Lufthansa Introduces Ticketless Travel

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1996 Smart Card News Ltd., Brighton, England. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, optical, recording or otherwise, without the prior
permission of the publishers. Lufthansa Introduces
Ticketless Travel Lufthansa, the German airline, has introduced ticketless flying on
all domestic flights following the successful testing of its ChipCard
with more than 600 frequent flyers on the Frankfurt-Berlin route
last year and a positive response from customers. Heralded as $a major leap into the future of air travel,# the ChipCard integrates contactless Smart Card technology in a card combining
ticket, boarding card, customer card and credit card. Lufthansa Chief Executive Marketing, Hemjö Klein, says: $By introducing chip card technology for ticketless travel, Lufthansa is
creating exclusive customer benefits. We are speeding up ground
service and at the same time are the first of the world s airlines to utilise touch-free chip card technology in combination with an
electronic ticket. # Continued on page 93 Smart Card News Managing Director: Patsy Everett Editor : Jack Smith Technical Advisor : Dr David B Everett Editorial Consultants: Dr Donald W Davies , CBE FRS Independent Security Consultant Peter Hawkes , Principal Executive
Electronics & Information Technology Division
British Technology Group Ltd Chris Jarman
Vice President, Chip Card Technology
MasterCard Published monthly by: Smart Card News Ltd
PO Box 1383, Rottingdean
Brighton, BN2 8WX, England
Tel: +44-(0)273-302503
Fax: +44-(0)273-300991 ISSN: 0967-196X Next Month Smart Card Tutorial - CONTENTS 63 Motorola to Produce Chips in US 64 China Orders L&G Payphones 65 P-CARD to be Offered Worldwide 66 Loyalty Cards in Supermarket War 67 Mondex Trial in Canada 68 ecash Payments on the Internet 69 Thyron Terminals for Dubai Taxis 70 PROTON Starts National Roll-out 72 BiPay Smart Card from GPT 73 Data Protection on the Cards 74 CarteS SESAMES !96 Awards 75 Smart Card Diary 76 Electronic Commerce and Payment
Mechanisms - Part 3 80 Multi-Service Puzzle Cards May 1996 Smart Card News  1996 Smart Card News Ltd 93 Lufthansa Ticketless Travel Continued from page 91 The new card, which has a new chip replacing all
previous customer cards, is being issued first to all
holders of Lufthansa Senator Cards resident in
Germany, followed by frequent fliers with the
airline and then to all interested customers.
Initially, the card will be available for use on all
Lufthansa domestic flights in Germany. In use, the card will make service on the ground
more convenient, easier and faster. Customers book
their domestic flight in the usual way, either at their
corporate travel office or by telephoning a travel
agency and giving their ChipCard number as a
reference. Their booking is then stored
electronically in the reservations system so there is
no need to go to the travel agency to collect the
ticket or have it mailed to them as there is no paper
ticket involved in the transaction. Passengers travelling only with hand luggage
simply wave the card in front of a Chip-in terminal
which then issues a print-out containing all the
details concerning their departure gate, boarding
time and seat number. At the same time, mileage
for the frequent flier programme, Miles & More, is
automatically credited to their account. Passengers with check-in baggage can also use the
ChipCard. Instead of using the Chip-in terminals
they check in at the normal counters where they
obtain their boarding card and baggage label. At
many airports, passengers will be able to carry out
the final boarding procedure simply by waving their
ChipCard over a special reading device installed at
the gate. A total of 37 Chip-in terminals are being installed
at all German airports from which Lufthansa
operates and more than 70,000 ChipCards have
been issued so far with a target of 100,000 by the
end of July this year. The new card is the RM8K
(1K bytes EEPROM) contactless Smart Card from
Giesecke & Devrient which uses remote coupling
technology from Mikron of Austria and is designed
specifically for applications in identification and
ticketing systems. Contact: Markus Ruediger, Lufthansa Press and
Public Relations UK/Ireland - Tel: +44 181 750
3415. Fax: +44 181 750 3410. Motorola to Produce Chips in US Motorola, the world s biggest supplier of microchips for Smart Cards is to start
manufacturing them in the United States at its plant
in Research Triangle Park, North Carolina. The announcement was made at the
CardTech/SecurTech Conference in Atlanta,
Georgia this month and the company described the
move as a major investment in the future of Smart
Cards in the US. Motorola s worldwide headquarters for Smart Card operations is in Scotland where it will remain, but
the company has always indicated that it could
produce Smart Card chips at many of its
international locations and the announcement that
it is extending its manufacturing capability to the
US will not surprise industry watchers. Motorola views America as a major marketplace in
the near future and its microchips are being used in
Visa s reloadable stored value Smart Cards in many parts of the world including Atlanta for the 1996
Olympic Games. Allan Hughes, Worldwide Smart Card Operations
Manager based in Scotland, says the North Carolina
plant plans to have capacity to manufacture $many millions # of Smart Card microchips per year by 1997. $Motorola recognised early on the vast potential for
Smart Cards in the US, # he said. $With this move, Motorola becomes the first company to address
directly what will soon be a booming US market. $Consumers will soon discover the many ways in
which Smart Cards can support them - and make
life easier - with card applications ranging from
healthcare, personal computer and Internet access,
to financial services, telecommunications and
building access control. # Motorola also announced that its US Smart Card
operation will be located in Austin, Texas where
