Expanded Smart Card Interfaces

SCM Microsystems, Inc. announced Monday the extension of its smart card interface product line to include universal, standards-based smart card readers for RS-232 and USB interfaces. SCM Microsystems now provides complete solutions for enabling smart card use in virtually any computing environment. Several versions of the readers will be available, including Plug and Play RS-232 and USB readers, a B1 compliant RS-232 reader, and an RS-232 reader with the ability to attach a serial mouse. All of SCM Microsystems’ smart card interface products integrate SmartOS(TM) technology which maximizes interoperability while preventing obsolescence. The first production units of these new readers will ship in Q2 of 1998.

“Our product line is now more adaptable and cost-effective for our OEM customers,” explains Steven Humphreys President and CEO of SCM Microsystems. “By focusing on interface technology, SCM Microsystems frees our customers of ongoing development costs and worries of incompatibility.”

SCM Microsystems has recently announced two activities which will contribute to the success of its smart card interface product line. First, a plan to acquire Intellicard Systems of Singapore, the manufacturer of some SCM products, was announced on March 10, 1998.

This agreement will help the company manage costs. Next, a development and manufacturing agreement with Gemplus, the world’s leading provider of plastic and smart card-based solutions, was signed and announced on March 25, 1998. This agreement, along with several other OEM customers, help achieve economies of scale to reduce costs.

SCM Microsystems’ smart card interface products can communicate with all ISO 7816 smart cards, providing an ideal interface for multi-function environments.

The readers support open standards including PC/SC, OpenCard and CT-API and can be used on a wide variety of operating systems including Windows 95, Windows NT, Windows CE and JavaOS.

About the Company

SCM Microsystems, Inc., with headquarters in Los Gatos, California, European headquarters in Germany, research and development centers in Germany and France, and offices in Japan and Singapore, is a leading provider of products and technologies which give individuals the ability to quickly and securely control access to, and effect the exchange of, digital information. By bridging smart cards and other secure devices with PCs and workstations, SCM Microsystems provides cost-effective solutions for conditional access to mobile, handheld and desktop computers, workstations, digital video broadcasts, virtual private networks, electronic files, e-mail and Internet firewalls. For additional information, contact SCM Microsystems in the United States at 408/370-4888 or in Europe at 49-84-418960 or e-mail [adapter@scmmicro.com][1]. The company maintains a Web site at [http://www.scmmicro.com][2].

[1]: mailto:adapter@scmmicro.com
[2]: http://www.scmmicro.com/

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Schlumberger Multos Cards

Schlumberger said Monday it will offer ‘Multos’ smart cards in its product portfolio and has acquired a license to develop applications for the MULTOS operating system. Schlumberger can now offer its large existing customer base applications such as loyalty, incentive programs, ID and ticketing, as well as the ability to convert or create application software for use on any MULTOS card. These applications can be loaded on the Multos platform beside Mondex e-purse and/or MasterCard EMV Debit/Credit application. These applications may be added to MULTOS cards after they have been issued.

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MS NT 5.0 Smart Cards

Schlumberger today announced the introduction of smart card products that support the Microsoft NT5.0 platform.

The products, which include smart cards, readers and PC software enable software developers, value added resellers (VARs) and corporations to roll out comprehensive enterprise security solutions based on the Public Key Infrastructure (PKI) in Windows NT5.0. These products support the PC/SC Workgroup specifications providing opportunities to leverage new applications across a large platform base.

The Schlumberger products integrated with the NT5.0 platform include
—   Cryptoflex(TM), the industry’s leading cryptographic smart card
     with strong 1024-bit RSA security
—   Reflex(TM) 20 PCMCIA reader
—   SafePaK(TM), a client PC package for information security
     supporting Microsoft Internet Explorer 4.0, bundling the above
     card and readers and associated software to personalize/customize
     the smart card . This package, along with the Microsoft software
     developers kit (SDK), also serves as a development kit for VARs
     and other software developers.

Access software for Cryptoflex and Reflex 20 is included in the NT5.0 package. “We are pleased that Schlumberger is delivering smart card products for Microsoft NT5.0,” said Dave Thompson, director of development at Microsoft. “This will enable our mutual customers to take advantage of the enhanced security and convenience of smart cards to design and build unique new applications for a wide range of market segments based on the Windows NT5.0 platform.”

“Smart cards are the most personal, secure and portable computing device,” stated Paul Beverly, vice president of marketing, Schlumberger Smart Cards & Terminals.

