End of the Smart Card (originally published 2002)

It was inevitable, even from a luddites perspective. Recent history has been guiding us with rapid transitions from mainframe to PC, desktop to notebook, and landline to wireless technology, and we have been taunted with shorter and shorter product life cycles. Breaking news today becomes obsolete technology tomorrow. Yet with all these indicators fore warning of rapid change towards integrated, wireless solutions, we still load up each day with an extraordinary variety of bulky communication and IT equipment, and a wallet of plastic cards. This is about to change, as a result of recent developments in Singapore and the UK.

By the second quarter of this year, we will be able to replace a hand phone, a wallet of plastic cards, a PDA (Personal Digital Assistant), and hard cash, with a single combo device servicing much of our communication, mobile computing, and e-cash transaction requirements. In March, Singapore will launch the first trial mobile phone capable of empowering users to shop, pay for entertainment such as restaurants and movie tickets, and car park charges, using a microchip embedded in the phone. DBS Bank and three mobile phone operators, including Nokia, will be participating in the project. The wireless payment transactions can either be routed to debit a user bank account, e-cash card, or credit card. Settlement will be initiated by using the latest developments in the Short Message Service (SMS), Wireless Application Protocol (WAP), Infrared, and Bluetooth technologies.

In parallel with developments in Singapore, Handspring introduced to the UK and East Asian markets in January the first lightweight PDA with a built in cell phone. Called the Treo, the device is designed for Global Systems for Mobile Communication (GSM) mobile transmission technology. Palm is also planning a similar PDA/Phone launch. Integrating PDA, email, and phone is considered the focal point for development amongst PDA manufactures. Sagem and Mitsubishi are already promoting earlier generation (heavier, larger) models, and Samsung and the British wireless operator, O2 are planning model launches this year. By midyear, the market is expected to be awash with new integrated mobile devices.

All this signals the end of mobile phones and PDA’s as we know them; functionality will be merged. More significantly, the developments heralds the end of the Smart Card. Plastic cards were an ideal medium to support ‘magnetic stripe’ technology. The significantly more intelligent microchip technology no longer requires a plastic card to support processing. As we are now seeing, the microchip is migrating to the multi functional, multimedia environs of the mobile phone. The Smart Card is destined to become redundant in its infancy. This presents an interesting conundrum for banks and governments, who have been struggling with Smart Card technology for years. To banks, the Smart Card represented a Trojan Horse seething with competitive threats from new fringe banking operators. It was ignored by bankings high priests as a nasty apparition of the future! Banks, for all their past pontificating and procrastination must now face up to the reality that these developments in mobile wireless technology (specifically as they effect E-Commerce) will further erode the boundaries of their traditional business empires.

Governments on the other hand have longed for the ID card potential that the new Smart Card technology can deliver, but they haven’t been able to access it (in most cases) due to privacy protection policies. This may have been their saving grace! Those governments that haven’t already adopted Smart ID Card solutions stand to steal a march on those that have, and in so doing, save millions in taxpayer dollars.

Smart ID Cards, such as the MyKad already being implemented in Malaysia, and a similar ID card proposed by the Hong Kong government, use digitised fingerprints (minutiae) recorded onto a microchip which is embedded into the ID card. Both cards will contain other applications besides ID. The number of applications is only limited by the size (and therefore processing capabilities) of the microchip. The MyKad for instance, uses a 32kb microchip embedded in the card for multiple application processing (Passport, National ID, Driver License etc). Larger 64kb microchips are already being designed to support a greater number of applications that can also be dynamically added, amended, or deleted by the owner. However, both the MyKad and the proposed HKID will be outdated by the time roll out is complete. They will be outdated for two reasons. Firstly, all the information they contain, including biometrics data, will be available on a microchip that can be embedded in mobile phone combos. Available that is, as long as we all carry a mobile phone combo! But, what if we don’t? It becomes irrelevant, as the authorities certainly will, and that is the second reason why the cards will be redundant. If we take guidance from the recent rate of technology change, within two years, the processing capabilities of the microchip, coupled with continuing developments in wireless communication, will obviate the need for any of us to carry ID. Our unique biometrics will be our ID, and can easily be read by existing biometrics readers carried by authorized personnel (police, immigration officers etc.,) using a microchip in ‘their’ mobile device. The captured minutiae could then be compared with possible ‘hot lists’ of offenders stored on the microchip, and/or with records maintained on a centralised database accessed through the combo device. Bingo, ID check made, and no need for the despised ID card (or the enormous taxpayer expense to implement it).

© 2002 Grenville P Mills

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