this facility will be responsible for marketing,
business management, design, manufacturing and
product engineering. Contacts: Clare Lucraft/Paul Dawson, Hill &
Knowlton - Tel: +444 171 413 3145. E-mail Smart Card News May 1996 1996 Smart Card News Ltd 94 pdawson@hillandknowlton.com China Orders L&G Payphones A contract to supply 1,000 chip card payphones to
China has been won by Landis & Gyr
Communications. The Geneva, Switzerland-based
company is delivering its Comet 61 payphones
equipped to accept second generation (4406-type)
pre-paid chip cards to MPT China s Tianjin Telephone Equipment factory for use in field trials
across the country. Li Zhen Hua, Director of the MPT s Tianjin factory says the award of the contract was based on the
success of Comet 61 payphones installed at the
Fourth United Nations World Women s Conference in Beijing in September last year and their
flexibility to accept new emerging payment
methods. Contact: Adolf Deyhle , Landis & Gyr Communications - Tel: +41 22 749 3355. Fax: +41
22 749 3539 . Mikron License for Allsafe in US Allsafe Company, Inc., one of the largest card
manufacturers in the access control, time and
attendance and parking marketplace, has announced
it has signed the first US license agreement with
Mikron GmbH of Austria for its HITAG advanced
radio frequency identification system. The US Buffalo, New York-based company says it
will develop and produce HITAG core modules,
access control readers to interface to OEM systems
and also manufacture HITAG and MIFARE
contactless Smart Cards for the US marketplace. HITAG, an advanced read/write RFID technology,
was developed especially for access control,
parking, time and attendance, employee card, ski
ticketing, vending, customer loyalty and other
related markets. Key features include read/write
memory, high security using passwords and mutual
key authentication, data encryption and memory
write protection plus the ability to read and write
multiple cards simultaneously with one reader
(anti-collision) at operating distances up to 30
inches giving hands-free operation if required. Mikron is a wholly-owned subsidiary of Philips
Semiconductors and its HITAG cards are the same size as credit cards. Allsafe says the cards can be
read and written to using both the HITAG core
module as well as the Allsafe ProxRite reader. The
HITAG core module (called Prox-In A Can) is
available to any OEM who wishes to embed the
card technology in their own custom designed
readers. The Allsafe ProxRite reader is available to
OEMs who wish to be able to read and write
HITAG cards utilising an industry standard
interface such as Wiegand, RS232 or RS422/485. HITAG cards can also include a magnetic stripe,
debit stripe, bar code(s), barium ferrite insert as
well as other card technologies and options. The
operating range is up to six inches with the standard
reader and up to 30 inches with the long range
reader. Contacts: Michael L Davis , Allsafe Company - Tel: +1 716 896 4515. Fax: +1 716 896 4241. Email:
mdavis@allsafe.com Friedrich Plankensteiner , Mikron North America, Philips Semiconductors
North America - Tel: +1 408 991 2101. Fax: +1
408 991 2122. Email fplanke@scs.philips.com
Martin Bührlen , Mikron Austria - Tel: +43 3124 299210. Fax: +43 3124 299270. Email
Martin_b@mikron.co.at Good Results from SGS-Thomson French chip manufacturer SGS-Thomson
Microelectronics has reported a 32 per cent increase
in revenues for the first quarter ended 30 March.
Net revenues totalled US $1.03 billion compared
with first quarter 1995 revenues of US $778.6
million. The company reported a significant
increase in net income which rose 64 per cent to US
$175.0, up from US $106.9 million for the first
quarter of 1995. Pasquale Pistorio, President and Chief Executive
Officer, described the results as an outstanding
quarter. $Our sales were up in comparison to both the year ago quarter and on a sequential quarterly
basis, # he said. He added that with tight control on operating
expenses, SGS-Thomson recorded an operating
profit margin of 21.5 per cent - the highest in the
company s history, and he said it should be noted that SGS-Thomson $continues to be capacity constrained # in most of its leading product May 1996 Smart Card News  1996 Smart Card News Ltd 95 families. During the quarter, the company shipped its one billionth Smart Card IC. P-CARD to be Offered Worldwide The German P-Card alliance headed by EBS
Elektronik Banking Systems GmbH, is to licence its
multifunction electronic purse technology
worldwide. Announced last month (SCN April 1996), the P-
CARD system is being introduced in Germany by
a partner association consisting of Krone
Kommunikationssysteme, Bad Hersfeld, ORGA
Kartensystem, Goppinger Datenservice and EBS
and plans to issue 500,000 Smart Cards and set up
3,000-5,000 acceptance points this year. Angelika Wegner, General Manager, EBS, says the
system allows licensing of each interested party
(bank, trade, industry etc) for issuing, acquiring,
processing, service-providing, terminal and card
manufacturing as well as for interfaces. Licences
for banks will only be given for the stock in the
electronic purse and for clearing. Licences will be sold by ORGA Consult GmbH
who will recruit domestic licence-owners in each
country. The 8K bytes EEPROM multifunction Smart Cards
will be available with chips from Siemens
(44SLC80) Hitachi (H8/3102) and Philips with the
card fabricator to be decided by the issuer. Contact: Angelika Wegner , EBS - Tel: +49 611 95 130 0. Fax: +49 611 95 130 99 . BIK to Process Geld Karte Transactions for Germany s Geld Karte electronic purse scheme (SCN January 1996), will be
processed by the Betriebswirtschaftliche Institut der
Deutschen Kreditgenossenschaften (BIK) GmbH -
a major service provider for co-operative banks in
Germany - using Tandem Computers and software
from Applied Communications Inc. (ACI). ACI says its software will enable consumers to load
value onto their card from special bank terminals,
or buy non-account-linked cards over the counters.
