Smart Cards and iButtons

What is a Smart Card?
A smart card is a credit card sized piece of plastic with a small, embedded computer chip that can be programmed to perform tasks and store information.

Smart cards currently are used in telephone, transportation, banking, and healthcare transactions, and soon we'll begin to see them used in Internet applications. Smart cards are already being used extensively in Japan and Europe and are gaining popularity in the U.S.

Several standards have bee introduced that may speed up the acceptance of using smart cards for both off-line and on-line purchases.

Microsoft has introduced PC/SC, a smart card application interface for communicating with smart cards from Win32-based platforms for personal computers. (Windows 98 Revision 2, NT 4.0, 2000, 2003, XP and ME).
OpenCard is an open standard that provides inter-operability of smart card applications across handhelds, POS, desktops, laptops, set tops, and so on. OpenCard promises to provide 100% pure Java smart card applications. OpenCard also provides developers with an interface to PC/SC for use of existing devices on Win32 platforms.
JavaCard was introduced by Schlumberger and submitted as a standard by JavaSoft recently. Schlumberger has the only Java card on the market currently, and the company is the first JavaCard licensee. JavaCards enable secure and chip-independent execution of different applications.

Advantages of using a Smart Card

A Smart Card is more reliable than a magnetic stripe card.
A Smart Card currently can store a hundred times more information than a magnetic stripe card.
A Smart Card is more difficult to tamper with than mag striped cards.
A Smart Card can be disposable or reusable
A Smart Card is compatible with portable electronic devices such as phones, personal digital assistants (PDAs), and PCs

How Do You Use a Smart Card?
There are five types of smart cards: memory cards, processor cards, electronic purse cards, security cards and JavaCard. To communicate with a PC or internet terminal, smart cards can be plugged into a reader attached to the machine or they can operate using RF radio frequencies. You also need software to operate the reader.

The reader provides a path for your application to send and receive commands from the card. There are many types of readers on the market, the most prevalent being the serial for desktops and PC Card readers for laptops. So by adding a smart card reader to your computer, smart card technology can be used for online purchases.

Who Uses Smart Cards?
Over a billion smart cards are already in use, mostly in Europe. A research study forecasts a $26.5 billion market for recharging smart cards by 2005. Compaq and Hewlett-Packard are reportedly working on keyboards that include smart card slots that can be read like bank credit cards.

Will they become ppopular in the US?
With all the recent publicity about the problems created by identity theft, I expect smart cards to become more common in the future since they offer greater security than normal credit cards. With smart card use, each user's PC becomes a credit card machine that can't be used without the physical credit card. As a result, financial intuitions will be assuming less risk than currently and online merchants may be able to qualify for the lower discount rates enjoyed by the brick and mortar stores.

For more information on how to use smarts cards in your business, I recommend reading Smart Cards: Seizing Strategic Business Opportunities by Catherine A. Allen, William J. Barr and Ron Schultz. The book is basically a primer on how to use smart card technology in business aimed at business people rather than software developers.

What is an iButton?
An iButton is a microchip similar to those used in a smart card but housed in a round stainless steel button. The iButton was invented and is still manufactured exclusively by Dallas Semiconductor mainly for applications in harsh and demanding environments.

Like a smart card, an iButton does not have an internal power source. It requires connection to a reader (known as a Blue Dot Receptor) in order to be supplied with power and to receive input and send output.

iButtons can store an electronic IDs for physical access to buildings and store e-cash for purchases both in stores and via the Internet. For e-commerce applications, the iButton can support JavaCard 2.0/OpenCard standards in addition to proprietary software.

iButtons have an advantage over conventional smart cards in term of durability and longevity. The stainless steel casing gives iButton a far greater ability to survive a range of temperatures and a much harsher environment (such as being left on the front seat of a car in 90 degess weather or exposure to salt water) than the plastic smart card. For e-commerce and personal ID usage, iButtons can be mounted on a range of personal accessories such as a watch, ring, key chain, or necklace.

Currently iButtons are used in Turkey as an e-purse for the mass transit system, in Argentina and Brazil for parking meters and in the United States as Blue Mailbox attachments.

Although I don't expect to see iButtons in common use in the near future, they are a technology to be considered as a future possibility.

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