“Integration of this product with NT5.0 enables implementation of scaleable IT security across the enterprise. The products that we are introducing show the power of smart card technology to bring the best security, privacy and portability to PC applications. The smart card-enabled PKI infrastructure will help drive growth of smart card usage in a range of markets, including electronic commerce, health and ID.”

Cryptoflex and Reflex 20 are being demonstrated at CardTech/SecurTech at Microsoft and Schlumberger booths. In addition, Litronic Industries, Inc., a Schlumberger associate, and SCM Microsystems are demonstrating the Windows NT5.0 single sign on application with the Cryptoflex card in their booths. “As a strategic partner of Schlumberger, this announcement is important to Litronic because it enables us to leverage Schlumberger technology in the development of our NETSIGN smart products on the NT5.0 and other Microsoft platforms,” stated Richard M. Depew, director, Strategic Markets, for Litronic Industries, Inc.

“As a Schlumberger Associate, we will build on their market-leading smart card technology to take network security applications for our customers to the next level.”

“While the single sign-on feature of Windows NT 5.0 demonstrates the benefits of smart cards in a PC environment, it also shows a real-world implementation of the efforts of Schlumberger, Microsoft, SCM Microsystems and the PC/SC Workgroup in general,” stated Aaron Zitzer, worldwide product manager — Smart Card Interface Products at SCM Microsystems. “We see this as the first in a new wave of smart card-based security and electronic commerce solutions for the PC.”

Each of these products is built on the PC/SC Workgroup specifications, developed by the leaders in smart cards and PC hardware and software. The specifications provide a uniform API for smart card readers and smart cards themselves when used with personal computers.

About Schlumberger

Schlumberger Smart Cards & Terminals offers a flexible portfolio of smart card-based solutions for businesses and communities of all kinds. The company provides cards, terminals, development tools and support in open configurations for operators, developers, integrators and distributors worldwide. Under The Smart Village(R) brand, the Schlumberger offer includes the milestone Cyberflex card, the industry’s first Java(TM)-based smart card. The Smart Cards & Terminals group operates 45 facilities in 34 countries across the globe. Additional information is available on the World Wide Web at [http//www.slb.com/et/][1].

Schlumberger Smart Cards & Terminals is a business segment of Schlumberger Limited, a $10.65 billion global technology service company providing oilfield services, natural resource management, transactions based technology and associated systems, and semiconductor test equipment.

[1]: http://www.slb.com/et

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Gov Version Multos

MasterCard International announced Monday that MasterCard issuers participating in the GSA Master Contract for card services will now have access to Constructive Key Management, a data encryption application developed by TECSEC Inc., that will run on a MULTOS chip. TECSEC is the first applications developer to unveil plans to bring a MULTOS-based security application to market. TECSEC expects to have their MULTOS-based version of CKM available by year-end. MasterCard entered into yesterday’s agreement with TECSEC in support of MasterCard GSA issuers including First Chicago NBD. The issuers will be granted exclusive rights to TECSEC’s CKM smart card application for their MasterCard-branded travel, purchasing, fleet, or integrated cards issued under the GSA Master Contract.

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Transaction System Acquisition

Transaction Systems Architects announced today that it has signed a definitive agreement to acquire IntraNet, Inc., of Newton, MA.  Transaction Systems will acquire all of the issued and outstanding shares of IntraNet in exchange for approximately 1.225 million shares of  TSA common stock. IntraNet is a leading provider of electronic payment systems for the worldwide banking community. The company’s Money Transfer System (MTS) and CACHE application software products are used by nearly half of the 50 largest U.S. banks and by financial institutions in Europe and Australia.  IntraNet products provide the critical payments processing infrastructure that keeps money moving across town or around the globe.

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ICVERIFY & MS Site Server

ICVERIFY also announced Monday that its popular NetVERIFY software now works with Microsoft Site Server 3.0 Commerce Edition. Merchants use NetVERIFY to process and settle transactions for all major card brands as well as Mastercard or Visa-branded debit/check cards. Transactions can be processed from the Internet in real time or batch mode. Site Server 3.0 Commerce Edition helps Windows NT-based web developers and Internet Service Providers (ISPs) address complex e-commerce requirements.

