Ben Miller, who runs the annual Cardtech/Securtech conferences, has a way of sending messages with his choices of keynote speakers.

At the formal opening of the 1999 meeting, held last week in Chicago, Mr. Miller stood silently by as the British science historian and journalist James Burke took to the stage without the benefit of a lengthy introduction.

Mr. Burke spent most of 90 minutes doing what he did on the public television "Connections" series, showing how modern amenities, customs, and conveniences emerged from centuries of intellectual and scientific progress, one innovation piled on top of the next.

Mr. Burke professed to know little about "your world," as he told his audience of smart card and biometric technology marketers and advocates. In his speech was hardly a mention of the silicon chip that made the smart card and so much else possible.

But in the most general sense, Mr. Burke's topic-invention-had everything to do with his listeners' world. They have not made the most of their invention, judging from the track record of smart cards. Mr. Miller no doubt wanted to focus minds on that.

Plastic cards enhanced with computer chips have lived up to few of the expectations expressed in the eight prior years of Cardtech/Securtech. Though they have made visible progress in some parts of the world, the crucial U.S. market is not one of them.

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Its U.S. location notwithstanding, Cardtech/Securtech is the biggest conference on smart cards in the world. This year its technology exhibition, occupying almost 1,000 booth spaces at McCormick Place South in Chicago, logged more than 10,000 visitors. There were about 1,450 who paid to attend four days of seminar programs, which included 220 speakers.

The conference has a global appeal and is a clear success for Thomson Financial, which acquired Cardtech/Securtech from Mr. Miller at the end of 1997. (American Banker is also a part of Thomson Financial, a unit of Thomson Corp. of Canada.)

Even as the smart card struggles for acceptance, its community seems to get Mr. Miller's implicit message in recruiting Mr. Burke. It reveres its own history of invention and may now be realistically facing up to its business limitations.

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Visa International senior vice president Mary Buckley sounded like a throwback when she predicted a "dramatic acceleration" of smart card rollouts worldwide. But she was speaking in the very current context of the Common Electronic Purse Specifications, one of the proposed standards that many industry observers say will have to be agreed upon for smart cards to realize some mass-market potential.

"We know it's a challenge to move the market, but we are going at it," said Philip Yen, also a Visa senior vice president, in remarks about the Open Platform, another set of specifications championed by his association.

Steve Mott, a former MasterCard International executive who heads a Connecticut consulting firm, BetterBuyDesign.com, steered clear of any firm prediction but spoke to what many bankers have been waiting for: "The business case may not be as weak as it was a year or two ago" because of growing concerns about Internet fraud, which advanced card and authentication technologies might prevent.

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MasterCard vice president Michael Tempora asserted that the emphasis on a smart card business case is misplaced. It should be viewed as "not a product (but rather) a delivery system to allow multiple benefits to be delivered to specific customer segments."

He said no one in the early days of the chip's predecessor, magnetic stripe encoding systems, got into any "business case" argument. "There were specific needs that the magnetic stripe fulfilled," Mr. Tempora said, adding that chip cards will do the same in "supporting the overall customer relationship."

He also cited projections from the research firm Datamonitor that though the United States will have 50 million smart cards this year, versus Europe's one billion, the U.S. compound annual growth rate through 2002 will be 107%, to reach 380 million. Europe would grow only 14% annually, to 1.8 billion. The Asia-Pacific region, now at 380 million, would increase by 36% annually, to 1.3 billion.

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When an audience member asked Mr. Burke who was his favorite inventor, he said Thomas Edison. But then he paused and said he probably did not know who most deserved that designation because the best "noodling" occurs away from the public eye and may never come to light.

Mr. Burke did not know that as part of a preconference panel discussion the afternoon before his address, the French smart card expert Charles Copin provided a review of early and influential smart card patents-won by people who are anything but anonymous, and in fact quite honored, in their world.

Mr. Copin, who as head of the publishing firm Analyses et Syntheses and originator of the annual Cartes conferences is the Ben Miller of France, pointed out that a 1972 U.S. patent was the first to propose a link between a chip and a credit card.