It will also collect the spend transactions from the
retail outlets at the end of each day for settlement
and unspent funds management. BIK has also licensed ACI s ATM and point of sale software to upgrade their current systems to handle
the anticipated increase in transactions brought by
the Geld Karte project. ACI is already working on several other Smart Card
initiatives with Mondex in the UK, First Union
Bank in the US and Visa. The pilot scheme, launched in the town of
Ravensburg at the end of March, is organised by
ZKA (Zentraler Kredit Ausschuss) representing the
savings, public, co-operative and commercial
banks. The Smart Cards are being supplied by
Giesecke & Devrient and ODS R. Oldenbourg
Datensysteme GmbH and it is expected that around
100,000 will be issued during the pilot. National
roll-out is planned for the end of this year. Contact: Sandy Bold , Corporate Communications, ACI (for Europe, Middle East and Africa) - Tel:
+44 1923 816393. Fax: +44 1923 816133 . MIFARE PLUS Combi Chip Mikron of Austria, a subsidiary of Philips
Semiconductors, is developing a chip for Combi-
Cards called MIFARE PLUS which will combine
the benefits of contact and contactless Smart Cards
communicating via contacts (according to ISO
7816) and via the contactless radio frequency
MIFARE interface at a distance of up to 10 cms
between card and read/write device. Mikron says
the new chip will be available by the end of this
year. As both interfaces access the same memory, it will
be especially suitable for applications which require
both the high security standards required by banks
as well as the quick handling needed in public
transport applications. The card can be loaded with value at a bank
terminal using contact technology while, for
payment, the user can then choose between the
contact or contactless interface. In this way various
applications can be combined such as an all-in-one
City Card with parking, electronic ticketing for
public transport and phone card. Contact: Alexander Harrer , Mikron, Austria - Tel: Smart Card News May 1996 1996 Smart Card News Ltd 96 +43 3124 299 950. Fax; +43 3124 299 2780. Email Alex_h@mikron.co.at Loyalty Cards in Supermarket War Supermarket chain Sainsbury, which has lost its
market lead to Tesco, is to launch a customer
loyalty card in mid-Summer. A spokesman for the company would not give any
details, but Sainsbury s interest in technology indicates that the card could be a Smart Card giving
the company more development options than with
a magnetic stripe card. In the fierce supermarket war, Tesco has taken the
market share since it launched its customer reward
scheme in February 1995. Called the Tesco
Clubcard, the scheme enables customers to collect
points on the amount they spend and to benefit
from promotions and in-store events. Recently the card was expanded to include
purchases at B&Q and Lunn Poly holiday shops
and Tesco can now boast of having 8 million
cardholders. There is speculation that Tesco is to
upgrade from magnetic stripe to Smart Card
technology, but SCN questions were countered
with: $We are always looking at new ways to improve our service to customers. # Sainsbury s have taken the success of the Tesco Clubcard on board and, in the secrecy that
surrounds plans to gain competitive advantage,
have been developing their own card to attract
customer loyalty. A major announcement can be
expected within a few weeks. Gemplus Turnover FF1.5 Billion Gemplus reports strong financial growth of 37 per
cent with a consolidated turnover of 1,482 billion
Francs in 1995 compared with 1,084 billion Francs
in 1994. But despite this strong increase in
turnover, the group s net result of 104.5 million Francs was only marginally up from the 103 million
Francs reported in 1994. Gemplus blamed
increased competition on prices and delays on
major programmes, mainly effecting the phone
card, for the slowdown. Gemplus currently operates in 20 countries and it s international presence has been reinforced by the
acquisition of DataCard s card production and personalisation centres last September in the United States, Germany, The Netherlands, United Kingdom
and Belgium, as well as setting up commercial
bureaus in Russia, South Africa and Australia. As
a result, 88 per cent of the group s turnover came from export orders. In addition to the acquisition of DataCard s production and personalisation services, 1995
highlights included the takeover of NetOne, a
Gemplus partner and customer in South Africa
where it has orders for one million cards; and an
alliance with Hewlett-Packard and Informix to
develop personal Smart Cards. During the year, the group s monthly production capacity climbed to 25 million Smart Cards and 30
million conventional magnetic stripe cards (an
annual total of 660 million). Gemplus , which celebrated the delivery of its 500
millionth phonecard last year, claims 43 per cent of
that market, and 39 per cent of the market for
cellular mobile phone SIM cards with more than 95
customers worldwide. Contact: Flavie Gil , Gemplus Press Office, France - Tel: +33 42 32 56 83. Fax: +33 42 32 51 17. Floral Design Phonecards ACC Long Distance UK, a long distance telephone
service provider, has announced its first series of
limited edition, themed pre-paid payphone cards,
called the Flower Collection. The collection started
with Anemones and will be followed with
Sunflowers in July, Lupins in October and
Snowdrops in December. Each flower in the series will be featured on just
5,000 25 unit cards, 14,000 50 unit cards and only
1,000 100 unit cards. ACC would not name their card supplier but the
pre-paid card has the Siemens SLE4406 40 bits
EEPROM chip to secure closed user group
applications. Chris Bantoft, ACC Managing Director says he
expects the limited edition cards to create a surge of
excitement from card collectors. Cards can be
purchased directly from ACC by either calling +44
1223 577777 or writing to: Eleanor Hardy, ACC May 1996 Smart Card News  1996 Smart Card News Ltd 97 Long Distance UK Ltd., St Andrews House, St Andrews Street, Cambridge CB2 3BZ, England. Mondex Trial in Canada Northern Telecom (Nortel) has announced that it is
to supply its Millennium public access terminals
and Vista screen phones to Bell Canada for the
Mondex electronic cash pilot in Guelph, Ontario,
Canada. The trial is being organised by the
Canadian Imperial Bank of Commerce and the
Royal Bank of Canada working with Bell Canada. Bob Cheriton, Vice President of Bell Canada s Card Strategy, said: $In addition to giving consumers more payment options, including making their
phone calls, very soon people will be able to obtain
cash from the convenience of their own home using
a Vista screen phone, or from any public location
where a Millennium terminal is located. # Tim Jones, Chief Executive Officer, Mondex,
welcomed the involvement of Nortel as a
significant step in the development of Mondex as a
