--- begin forwarded text
Sender: e$@thumper.vmeng.com
Reply-To: iang@hotlava.net
Precedence: Bulk
Date: 6 Jun 1997 15:20:35 -0000
From: iang@hotlava.net
To: Multiple recipients of
Subject: First shots in Smart Wars
Folks,
the smart wars have started. This recently erupted in the Dutch press
after bubbling along in the committee rooms for the last year.
What follows is a translation and I may have lots of errors in there...
This is significant because it signals a new phase in the industry of
head-to-head competition for reputation and market share, using all the
FUD and scare tactics that big ignorant players have available to them.
At this point we can conclude that anyone who is not already fielding
systems has probably missed the boat. Although this is only a boat
travelling up the Amstel for now, there are some famous people waving
tearfully from the wharf.
It doesn't necessarily mean the end of DBBs as they are a concept
that promise efficiency gains over the current mechanism. But it
does mean that it will be a long drawn out battle, as any usage of
same must be supported by other innovations in order to compete with
large, well-heeled and scared competitors.
iang
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On Wednesday, Postbank announced introduction of the combined debit-card
and Chipper-chip with two codes: one PIN code (as meant in ISO 9564-1) and
one chipcode (10202-6). The PIN code is for debit-cards with magstripe and
the chipcode for using the smartcard functionality (including purse). They
stated that using two codes was a requirement from the central bank and
that they were suprised that the other smartcard initiative (chipknip) was
allowed to use only one code for both debit-card and purse-application.
DNB (the Dutch National Bank) were asked for comment (Wednesday) and they
denied that they instructed Postbank to use two codes. Postbank did not
want to explain any further in the open press about why they chose 2 codes
and kept on referring to DNB. Meanwhile a spokesman for RABO, one of the
banks in the competing initiative, spoke out publicly (and frequently) that
chipknip only used one code and that there was no requirement to use two
codes for the two applications. The spokesman also stated that it would be
possible to use this one code in a user's smart card "home-loading" devices
(the so-called 'chipknipper').
On Thursday (so in the Friday newspapers) DNB informed the press that DNB
uses international standards as a reference point in their review of card
schemes. Operators of schemes make their own decisions within the framework of
these standards. DNB only checks, depending on the choice made, which part
of the standards apply and whether the implementation complies to the
relevant part of the standard. The ISO-standards used will basically relate the
use of a code to the security level of loading device. If a scheme operator
chooses to synchronize the chipcode with the PIN-code, the more stringent
PIN-code protection regime applies for that chipcode: it should be
physically secure instead of merely tamper-evident.
DNB stated that in the case of PIN-synchronisation one could view the use of
loading terminals in or attached to banks as compliant with the ISO
standards. DNB also stated that in the case of PIN-synchronization it had
not been demonstrated that other (home-loading) equipment would comply with
the requirements in the international standards.
Volkskrant, the Dutch daily newspaper, concluded that RABO might want to
reconsider using one code, since the use of this code in a home environment
did not seem to comply with international standards. Trouw, another daily,
analyzed that in the chipcard battle Postbank had scored a point as they
were able to use their chipper in home environments with the chipcode and
other banks obviously were not in that position. RABO meanwhile continued
to state that they would roll out the home-loading devices at the end of
the year and that these devices were technically superior, which would be
the reason that no other code was necessary.
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