But today's smart card is more directly derived from the 1974 patent of French inventor Roland Moreno. That was followed a few years later by Michel Ugon of what was then Honeywell-Bull, with SPOM-the self- programmable one-chip memory.

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Mr. Copin said Mr. Moreno preferred that his "portable object" be worn as a ring, but in the 1980s the French banking system seized on the "chip on card" idea as a way to improve payment security. At the time, telephone lines were relatively scarce and expensive, making credit card authorizations prohibitive.

In that unexpected twist, Mr. Moreno had something in common with Alexander Graham Bell.

Michael Keegan, the chief executive officer of Mondex International Ltd., the London-based smart card subsidiary of MasterCard International, said the inventor of the telephone thought that its "killer application" would be transmissions of music, not conversations.

Bell said, in Mr. Keegan's telling, that "anybody I might want to talk to is but a carriage-ride away."

Mr. Keegan drew this moral: "The technology is the easy part. It's what you do with it that is the hard part."

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John McGuire, the chief executive officer of Trintech Group of Ireland and Silicon Valley, offered yet another James Burke-like historical reference: to the Erie Canal.

The connection between Lake Erie and the Hudson River revolutionized early 19th-century commerce, but people enthralled with it failed to foresee how railroads would "open up an entire continent" within 50 years.

"We have a similar situation now," Mr. McGuire said, referring to the advent of Internet commerce and the excitement of being "at the epicenter of this change."

But Mr. McGuire, who sells on-line payments software to banks and others participating in the electronic commerce boom, has criticized bankers for not moving fast enough.

"Banks own this franchise" of retail transaction processing in the physical world, "but there is a potential that they can lose it," Mr. McGuire said. "They must step up to the mark. They do not have to die like the canal operators did. If they embrace change, they can be the railroad barons of the future."

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A more recent generation of inventor, associated with Mondex electronic cash, surfaced this month in a new corporate vehicle.

Natwest Group of London announced the creation of Platform Seven, a "center of smart card expertise" headed by Graham Higgins. Mr. Higgins shares credit for original Mondex patents with Tim Jones, who was Mondex's first CEO and has since risen to head Natwest's retail banking business.

Platform Seven was formerly the Natwest Development Team, the research and development unit that produced Mondex and its multiple-application operating system, Multos. Natwest Group still controls Platform Seven but emphasizes its independence to maintain "strict client confidentiality" in its development of "highly secure software products."

"Secure smart card solutions are set to become some of the world's most wanted products in the next millennium," said Mr. Higgins. "There are infinite applications for smart cards (that) will touch everyone's lives in the not-too-distant future. Ensuring the appropriate level of security for each application is vital, and Platform Seven will produce products to achieve this."

The "Seven" refers to the high level of security assurance that the unit aspires to. Platform Seven worked with the United Kingdom's Communications- Electronics Security Group, or CESG, on a methodology for evaluating physical security of smart cards under the certification system known as ITSEC-Information Technology Security Evaluation Criteria.

ITSEC and an international refinement of it, known as the Common Criteria, have become rallying points for smart card organizations that want to send positive messages about their attention to security details. Officials of Platform Seven and CESG, sponsor of the U.K.'s ITSEC certification effort, said they expect their efforts to carry over to Common Criteria, under which the highest evaluation mark is "level seven."

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Despite Natwest's Mondex legacy and the influential presences of MasterCard and Visa at Cardtech/Securtech and in the card technology industry at large, the banker population at the 1999 conference was down noticeably.

Official attendance rolls are not released, but vendors in the exhibit hall said they encountered few U.S. bankers. Given that the conference is on their home turf, they might otherwise be expected to be out in force, relative to foreigners. They may be discouraged or apathetic or preoccupied by other priorities such as year-2000 software upgrading.