global payment system. $This news is not only important for Mondex in Canada, but for Mondex
worldwide as Nortel s technology will help facilitate the acceptance of Mondex around the
world, # he said. Both the Vista screen phones and the Millennium
public communication terminals utilise large
displays and simplified user interfaces which allow
service providers to offer a suite of information
services to consumers at residential or public
locations. Many of these services are currently
being offered in a Bell Canada advanced residential
screen phone pilot in London, Ontario. Nortel s screen phone offers new communication, information, entertainment and other transactional
services and more than 300,000 are being used for
enhanced telephony services such as visual voice
mail, caller ID services and home banking. Currently there are more than 100,000 Millennium
payphones throughout North America. In addition
to their Smart card capabilities they feature quick
access keys that can be programmed for one-touch
dialling of information services, emergency
assistance, public service announcements or direct
access advertising. Contacts: Brian Murphy , Nortel - Tel: +1 214 684 8589. John Peck , Bell Canada - Tel: +1 416 581 4253. Joe Clark , Mondex - Tel: +1 416 323 3334. Mondex Beyond Swindon The current take up of the Mondex electronic cash
card in the Swindon pilot would equate to 2.5
million Mondex cardholders in a national roll-out,
claim the operators. Ron Clark, Chief Executive, Mondex UK, says: $The figures that are coming out of Swindon are
well ahead of what was achieved with cash
dispensers, credit cards and SWITCH at the same
stage and we are extremely optimistic about the
future of Mondex beyond Swindon. # He said that there are now over 10,000 Mondex cardholders - a
figure representing a 21 per cent penetration of the
member banks customer base. To extrapolate these figures nationally would mean 2.5 million Mondex
cardholders. Mondex has issued the following statistics:
The average amount loaded onto the card is
between 25-30 broadly mirroring how people use their ATM cards. Most purchases are for less than 5, the most frequently purchased items being newspapers, fast
food, confectionery, bus fares and car park tickets. Higher value transactions are largely seen in
supermarkets - the biggest single collectors of
Mondex value - followed by department stores and
petrol stations. Mondex has now become the preferred method of
payment according to 66 per cent of cardholders in
a sample survey, with cash slipping to 32 per cent.
An overwhelming 85 per cent are either satisfied or
extremely satisfied with Mondex and 77 per cent
feel that Mondex is safer to carry than cash. A total
of 90 per cent found the card easy to use. In a major marketing push, a variety of local
businesses are offering Spring discounts to Mondex
cardholders in Swindon which should further boost
the number of cardholders and transactions while
demonstrating the versatility of the promotions
which can be offered via the card. Money saving
offers for cardholders include discounts at pubs,
restaurants, cinemas and for car hire; points and
tokens at petrol stations and cheaper local bus fares. Contact: Gerry Hopkinson , Band & Brown Smart Card News May 1996 1996 Smart Card News Ltd 98 Communications - Tel: +44 171 704 2010. Fax; +44 171 226 9742 . ecash Payments on the Internet EUnet, Europe s leading provider of Internet services, has launched ecash which enables
consumers to make and receive payments securely
over the Internet. The system has been launched initially in Finland
and EUnet, working with major banks, intends to
roll-out the service during 1996 in more of the 41
countries in which it operates. Merita, Finland s largest bank, already processes over three million account holders with access to its
Solo payment service. This now allows users to
visit a $virtual ATM# on the World Wide Web and withdraw money directly form their bank account
into their ecash $purse.# With this money they can make electronic payments to each other as well as
to on-line merchants. Merchants already accepting ecash range from
popular magazines and newspapers to those selling
stock quotes and GSM paging through email.
DigiCash says that soon, while travelling anywhere
in Europe, consumers will be able to dial a local
number and pay for Internet access via EUnet
Traveller, using ecash. EUnet s Managing Director Wim Vink, says: $We are delighted to be the first Internet Service
Provider in the world to make the benefits of ecash
fully available to Internet users. We see the ecash
system as a major enabling technology that will
make electronic commerce into an effective new
way of doing business. # Matti Karvonen, First Vice President of Merita
Bank, comments: $Merita has around 200,00 customers who already use terminals for their daily
banking. We believe that the number will increase
with the introduction of ecash and Solo payments. # Using ecash Using ecash is like using an ATM. When connected
to it via a PC over the Internet, the user
authenticates ownership of the account and then
requests the required amount of ecash to be
withdrawn. Instead of being issued with bank notes,
the customer receives digital cash which is stored
on the hard disk of the PC. To make a payment, the customer confirms the
amount and the payee and then the ecash software
transfers $coins# of the correct value from the PC direct to the payee. Pilot in Germany In another development this month, DigiCash and
Deutsche Bank announced that they are to launch a
joint pilot project in Germany to test the use of
electronic cash on the Internet. The project will enable the bank s clients to pay for information (ranging from magazine articles to
stock quotes), services (from database searches to
help desk support) and tangible goods (from mail
order to pizzas) using any PC with access to the
Internet. Dr Wolfgang Johannsen, Head of Deutche Bank s Department for Technological Development, said: $In launching this pilot project, Deutsche Bank
aims to test the possibilities of innovative payment
forms and procedures and to expand their range of
Internet services. # ecash was used last Autumn by Mark Twain Bank
to issue the first ecash dollars in the United States. Contacts: Paul Dinnissen , DigiCash, Amsterdam - Tel: +31 20 665 2611. Fax: +31 20 665 1126 . Graham Wilson , EUnet, Amsterdam - Tel: +31 20 623 3803. Fax: +31 20 662 4657. Timo Nikinmaa , Merita Bank, Helsinki - Tel: +358 0 1654 2471. Mr
Schumacher , Deutsche Bank - Tel: +49 69 910 33406. Fax: +49 69 910 33422. Cassamat Electronic Purse Cassamat, the electronic purse card launched in
October 1994 by a federation of 52 rural banks in
Italy (Raiffeisenverband Südtirol), is growing
steadily with over 36,000 cards issued and a target
of 70,000 by the end of 1997. The card (see front page) is available to bank
account holders and tourists in the Selva di Val
Gardena and Merano areas. The system was