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VISA Java Card

Symantec Corp.  announced Monday that work has begun with Visa International and Sun Microsystems to integrate ‘Java Card’ technology and ‘Visa Open Platform’ libraries within the popular Visual Cafe for ‘Java Rapid Application Development’ environment. The integration will give JavaCard developers the ability to build applications that support Visa’s libraries as easily as they build Java desktop applications today.  The Java Card API enables a new generation of networking capabilities for payment cards, electronic commerce, network access, affinity programs, gaming applications and authentication — capitalizing on the power of smart card technology.

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Vital Honored

Vital Processing Services was honored with the Commitment to Caring Award by the Valley of the Sun United Way and the Gold Award by the United Way of the Chattahoochee Valley, Georgia.

Vital was one of three organizations honored with the Commitment to Caring Award at a recent Valley of the Sun United Way Awards Ceremony held at the world-renown Phoenician Resort. The Awards Ceremony is an annual event held to recognize organizations that significantly contributed to the yearly campaign. Nearly 90 cents of every dollar donated goes directly to fund one of 300 charities or programs in the metro-Phoenix community.

This year, the Valley of the Sun United Way raised a record-breaking $35 million, a 16 percent increase from 1996.  These results catapulted the Valley of the Sun chapter to one of the top five United Ways in the country. Vital was key to that success, contributing an increase of 216 percent over its 1996 campaign.

One of Vital’s more popular fundraisers is an annual Golf Tournament where its clients, local celebrities and athletes, friends, employees and their families teed off to raise more than $14,000 this year.  In addition, Vital’s employee donations grew 444 percent over its 1996 campaign.

“Vital has always been a responsible and active corporate citizen, and the United Way is a perfect example of our commitment.  We are proud to receive the United Way’s prestigious awards.  Our employees look forward to making an even greater contribution to the Phoenix and Columbus communities next year,” said Fred Gumbel, president and CEO of Vital.

For Vital’s contribution to this year’s campaign in Columbus, Dick Hagan, vice president and campaign director for the United Way of the Chattahoochee Valley, presented Fred Gumbel with one of the United Way’s highest awards, the Gold Award, at a recent Vital employee forum.  Vital increased its contribution by 473 percent over last year.

Out of 250 companies, Vital was one of 34 companies to achieve the Gold Award.  The criteria for the receiving the Gold Award is that a company has more than 60 percent employee participation, more than 10 percent increase in employee per capita giving, a minimum of $100. donation per employee with one or more employees making a $1,000. or more donation.

The United Way of America, the national office, is headquartered in Alexandria, Va.  There are approximately 2,000 community-based United Way organizations.  Each is independent, separately incorporated, and governed by local volunteers.  The system began in 1887 in Denver and was once known as “Community Chest.”

Vital Processing Services (Vital) is a leading full-service merchant processing company.  Its clients include financial institutions that provide credit card processing to their merchant customers.  Headquartered in Tempe, Ariz., Vital offers financial institutions operational services that enhance business solutions without competing for their merchant business.  Its services include merchant POS products, electronic authorization and data capture; clearing, settlement and exception processing; merchant accounting, billing, and reporting; operational fulfillment services (including the outsourcing of chargeback and retrieval processing); risk management; and customer service.  Vital is a merchant processing joint venture of Visa(R) U.S.A. and Total System Services, Inc.(TSYS(R)) ([http://www.totalsystem.com][1]).  Vital’s Internet address is [http://www.vitalps.com][2].

[1]: http://www.totalsystem.com/
[2]: http://www.vitalps.com/

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Easyflex & FastOS

Following its successful launch in Europe and South America, Schlumberger Smart Cards & Terminals is introducing the Easyflex smart card with FastOS operating system in North America. Serving as an electronic passport for access/identification and transportation applications, the innovative Easyflex card combines conventional contact-based transactions requiring a card reader with contactless operation — all in a single smart card chip. The flexible, dual-interface technology allows an issuer to customize the card to meet multiple needs. For instance, corporations can use the Easyflex card as an employee ID card to provide secure, fast access to buildings and computer networks, as well as for stored value transactions at on-site cafeterias and vending machines. The card is also ideal for transportation, since operators can issue the card as a ticket, and also link it with other card systems for additional applications, such as retail, banking and e-purse transactions.

“Transportation operators worldwide are beginning to understand the advantages of smart ticketing technology,” stated Jonas Andersson, business segment director, Schlumberger Smart Cards & Terminals. “The flexible architecture of the Easyflex card and its FastOS operating system allow issuers to immediately take advantage of a more efficient means of ticketing, while providing development options for other types of future transactions.”