Bankers were well represented, perhaps disproportionately, on the speakers' roster. We counted 10. They included Toni Merschen, Citibank's director of chip card and access technology, who was a session moderator, and Chet Thompson, senior vice president of Huntington Bancshares in Columbus, Ohio, who spoke about an internal employee identification card system.

Among those from other countries were Steve Collins and Bill Perry, both of Barclays Bank of London, on digital certificates and biometric identification, respectively; and Juan B. Mesa of Banco Inbursa in Mexico, which is issuing upward of 200 million disposable smart cards this year.

Nineteen other speakers work for bank-owned joint ventures or associations, including MasterCard, Visa, and the American Bankers Association. Also represented were American Express Co. and Merrill Lynch & Co., the latter showcasing its work with Microsoft Corp.'s Smart Card for Windows program.

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Banks and banking applications were front-and-center in numerous presentations by others, who continue to view the financial industry as an important mover of the technology into the mainstream.

Yael Zheng, group marketing manager for Sun Microsystems Inc., made financial services a central element in a presentation on the leading-edge topic of Internet appliances.

"More and more financial service providers are offering services on- line," she said. "Deployment of smart cards will help in the deployment of services through appliances" such as set-top boxes and screen telephones.

As Ms. Zheng showed a series of slides on how these technologies can benefit various participants, one came up titled "Banking Industry Goals."

For a few moments, because of some kind of glitch, the list of goals did not appear. Ms. Zheng broke the silence by saying, "I guess we don't have any," prompting ironic laughter.

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Some industry watchers are waiting for a dramatic shoe to drop-a compatibility agreement that would reduce the technical barriers between Visa's Open Platform and the MasterCard-Mondex Multos operating system.

Industry cooperation seems to be running at a high level. Microsoft and its archrival Sun, owner of the Java programming language and Java Card applications programming interface, both saw fit to license Open Platform and a file-structure framework developed by American Express, which in turn has licensed Multos and owns a piece of Proton World International, as does Visa.

Visa U.S.A. senior vice president Diana Knox said these connections are signs of an industry "coming of age," moving toward a level of interoperability that will make more companies more comfortable about making capital investments.

Officially, MasterCard and Visa people remain mum about whatever they are talking about privately. Mr. Keegan of Mondex and Mr. Yen of Visa gave firm "no comments" last week.

In a quieter aside with a reporter, Mr. Yen elaborated. "We are committed to working with MasterCard," he said. "We are committed to making life easier for banks operating on the Multos platform to work with our platform."

But he implied that it would be unrealistic to expect the two organizations to move to a "single platform." That would lend credence to a prediction by Duncan Brown, an analyst at Ovum Inc. in Boston, that the two sides would find a way to be "compatible but not convergent."

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The Singapore LAN Transport Association and Chicago O'Hare International Airport were the winners of two industry awards presented at a banquet on the last night of the conference.

The Outstanding Smart Card award, given by the Smart Card Industry Association, honored Singapore's transportation agency for its use of contactless smart card technology on an electronic toll road.

The Larry Linden Innovative Security Application award, presented by Cardtech/Securtech, went to O'Hare Airport for its air cargo security access system. The system combines smart cards and biometrics to authenticate the fingerprints of truck drivers who deliver cargo to the airport. The smart card technology is from Schlumberger, with biometric identification tools by Identix.

Four runners-up for the Larry Linden award were: Mercedes Benz, which has designed an automobile that can be unlocked and started using a contactless smart card system; Barclays Bank, which is offering customers smart cards containing digital certificates for electronic transactions; Union Bank of Switzerland, which uses cards for security within the company; and Colt Manufacturing, which used smart card technology as a security feature in a handgun.

In another demonstration of Chicago's smart card efforts, the Chicago Transit Authority used Cardtech as a pilot for contactless card use on its buses and trains. Of 11,000 smart cards issued to conference attendees, 2,500 came with an extra chip loaded with $1.50 for use on Chicago's transit system. Gemplus paid the $3,750 tab.

Those who required a larger transportation budget could load cash on their cards at a Cubic Transportation Systems machine near the registration booths.

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