developed by Italian company VERON SpA and
uses their C-Less (contactless) cards with an SGS-
Thomson 3K bytes EEPROM ST 16623 chip. May 1996 Smart Card News  1996 Smart Card News Ltd 99 Contact: Luciano Cavazzana , VERON SpA - Tel: +39 2 4821 5231. Fax: +39 2 452 4701. Thyron Terminals for Dubai Taxis Emirates Bank International Limited (EBIL), which
launched the disposable Stored Value Card NEW
CASH in Dubai last February (SCN March 1996),
has selected Thyron s portable hand-held Financer terminals to process NEW CASH card payments
within mobile applications. EBIL has agreed to install the Financer terminals in
the new fleet of executive taxis being operated by
the Dubai Transport Corporation (DTC). Thyron
has worked with local partners, Sultan Special
Systems of Dubai, to develop and install the
terminals in the taxis to enable passengers to pay
for their journey s using the NEW CASH cards. Initially, 200 Financer terminals have been installed
and it is expected that over a period of two years the
terminal volume will approach 6,000 units as the
DTC taxi fleet grows. The Financer terminals communicate with the EBIL
host system for NEW CASH transaction collection
and reconciliation into merchant accounts. Abdulla Qassem, Business Analyst with Emirates
Bank, envisages that the Financer terminal, due to
its small size and off-line transaction processing
capability, will be used $in the majority of mobile applications from taxis to small market stall traders
who require a low-cost electronic payment terminal
that will accept NEW CASH Smart Cards and also
process standard credit and debit cards in the future. # Nigel Cullum, Sultan Special System s Regional Office Manager, says: $There is set to be a rapidly rising trend towards off-line mobile transactions,
especially with the in-built security of Smart Card
transaction processes. To this end, Thyron have
developed a product that virtually has every
conceivable functionality built into what is
unarguably the most compact device in the world,
the Financer terminal which can be used for retail
payment, home banking, home shopping,
transportation and all other mobile applications in
the card field. # Contact: Rohit Patni , Sales & Marketing Director, Thyron - Tel: +44 1727 875800. Fax: +44 1727
875891 . New Chip Card Acceptors Amphenol-Tuchel Electronics has redesigned the
C702-1 Push-Matic series chip card acceptor to
offer an optional locking switch. This new addition
to the product range gives the design engineer the
locking signal indicating that the contact carrier has
locked in the end position and the chip card is fully
inserted. The design has two switches, one is integrated in
the contact block assembly and detects card present
while the new locking switch is actuated by the
locking mechanism. The range is available with 5, 12 and 24 volt
solenoids, incorporates landing contacts and will
achieve 500,000 card insertion cycles.
Applications include EFTPOS, vending machines,
banking and retail terminals. Smart Card News May 1996 1996 Smart Card News Ltd 100 Contact: Ralf Stegmann , Amphenol - Tel: +49 7131 929-0. Fax; +49 7131 929-400. PROTON Starts National Roll-out The National roll-out of PROTON, the Belgian
electronic purse, starts this month in the cities of
Namur, Mons, Gent and Mechelen. This will be
followed by Brussels, Antwerp and Liège in
September with all large and medium-sized towns
to be covered by the end of 1997. Banksys, operator of the Belgian network for
electronic payment - Bancontact / Mister Cash -
says the necessary infrastructure will be in place by
early 1997 to combine the Bancontact / Mister Cash
and PROTON functions on a single card for all
banks which wish to do so. The PROTON reloadable chip card, which can
contain up to a maximum of 5,000 francs, was
successfully tested in Wavre and Leuven. As roll-
out begins, the card can be obtained in almost all
bank branches in the country and the system is
available to all merchants and closed user groups
such as companies, universities, large schools,
hospitals to replace cash money in restaurants,
shops and vending machines on their premises. Currently, Banksys and Belgacom are looking at
recharging the PROTON card at public payphones.
Banksys has already developed an intelligent
terminal, the C-ZAM / Phone which enables
cardholders to recharge their cards from home. Banksys says that town administrations are
interested in replacing their old parking meters with
new ones able to accept PROTON. A prototype of May 1996 Smart Card News  1996 Smart Card News Ltd 101 a portable parking meter is currently under
laboratory testing and will be made available if
there is market demand. PROTON technology has been sold to Interpay for
the Dutch electronic purse, Chip Knip; to Telekurs
for the CASH electronic purse in Switzerland; and
to Brazilian company Mitel for use in the Banco do
Brasil electronic purse pilots. Finally, Australian
company ERG signed a contract for the Quicklink
consortium whose card, based on PROTON, is
being piloted in Newcastle, New South Wales,
Australia. ERG has also acquired a licence for
Hong Kong and New Zealand. Hardware and transaction prices are as follows: Terminals: Purchase: 15,000 to 17,000 francs
(depending on model) or a lump sum: for shopkeepers: 140 BEF / month (4 night transfers included) for
20,000 BEF turnover
for vending machines: 250 BEF /
month (4 night transfers included)
for 12,500 BEF turnover Commission on the transferred amount: 0.7% for shop terminals
2% for vending machines
transfer to bank account during the
day: 20 francs - at night: 8 francs. Contacts: Youri Tolmatchov , Communication - Tel: +32 2 727 6666. Fax: +32 2 727 2727. Jean-
Benoît Van Brunnen , Product Manager - Tel: +32 2 727 6372. Fax: +32 2 727 6767. Smart Card News May 1996 1996 Smart Card News Ltd 102 BiPay Smart Card from GPT GPT Card Technology is to demonstrate its new
BiPay Smart Card combining both contact and
contactless Smart Card technology at the
CardTech/SecuriTech !96 exhibition in Atlanta, Georgia, USA, this month. The demonstration will illustrate the secure transfer
of value from the contact purse area of the card to
the contactless purse area, enabling a single card to
be used for many different applications. Paul Seward, General Manager of GPT Card
Technology, explained: $The card has been designed to provide the customer with the
flexibility of a contact Smart Card, for use in
electronic purse applications for example, and the
convenience of a contactless card which is ideal for
fast moving applications such as mass transport
ticketing. Range of cards GPT will also be demonstrating a range of
microprocessor contact Smart Cards designed for
specific industry sector applications. These include
the GPT Loyalty card, the GPT Leisurecard,
designed to hold personal and club membership
details whilst allowing value to be added or
deducted as necessary. Also on display will be the GPT Healthcard which
