Huntington Bancshares has fattened the growing ranks of banks in the smart card business through a joint venture with Sallie Mae and Battelle.
The three companies were partners in a test of the plastic cards with embedded computer chips at Battelle headquarters in Columbus, Ohio, last December.
Last Friday they signed a letter of intent to market the cards jointly to universities, corporate campuses, and other closed environments.
The Student Loan Marketing Association, or Sallie Mae, will provide the smart card system its Cybermark subsidiary developed with Battelle over the past three years. The system will be the basis for the new venture's products and services.
Columbus-based Huntington will contribute cash as well as technology to the company that will be equally owned by the three partners and headquartered in Columbus.
Battelle, a nonprofit technology developer, will contribute further technological expertise in lieu of cash.
Sallie Mae had put Cybermark up for sale last year, after investing heavily in the technology. Ross Kleinman, Sallie Mae spokesman, said the new venture would enable the loan processor to focus more resources on its core businesses while keeping its hand in smart card production.
The new company, which doesn't yet have a name, already has a client - Ohio Dominican College, also in Columbus. All 1,700 of its students will get new identification cards in August with chips and magnetic stripes. The chips will function as an electronic purse, usable in the campus cafeteria and bookstore and at vending machines, as well as for building and dorm access and library use.
The magnetic stripe will allow transfer of money from the cardholder's Huntington bank account to the chip through upgraded automated teller machines or specially designed kiosks on campus. Value also can be loaded onto cards through machines that accept cash.
First of America Inc., a Kalamazoo, Mich., banking company, put similar systems on campuses at Western Michigan University and the University of Michigan. These programs could grow to more than 100,000 cards. More than 200 merchants around the campuses are expected to accept the chip cards.
Florida State University plans to upgrade its multifunctioning magnetic stripe card to employ chips this year. Along with electronic purse, building access, and long distance calling functions, the new chip cards will offer secure access to university documents via on-line networks like the Internet.
Peter Geier, Huntington's executive vice president of consumer services, said Ohio Dominican's program "clearly has functionality for Internet access," although that capability will not initially be activated.
Plans for the Ohio venture include expansion to open systems - like Visa International's smart card test at the Summer Olympic Games in Atlanta, MasterCard's pilot in Canberra, Australia, or the recently announced plans of Visa, MasterCard, Citicorp, and Chase Manhattan Corp. to bring smart cards to New York City.
Dan Cunningham, former general manager of Gemplus, the smart card maker, worked with the three partners, supplying cards for the Battelle test.
He called their smart card program comprehensive. "If they can complete development and rollout," he said, "I think they'll have a good system."
Mr. Cunningham said Huntington's participation is a "good move .... By buying a complete system they gain some valuable time to market."