Bull CP8, the smart card division of Group Bull of France, has announced a strategic alliance with Racom Systems, Englewood, Colo., to develop and market contactless smart card transaction systems.

Bull said it would combine its expertise in financial transaction systems, high-volume card manufacturing, and cryptography with Racom's contactless card technology.

In contactless systems, the computer chip in the card does not have to make physical contact with a terminal,

Also championed by AT&T Corp., contactless cards are seen as useful in the fare-collection. toll-collection, customer-Joyalty, electronic-purse. leisure. and automated-rending markets.

Bull, a smart card pioneer and the leading supplier of the technology to banks, said the alliance could meet demand for a single, multifunction, multiapplication card that complied with a broad range of technical standards. including those for conventional magnetic stripes and contact chips.

Bull and Racom said they expect to increase their share of a smart card market that was growing 40% annually and is expected to exceed $1 billion by 1996.

The alliance enables Bull CP8 to market Ratom products under its own name and to integrate contactless technology into Bull's contact card readers.

Bull has been producing smart cards since their introduction in France in the 1970s, and its operating systems and protocols have become an industry standard through widespread licensing.

Racom, which specializes in radio-frequency transmission systems, said its products are protected by 40 patents.

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