is capable of holding a patient s personal and health insurance details and full medical history. Different
levels of access to data stored on the card is
obtained using PIN codes and an additional PIN
used to allow medical records to be updated. The secure transfer of electronic cash via two GPT-
designed Mondex payphones will also be
demonstrated. GPT Card Technology is part of GPT Payphone
Systems, the world s largest payphone company. The card division looks set to add a combined
contact and contactless card to its three core
technologies GPT Imprint Magnetic (GIM) cards,
GPT Integrated Smart (GIS) cards and GPT
Integrated Contactless (GIC) cards. Contact: Lisa Bush , GPT Press Office - Tel: +44 115 943 3687 . Industry Guide Available Now The International Smart Card Industry Guide
published by, and only available from, Smart Card
News Ltd., is now available. This second edition, even more comprehensive than
the first internationally acclaimed publication, is
essential reading for everyone in the industry. It
contains the key information you need to function
in a fast-moving industry - information on the
latest/major projects, including electronic purses;
and a directory of companies with descriptions of
their products and services together with contact
names, numbers and addresses. In addition there are feature articles on the
technology, patents and intellectual property rights,
and an extensive glossary. The book is an essential reading and reference book
if you want to keep up to speed on Smart Card
technology. Priced at only 125 plus postage and packing, the Guide is the single most important Smart Card
reference book to have on your desk. Subscribers to Smart Card News can obtain the
Guide for 70 including postage and packing. To order: write, telephone, fax or e-mail Smart
Card News Ltd - details on inside front cover of this May 1996 Smart Card News  1996 Smart Card News Ltd 103 newsletter. Data Protection on the Cards Smart Cards offer a huge potential to the public but
this will be lost unless public trust can be
guaranteed by giving individuals control over
personal information, says independent think-tank
Demos. Its report, the first comprehensive analysis of the
policy issues raised by the rapid proliferation of
Smart Cards in financial services, business,
telecommunications and public services such as
health and social security, warns that the benefits
will only accrue if there is public trust that Smart
cards will not be $big brother s little electronic helpers. # The report points to growing fears about how
sensitive information could be accessed by
employers, insurers and others. It says four out of
five Britons feel anxious about how personal
information is used and 80% of Americans say that
they have lost control over information about
themselves. The authors offer a strategy away from what it
describes as the $unhelpful# polarisation of the debate between civil libertarians and authoritarian
government and business interests in promoting the
benefits of Smart Cards. They argue against any government-provided
multi-functional identity card as proposed by Home
Secretary Michael Howard, but point out that the
government has yet to announce if it will introduce
an ID card and if it will be a Smart Card. Strengthening protection The report proposes strengthening data protection
law, for example, unless the data subject expressly
consents to a specific use or disclosure of personal
information, that use or disclosure should not be
permitted except in the core functions of
government concerned with security and law
enforcement. Data subjects should have the right of
independent access to their records, and there
should be measures to control data matching. It argues that individuals should be able to buy $blank# multi-functional Smart Cards with privacy-
respecting architectures from agencies that they
trust and decide for themselves what information and data will be loaded.
The researchers say that there should be a wider use
of privacy-enhancing technologies such as
encryption and argue that there should be
regulation to encourage a voluntary system of
independent, non-governmental registries that
would hold, on a confidential basis, companies and individuals cryptographic keys. Government law enforcement agencies would need a court order on
the basis that they had strong reason to believe a
crime was involved to gain access to these keys On the cards, by Perri 6 and Ivan Briscoe, is
available from Demos, 9 Bridewell Place, London
EC4V 6AP, UK. 9.95 (plus 60p p&p). Tel: +44 171 353 4479. Fax: +44 171 353 4481. New UK Benefit Payment Card Peter Lilley, UK Secretary of State for Social
Security, has announced that 19 million people are
to be issued with plastic payment cards for claiming
benefit. These will be linked to a computer system
which will contain personal details, such as
relatives maiden names, and holders may be asked random questions to ensure that they are who they
say they are. The cards will not be Smart Cards, but Mr Lilley
says the computer network will be a $smart# system capable of using Smart Cards in the future. The
new system will be phased in this Autumn for the
payment of benefits and utility bills. At the same time, the Commons Social Security
Committee reported that as many as one in five
claims for housing benefit could be fraudulent,
costing UK taxpayers up to 2 billion a year. The Committee called for an immediate
investigation of all private landlords who receive
more than 20 housing benefit payments each week,
and for a task force to establish the extend of fraud
over national insurance numbers after evidence that
millions of inactive numbers still exist. The report also wants a review of the Data
Protection Act which some investigators say is
hampering data matching schemes where benefit
claims, tax and employment records can be
compared. Smart Card News May 1996 1996 Smart Card News Ltd 104 Housing Benefit Fraud: Third Report of the Social Security Committee 1995-96; HMSO 11.50. CarteS SESAMES 
 96 Awards CarteS !96, the leading plastic card conference and exhibition in Europe, is creating the SESAMES !96 awards for the year s best innovation and application. The contest is open to all companies in the global
plastic card technologies and applications sector. A panel of judges will be formed consisting of five
journalists from the trade press in the United States,
United Kingdom, France, the Asia Pacific region
and Germany. Eurocard / MasterCard is the official
sponsor of SESAMES !96 which is also being supported by the Smart Card Club in the UK and
the Smart Card Forum in Germany. A spokesperson for CarteS said: $The SESAMES !96 contest represents a major and exciting event in
the market for plastic card technologies and
applications and will provide an outstanding
showcase for all of the year s new applications and innovations. # The closing date for entries is 30 June, 1996.
