Also see: http://www.zdnet.com/pcweek/news/0112/12bio.html ---guy --------------------------------------------------------------------- This article is from Internet Computing (http://www.zdnet.com/icom/). Visit this page on the Web at: http://www.zdnet.com/icom/content/anchors/199802/02/smarten.net/ --------------------------------------------------------------------- [ Features ] February 02, 1998 Smart Cards Smarten the Net By Albert Pang For many contractors to the U.S. Department of Defense, the Internet will become an important ally this year, helping them resolve one of the most daunting challenges when doing business with the government: Getting paid on time and with a minimal amount of hassle. Thanks to a new breed of smart cards backed by sophisticated Web applications, 200 defense contractors will start receiving electronic checks (e-check) from the government via secure Internet e-mail through a pilot program launched in January 1998. The contractors will use their smart cards to access the mail box, validate, and endorse the checks. They will then forward the checks to BankBoston or NationsBank, the two authorized banks, that will deposit them into their accounts. The smart cards, which include digital certificates developed by GTE Cybertrust, will play a critical role in helping the defense department and other agencies comply with a mandate that requires most of the 800 million payments the government makes every year be converted to electronic form by January 1, 1999. Because of the mandate, the number of smart-card applications in different stages of development within the government has doubled to more than 900 in the past year, says Jim Hagedorn, a spokesperson for the Treasury Department. That's good news for vendors such as Anthony Caputo, chairman of Information Resource Engineering (IRE) in Baltimore, which develops the smart cards and the readers for the e-check program. "It will create a nice revenue stream," Caputo says, adding that his company has issued 100,000 smart cards to government and corporate customers mostly for use in private networks. Now with the Internet, the smart card market could grow substantially, especially in Asia and Europe. "Smart cards are the ultimate personal network computers," capable of handling everything from simple tasks such as identification to complex ones such as online banking and electronic commerce, says Philip Yen, senior vice president of chip platform at Visa International in Foster City, CA. [TABLE NOT SHOWN] Both Visa and its rival MasterCard are engaged in smart-card pilots around the world, promoting the use of stored-valued chip cards that run on private networks or the Internet. For example, AT&T Universal Card is working with Mondex, the electronic cash venture majority-owned by MasterCard, to sign up a small number of online merchants for a pilot program that will allow Internet users to buy products from them using smart cards issued by AT&T. However, analysts expect acceptance of smart cards in the United States to be slower than that in other countries because of privacy concerns, interoperability issues (Visa and MasterCard use different operating systems, for example), and the desire to put as many complex applications as possible on a single card. Albert Pang is the online editor of the Internet Computing MagaSite Send e-mail to apang@zd.com. --------------------------------------------------------------------- Copyright (c) 1998 ZDNet. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of ZDNet is prohibited. ZDNet and the ZDNet logo are trademarks of Ziff-Davis Inc.