Innovative Easyflex Projects Underway in Europe and South America

Brazil — EasyFlex Combines Identification, Transport and Financial Transactions

With 1.5 million citizens, Curitiba, Brazil is beginning a city-wide program that will put Easyflex smart cards into the hands of its entire urban population. During phase one, 30,000 municipal employees will be given a smart card which functions as a local government ID and access card, a payment card for retailers and a passport to preferential services with a participating bank.

These applications will be followed by electronic ticketing for local bus services, which will operate in contactless ‘walk by’ mode. Starting in 1998, the program will be extended to families of municipal employees, and then to the city’s entire population, making Curitiba the world’s first city-wide showcase for the convenience and flexibility of smart cards.

According to government officials, this smart card program reduces costs and speeds the development of Curitiba’s commercial infrastructure, helping to make major improvements in the quality of life in this major commercial center in Southern Brazil.

Finland — Easyflex Links Nationwide Bus Network

Easyflex is providing Finland’s diverse bus network with a single card solution that can be used for nationwide travel on ticketing systems ranging from high-speed contactless terminals used by mass transit operators in major cities, to contact card terminals used on most rural and inter-urban routes. The program provides a common card and clearing service for a network of more than 400 bus operators. A successful user of contact-based smart cards for nearly five years, the Matkahuolto system is switching to Easyflex to accommodate operators who want to use higher-speed contactless cards and terminals.

Easyflex cards can contain just a ticket and the associated administration data, or an electronic purse, which can be used anywhere on the network for buying tickets or for reloading the stored value. One of the key features of the Easyflex card is a high level of security for reloading the electronic purse. Matkahuolto plans to extend the e-purse capability to additional transactions in its transport network, such as refreshments and newspapers.

FastOS — the Flexible Operating System for Wireless and Contact-based Transactions

Easyflex features the powerful new operating system from Schlumberger, FastOS, which enables the wireless and contact-based transactions to run side by side. Easyflex and FastOS build on Schlumberger expertise in both the contactless radio-frequency proximity card market, and in the mainstream contact smart card sector.

The Easyflex contact interface draws on the Schlumberger world-leading Multiflex(TM) technology, which has formed the basis of numerous payment card applications for world-leading banks and credit card companies. The contactless radio frequency (RF) interface is compatible with the Mifare protocol, a technology which currently accounts for around 90 percent of the world’s contactless electronic transport ticketing applications. The FastOS operating system is compatible with the complete range of emerging industry standards for transport cards — including ISO14443A contactless operation), prENV1545 (data structures), and IATA’s specification for airline travel — and with key standards in the mainstream card environment, such as ISO7816, the EMV payment specification, and prENV1546 for e-purses.

About Schlumberger

Schlumberger Smart Cards & Terminals offers a flexible portfolio of smart card-based solutions for businesses and communities of all kinds. The company provides cards, terminals, development tools and support in open configurations for operators, developers, integrators and distributors worldwide. Under The Smart Village(R) brand, the Schlumberger offer includes the milestone Cyberflex(TM) card, the industry’s first Java(TM)-based smart card. The Smart Cards & Terminals group operates 45 facilities in 34 countries across the globe. Additional information is available on the World Wide Web at [http://www.slb.com/et/][1]. Schlumberger Smart Cards & Terminals is a business unit of Schlumberger Limited, a $10.65 billion global technology service company providing oilfield services, natural resource management, transactions based technology and associated systems, and semiconductor test equipment.

[1]: http://www.slb.com/et

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Industry Pulse

March may turn out to be a turning point for the card industry as delinquency and chargeoffs stabilized while yields continue to climb. The bankruptcy component of chargeoffs declined for the second consecutive month. Meanwhile annual fees, late fees and over-limit fees are still spiraling upward as average card interest rates turn south for the fourth straight month. The good news comes from the April issue of Card Management Information Services’ ‘Bankcard Barometer’.

                             INDUSTRY  STATS
      Standard APR:     18.76%           Delinquency:      5.41%
      Standard Fee:     $18.25            Chargeoffs:       5.54%
      Gold APR:          17.83%           Bankruptcy:      40.2%
      Gold Fee:         $35.34            Attrition:        8.24%
      Late Fee:         $19.38            Fraud Losses:     0.18%
      Overlimit Fee:    $18.59            Yields:          13.46%
        Source: Bankcard Barometer, April 98 issue

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