Persons withing to obtain entry forms or additional
information should contact Patsy Everett, Director,
Smart Card News, UK - Tel: +44 1273 626677.
Fax: +44 1273 624433. Cryptocontroller from Siemens Siemens Semiconductor Group has announced the
new SLE 44CR80S cryptocontroller for Smart
Cards and claims new standards in terms of
memory capacity and integration density. It says it is the first company to pack 17K bytes of
ROM, 8K bytes of EEPROM and 256 bytes of
internal RAM as well as a 540-bit coprocessor for
rapid processing of asymmetrical crypto algorithms
onto a chip area of less than 15 mm . The cryptocontroller is designed for applications
such as banking, electronic commerce via the
Internet and high security applications. Siemens says power consumption is typically 3mA
when operated at 3V. In sleep mode without an
external clock applied the current drain is even
reduced to as low as 35 A. The chip can be operated at 3V and 5V and frequencies of up to 5
MHz (7.5 MHz on request) without external clock
dividers. The EEPROM can be programmed with a page
width of 32 bytes at a rate of 3.5 ms per page. This
combined with the 76.8-kBaud data rate
additionally supported by the CPU produces a fast
data interchange via the serial interface. The 540 bit crypto-coprocessor supports all known
modular arithmetic based crypto algorithms. It also
offers short execution times of 220 ms for an RSA
512 bit standard encryption or of 450 ms for 1024
bit RSA employing the commonly used Chinese
Remainder Theorem. Siemens says the SLE 44CR80S is already
available in engineering samples with volume
production scheduled for summer 1996. Contact: Corporate Communications , Siemens AG - Tel: +49 89 234-0. Fax: +49 89 234-2824. ORGA Smart Road Show ORGA Card Systems (UK) is hosting a UK-wide
educational Road Show for businesses and
individuals who want to improve their knowledge
and understanding of Smart Cards. A total of six one-day seminars will be held from 9-
16 July at venues in Scotland, the North-West,
North-East, Midlands, South-West and London.
The seminars include presentations on Smart Cards,
their applications in various business sectors such
as banking, leisure, retail, security and
telecommunications, and demonstrations of
systems and equipment. The nominal cost is 25. Book by fax: +44 1491 410295. SuperPass Leisure Card Innovatron Data Systems has installed its
FUNCHIP Leisure system for the management of a
leisure centre in Les Balnéades in France. Some 4,000 reloadable Smart Cards (see front page)
have been issued with an electronic purse for May 1996 Smart Card News  1996 Smart Card News Ltd 105 purchases in Les Balnéades ! shops and with units to pay entrance charges. Smart Card Diary Plastic Card Payment Systems, Siam
Intercontinental Hotel, Bangkok, 4/5 June. Conference focussing on standardisation,
electronic purse applications, loyalty cards etc and
an overview of card systems in Thailand and Asia.
Centre for Management Technology: Ms Sukita,
Bangkok - Tel: +662 266 7767-8. Fax: +662 237
2189; Ms Sheelah John, Singapore - Tel: +65 345
7322. Fax +65 345 5928. Passenger Distribution 
96, Kuala Lampur, Malaysia, 24/25 June. A conference organised by IATA to exploure
enabling technologies and develop a common
vision of the future distribution system. Leanne
Donohue, IATA Seminar and Exhibition Services,
switzerland - Tel: +41 22 799 2757. Fax: +41 22
799 2674. Driving Strategic Change in Purchasing
Through Procurement Cards , The Cavendish Square Conference Centre, London, 8 July. A separately bookable one day workship, A
Practical Guide to Implementing your
Procurement Card Scheme, takes place on 9 July.
ICM - Tel: +44 171 436 5735. Fax: +44 171 436
5741. Cards Australia '96 Conference & Exhibition, Sydney Convention & Exhibition Centre, Sydney,
Australia, 20-22 August. Three-day trade exhibition and a multi-streamed
conference organised by the Asia Pacific Smart
Card Forum and AIC Exhibitions to cover Smart
Cards, Stored Value Cards and electronic purse,
co-branded/loyalty cards and procurement cards.
Erika Morton, AIC Exhibitions, Australia - Tel:
+61 2 210 5704. Fax: +61 2 223 9216. ICMA 6th Annual Card Manufacturing Expo , Bermuda, 21-25 October. The annual gathering of the International Card
Manufacturers Association which has taken $The Globalisation of the Plastic Card Industry # as this year s conference theme. Lynn McCullough at ICMA - Tel; +1 609 799 4900. Fax: +1 609 799 Sligos Sustains Recovery Groupe Sligos showed a net income of 88.7
million French francs, equivalent to a net margin
of 2.1%, for the year ended 31 December 1995. The Groupe says that 1995 was a watershed year
shaped by sustained recovery thanks to a return to
break-even of the Information Systems business
whose turnover increased by 7% over the year; a
refocusing on the Group s four core businesses and the divestment of CMG. It reports that early this year all of the business
segments won new contracts in promising areas
such as healthcare in France, the production of
phonecards in China, secure Internet transaction
payments systems, and large information systems
for the European Union and for French water
utilities. It forecasts that the current year should see a
continuation of growth, investment and recovery. Contact: Boris Eloy , Groupe Sligos - Tel: +33 1 49 00 96 33. 80% of UK Payments are in Cash Cash still accounts for over 80 per cent of all
payments in the UK and most people obtain their
spending money from one of the UK s 21,000 cash machines, says the Association for Payment
Clearing Services (APACS). Last year almost a quarter of the 1.4 billion withdrawn each week from cash machines was
taken out on a Friday while on an average Sunday
only about 88 million is withdrawn making it the quietest day of the week for withdrawals despite
the introduction of Sunday trading. In 1995 there was a 10 per cent increase in both
the number of withdrawals made from cash
machines and in the average amount of cash
withdrawn. Banks and building societies installed
over 700 new $remote# machines sited at various busy locations such as supermarkets and railway
stations. Contact: Richard Tyson-Davies , Head of Public Smart Card News May 1996 1996 Smart Card News Ltd 106 Affairs, APACS - Tel: +44 (0)171 711 6234. Fax:
+44 (0)171 256 5527. May 1996 Smart Card News  1996 Smart Card News Ltd 107 Electronic Commerce and
Payment Mechanisms Part 3 Authentication This is a primary security property that is used to
assure the receiver that a message comes from the
purported originator. The fundamental security
service is to authenticate the correspondent party
as part of an access control security service. In its
simplest form we are used to the use of passwords.
