Five major U.S. banks have joined a financial industry user group, sponsored by Visa International, to promote Java-based smart cards that can handle more than one application.
The announcement came as a bank in Singapore today launched a new smart card with three applications: credit card payment, a loyalty application to reward repeat customers, and a digital certificate for SET, the Secure Electronic Transaction protocol.
Standard Charter Bank, working with smart card manufacturer Gemplus and Sun Microsystems' Java division, is testing its multiuse smart card with employees of two Singapore companies. The program is due to be expanded to other Visa cardholders later in the year, with rollouts in Taiwan, Hong Kong, and other Asian nations targeted for 1999.
Smart cards, also called chip cards, are credit cards with a microprocessor on them, turning them into little computers with memory and processing power. Those features make them bank favorites for replacing today's magnetic-stripe plastic cards.
"The transaction conducted today signifies that Open Platform Java cards issued by banks are real," said Visa spokesman Greg Jones. The global user group, which involves a total of 20 financial institutions, indicates support for Visa's Open Platform for smart cards among 20 major financial institution, including Standard Charter Bank.
The U.,S. banks are in the user group are Bank of America, Citibank, First Union, NationsBank, and U.S. Bank. Also joining were Britain's Barclays Bank, France's Carte Blue, two Japanese banks, and six banks in Korea.
Sun is pushing its JavaCard specification for smart cards, and the company has a JavaCard Forum that represents multiple industries and vendors. Jones said Visa's effort is designed to give industry-specific input to that vendor-oriented group.
Visa's Open Platform is a specification that it licenses free to developers, and it is designed to support multiple operating systems within a Java framework, unlike Multos, which itself is an operating system.
Visa argues that its Java-based platform encourages the development of best-of-breed applications because it doesn't lock developers into a single operating system. Smart card manufacturers like Schlumberger, Gemplus, and IBM general support more than one operating system.
Many in the smart card industry believe that more than one application will be required before smart cards find widespread adoption, particularly in the United States. But multiapplication smart cards are more expensive, so many banks are looking to loyalty applications--which reward repeat customers like frequent flyer programs--as a key way to spur the adoption of smart cards.
The Singapore project is similar to Smart Commerce Japan, which has tested multiple uses of smart cards, including payment applications, in several Japanese cities.