Only in France, where smart cards got their start, could there be a 13th annual conference on the subject.
Dubbed Cartes '98, the event had the same old "smart card prosperity is just around the corner" theme. But it also offered something brand new: Microsoft Corp. stepping forward to champion the technology, and everyone else scrambling to figure out what that endorsement meant.
Microsoft chose the convention last week, produced by Charles Copin of the publishing firm Analyses et Syntheses, for the grand announcement of Smart Card for Windows, a proposed standard operating platform based on the otherwise ubiquitous Windows code for personal computers and business networks.
Though surprising almost no one with its little-kept secret, Microsoft electrified the seminar crowd, estimated at 1,000, and many more among the 12,000 who passed through exhibits and workshops.
The software giant upset what passed for equilibrium-a high-profile tug- of-war between Visa's Java-language-based specification and the Multos system of MasterCard-Mondex, plus a host of more proprietary systems deployed by various vendors.
The general reaction was positive: that the industry can accommodate two or three standards with a degree of both competition and interoperability that would benefit everyone.
Though many vendors and product developers focused on the merits of interoperability, the enthusiasm for Microsoft centered on the increased visibility and legitimacy it would give to smart cards, especially in the United States, which all Europeans know to be in the pre-smart-card Dark Ages.
"Both Java Card and Multos are severely threatened," prophesied Duncan Brown, senior consultant with the British-based research and analysis firm Ovum Ltd.
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Is the Windows Card really a threat? And to whom?
One thing different about Microsoft is that its business case is consumer-driven. But in the card industry, issuers control decisions on applications.
The Microsoft "white card" approach is premised on end users' loading their own applications. It is the desktop computer model, which is in direct opposition to the way banks centrally manage their service choices.
Within the European Union, guidelines (and sometimes regulations) from central banks specify that chartered financial institutions be involved in any card that includes a payment function. In tune with the European deliberations, staff members at the Federal Reserve System have quietly acknowledged that a similar requirement might be imposed in the United States.
If the banks don't want Windows for their multi-application card offers to retail customers, Microsoft's product could be limited to single-use and proprietary, closed systems.
Furthermore, the Microsoft product seems geared to the wired American market, with the card serving as an electronic key. Europe, where over 80% of the world's smart cards are actually used, operates in a predominately off-line environment.
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No one questioned the ability of Microsoft to throw around the weight of its vast installed base. But there was much head-scratching about exactly what it was that Microsoft was pushing.
Observers suggested Windows Card probably would have an impact on consumer acceptance of smart cards-eventually-but for the moment it is just a tarted-up security card to support financial industry transactions on Windows NT platforms. The announced pilot with Merrill Lynch uses smart cards to replace passwords with the "potential to be used later" as a prepaid card in the cafeteria, for building access, and so forth.
When asked about other applications, responses from Craig Mundie, senior vice president of Microsoft's consumer platforms division, and his cohorts ranged from "it's under consideration" to "we haven't addressed that yet."
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Eventually, pundits came around to thinking Microsoft's real target is Sun Microsystems and its Java language.
Nick Habgood, chief executive officer of Maosco, overseer of the Multos specifications, offered a sober, even friendly assessment: Microsoft "could turn out to be an ally or even a business partner," he said. "Realize that banks are already using Multos cards for security on Windows NT systems. We use our own programming language, but we also can use the C languages. The Multos applications are compatible, not competitive with the Microsoft operating system."
"For years we've been talking about a smart card as a product, and I believe we need to adjust our perspective and see it as an infrastructure," he added, citing a difference between applications that sell cards-like loyalty-and infrastructure components like the Internet and television set- top boxes. "Once the infrastructure is in place, market dynamics will begin to create applications that possibly aren't considered viable by current industry players.
Mondex International and smart card leader Gemplus introduced loyalty systems. Gemplus International chairman Marc Lassus predicted "loyalty cards and couponing will open the American market to smart cards and become the largest smart card application there."