The receiver in this situation verifies the identity
of the other party by checking the validity of a
supplied password. There are a number of
problems here, in the first instance if we use a
static password then any listener on the line could
overhear the password and reestablish an
apparently genuine link at some later time. This
problem can be avoided by using dynamic
passwords where for each session a new password
is used. These passwords can be generated
algorithmically by using one way functions or can
more simply be applied by pre-storing tables of
passwords. The second problem relates to the
security of the password at the host site. Clearly
the passwords of all authorised users must be
stored in a secure way. Again the use of one way
functions allows the host to store the passwords as
the output of this one way function where the
inverse function of computing the password is
deemed practically infeasible. In the example quoted it is necessary for the user
to provide a secret as the core of the
authentication process. A better approach is to
provide proof that the user has knowledge of a
secret without actually revealing the secret. Fiat
and Shamir first proposed an identity verification
technique based on zero knowledge proofs. In
other words the verification process does not
provide any knowledge about the stored secret.
Quisquater and Guillou proposed a simple
explanation of this concept by describing a $secret cave # shown in figure 5. Here we have a cave with a secret door joining
two apparently dead end passages. The owner of
the secret knows how to open the door joining the
two passages A and B. The prover and verifier
start off by standing outside the entrance to the
cave. The prover rushes into the cave and travels
down one of the passages A or B. The verifier then comes into the cave and stands at the point X
where the two passages A and B diverge. He calls
out to the prover and requests him to emerge from
an arbitrarily chosen passage A or B. Because the
prover knows how to open the secret door
connecting the two passages he can always
emerge from the selected passage. Of course the
verifier can only be sure with a probability of 0.5
that the prover knows the secret because that is the
chance that the prover just selected to travel down
that passage. However, if you repeat the
experiment enough times and the prover always
manages to emerge correctly then the verifier can
be readily assured (1:2 number of trials ) that the prover does indeed know how to open the secret door. You can also see that no knowledge relating to
how the secret door is opened needs to be revealed
to the verifier. The mathematical equivalent of this
process is shown in figure 6. This identity verification technique suffers from
one major problem. When the prover and verifier
return to the office there is no way of proving to a
third party whether the prover succeeded in the
experiment. Indeed you would have to take a
trusted observer with you which is not a desirable
condition. The use of a challenge/response
protocol takes us a little further down the road.
This technique is the basis of many authentication
processes and is described in term of figure 7.
The verifier sends a random number challenge to
the prover who applies a cryptographic
transformation of the random number using his
secret key. The resulting cipher is returned to the Smart Card News May 1996 1996 Smart Card News Ltd 108 verifier for checking. If the cryptographic
algorithm is symmetric then the checking process
will need to use the same secret key. For an
asymmetric algorithm however the verification
process uses the matching public key. In the case of the asymmetric algorithm not only
has the prover satisfied the necessary
authentication process but it is possible for the
prover to demonstrate this to a third party. Only
the prover has the secret key used to generate the
cipher whilst the public key used to check the
response can be distributed to any other party for
checking. The property of non-repudiation is also achieved
here since the prover cannot subsequently deny
his actions. Symmetric algorithms however still
suffer from a few short comings since the prover
could deny having created the response because
the verifier has the same cryptographic secret key
and could have invented the whole message
exchange. Thus the evidence to a third party relies
on trusting the verifier. Even worse, for a third
party to verify the correctness of the challenge
response he needs to be provided with the same
secret key. In practice the application of such authentication
techniques need to ensure that the possibility of
replaying previous message exchanges can be
avoided. This is usually accomplished by
including additional data fields into the challenge
data so that in addition to the random element a
time stamp or sequence number is built into the
cryptographic process. May 1996 Smart Card News  1996 Smart Card News Ltd 109 Multi-Service Puzzle Cards DANMØNT has announced that the first of 5,000
new card-operated payphones from Tele Denmark
are now being installed throughout the greater
Copenhagen area and by Christmas 1997 all card
payphones in Denmark will accept the
DANMØNT electronic purse card as means of
payment. To $celebrate# the start of this major installation of card payphones and to inform everyone who buys
a DANMØNT card about the many opportunities
they have for using their cards in different
environments, DANMØNT has issued four cards
forming a Multi-Service Puzzle (see below)
showing the different services the card can be
used for - telephones, parking meters, vending
machines, laundrettes, POS terminals in kiosks,
stamp vending machines etc. The cards, supplied by Philips Smart Cards &
Systems of France, each have a value of DKK 100.
Information on card use is also written on side
two of the cards together with information about
the other three cards in the series. DANMØNT reports that in 1995 it issued 258,887
cards mainly with the values of DKK 100 and
DKK 200 and in the same period the cards were
used 2.1 million times. Since the start-up of the
system in 1992, the yearly increase in transactions
has been over 100 per cent. So far, more than 120 different designs have been
issued during the last four years, attracting interest
from collectors all over the world. Contact: Henning N. Jensen , Managing Director, DANMØNT - Tel: +45 43 44 99 99. Fax: +45 43
44 90 30 .

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