Java Card to replace conventional smartcards

The Java card is envisioned to replace conventional smartcards because it can be used for multiple applications such as mass transit, telecommunications, health, mobile, banking, and retail, an electronic banking conference in Manilla heard last week.

"The next generation of multiple application smart cards will use Java card technology," said Henry Oh, regional marketing manager for banking and loyalty cards at Schlumberger Singapore. Oh was a speaker at the third Philippine electronic banking conference here organised by ATM consortium MegaLink.

Schlumberger has developed the Cyberflex smartcard, the world's first Java card.

Oh said the next generation of multiple application smartcards, designated Open Platform cards, will be based on the new standard Java Card API 2.0 defined by Sun Microsystems.

"The Open Platform will benefit issuing banks by supplying maximum security and flexibility inherent in the Java card technology," said Oh. In its first design, Open Platform will incorporate fundamental banking applications, such as credit/debit and stored value. Applications such as electronic commerce, loyalty programs, home banking, and telecommunications can also be added. Oh said that a lot of countries are gearing towards implementing smartcards that meet multiple application requirements. However, he said that not many terminals today can read Java cards. "It still has a long way to go, but it is the right technology."

The worldwide market for smartcards in 1996 was 650 million, and is expected to grow fourfold by 2001 -- to around three billion a year. "Smartcard growth is likely to be highest in Asia, where the fast developing economies are boosting demand," Oh said. He said that this growth is fuelled partly by the relatively greater freedom of Asian countries to move straight to the optimum technical solution, without having to worry about major investments in previous generations of infrastructure for magnetic stripe technology cards.

"It is estimated that by the year 2001, more than 100 billion transactions a year will be made using smartcards," Oh said.

"The stack of cards that now fill our wallets is replaced by one, a smartcard." He added that the chip inside the card has the computing power to replace all of today's cards for debit and credit applications. In addition, he said that it will be an electronic purse pre-loaded with a small amount of money for incidental purchases like gas, parking tolls, newspapers, bus tickets and telephone calls.

Pioneered in Europe, the smartcard has been widely used for more than a decade in applications such as payphones, banking (electronic purses), transport and health care.

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