Friday, November 2, 2001

Terrorist attacks revitalize interest in ‘smart cards’
By Doug Bedell and Paula Felps
Dallas Morning News

DALLAS (KRT) — The attacks of Sept. 11 have rekindled calls for a national identification card — a “smart card” containing embedded personal information.

lthough even smart cards can be forged, many see them as an important tool in the fight against terrorists.

The White House has ruled out creating a national identity card system as a counter-terrorism measure.

But an airline industry task force, advising Transportation Secretary Norman Mineta on ways to prevent terrorist attacks aboard airliners, is suggesting a national transportation card that officials say would make flying safer — and would revamp airport ticket counters.

A card could be embedded with the traveler’s picture and/or a fingerprint, which would have to match with the person who walks up to the ticket counter. The card also would contain the passenger’s flight history, address and phone number.

Proponents of a national ID system argue that people must prove their identity now, using a driver’s license and Social Security number, yet both are forged easily. But not everyone agrees with the concept.

“It’s contrary to the spirit of America,” said Edward Crane, founder and president of the libertarian CATO Institute. “We shouldn’t be forced to show our papers wherever we go.”

Smart card technology has been employed in a growing number of applications in the United States in recent years.

Many consumers are already familiar with stored-value smart cards, which often are sold as single-use gift cards. Some retailers, such as The Gap, also sell renewable smart cards.

Florida State University issues a card that functions as a student’s ID, banking and dorm security card, and has stored-value functions to pay for food and phone calls.

“The students like it because it’s easy. You don’t need pocket change anymore,” explained Diana Norwood, director of the 5-year-old FSU card program.

FSU issues cards that enable parents to transfer money directly to a student’s account, let the financial aid office deliver funds and allow students to make long-distance calls and open their dorm room doors.

“Parents like it because it’s a prepaid value card; they can put a certain amount of money in the account, which is a lot safer than turning an 18-year-old loose with a credit card,” Norwood said.

Industry experts expect smart cards to permeate the economy.

“One of the things that is becoming popular is a payroll application, which allows organizations to disburse funds to employees through a stored-value card,” said Frank D’Angelo, general manager of Metavante EFT and Card Solutions of Milwaukee, Wis.

On payday, companies add value to the card, which can be used to buy food at the workplace and separately as an ATM card through the company’s account.

“For a consumer who doesn’t have a banking relationship, it’s a better alternative than paying a fee to get a check cashed.”

Cards also are popping up at festivals and events that previously required paper tickets.

The technology has been around for years but is just now picking up steam. A study done last year by the research firm Dataquest predicts a 60 percent annual growth rate in smart card users from 1998 to 2003.

Many U.S. consumers were introduced to smart cards in 1999, when American Express introduced Blue, a card with a chip that offers extra security when shopping online, courtesy of a special card reader attached to a customer’s PC. Blue now has an estimated 4 million users.

In El Salvador and Argentina, smart driver’s licenses provide police with immediate access to data. In Mexico, smart cards ensure collection of auto registration fees and reduce the likelihood of stolen cars being sold to unsuspecting dealers.

In the future, smart cards could be used as health cards, enabling patients to carry medical records with them.