International, the world's largest credit card company, and Mondex, a worldwide electronic cash payment scheme developed by National Westminster Bank and British Telecom which also serves as the new card technology provider for MasterCard have joined forces with the two largest banks in the United States -- Citibank and Chase Manhattan -- to launch a consumer pilot program for chip-based stored-value cards. In the pilot, slated for launch late this year, Chase and Citibank will issue about 50,000 reloadable smart cards that can be used at approximately 500 participating merchants in the Upper West Side of Manhattan. As well, Motorola has just announced in March of '97 that they plan to embrace smart card production and intend on capturing a significant share of the market. It is still unclear whether large companies, like Visa and Mondex, will rely on existing, proven card manufacturers like US3 or fall back on existing partnerships with technology manufacturers such as Hitachi or Motorola, who are entering the smart card manufacturing arena.
Hardware companies aren't the only ones trying to stay ahead of the pack. Microsoft, together with Bull CP8, Schlumberger, and Siemens Nixdorf Information Systems, have created the Microsoft Internet Security Framework (M-ISF). In its current 32-bit operating systems, Microsoft is shipping a cryptography application programming interface that allows for smart cards to interface to the operating system for transactions over the Internet. The M-ISF is working to define smart-card specifications beyond what the ISO defines. In addition, Mastercard and Visa are working separately toward a series of Internet-based protocols that will allow smart cards to ensure the security of online transactions. Dubbed SET, Visa's Secure Electronic Transactions would ensure security for online transactions, estimated at 12 million last year. SET would allow a smart card to act as the basis for a digital certificate - a secure electronic purchase order that could be verified by the merchant, the card issuer, and Visa.
As well, it is not just large companies that are vying for a share of the market. There are many small and medium size companies that are trying to carve out a niche in the smart card market, along every point of the value chain. From smart card consultants to smart card reader manufacturers, companies are leading the charge into the new smart card era. The Smart Card Resource Center has a comprehensive list of leading pioneers in the smart card industry.