IBM in smart-card services push

IBM's Global Services unit has added asset monitoring and security-identity services to its services portfolio. IBM is using chip cards and "smart chips" that send out a radio signal for these services, the Armonk, New York, company announced Tuesday.

IBM distinguishes three scenarios where smart chips can be used for asset monitoring. A stationary machine can have a smart chip to report its performance. Items in a warehouse can be tagged with a chip to track their details and easily find out what is in a crate. And a moving object can have a chip to track its location, said Jan Walbridge, a spokeswoman for IBM.

The secure identity service can range from simple access management, the electronic office key, to debit payments and secure electronic storage of health records. Several applications could be put on a single card, Walbridge said.

Demand for services using chip cards and smart chips has jumped 300 percent this year over last year as the chips became cheaper and companies have network infrastructure in place, according to Walbridge, who declined to provide further details on IBM's service revenue for the sector.

"What was US$15 or $20 per chip about two years ago is now pennies," said Walbridge. "The fact that networking is now so common and that applications are all linked to the Web has created what we see as a perfect storm, a ready marketplace, for chip cards and smart chips."

Safeway PLC is one of the first to buy IBM's secure identity services. IBM has been hired to place 8,000 chip card terminals in 500 U.K. stores before the end of the year. By using chip cards, Safeway hopes to reduce payment fraud. The card could also be used to offer additional services such as customer loyalty schemes, according to IBM.

Retailers in the U.K. are working to replace signature-based card payments with credit and debit cards with PIN (personal identification number) systems.

Financial details of IBM's contract with Safeway were not disclosed.

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