Cardtech/Securtech, which has held several highly successful conferences on smart cards and related technological advances, took its show on the road last week -- to the Silicon Valley.

In an effort to involve companies from the heart of the high-tech community in the development of a new infrastructure for electronic payments and secure identification, a smaller version of Cardtech/Securtech took place in Santa Clara, Calif.

The meeting attracted some 800 people from the likes of Hewlett-Packard, Intel, General Instrument, and Scientific Atlanta, and 40 exhibitors.

The moment had arrived to generate broader support for the plastic cards carrying the chips Silicon Valley made famous, said Benjamin Miller, a Rockville, Md.-based consultant and newsletter publisher who served as conference chairman. "We want people to realize there's an opportunity to build new business."

Once the electronics industry gets on board, Mr. Miller said, the prices of card readers and devices will come down and new services will be created. At the same time, there will be an outgrowth of new applications in telecommunications, health care, government benefits, and the like.

Carl Pascarella, president of Visa U.S.A., which is based in the San Francisco area north of Silicon Valley, gave the keynote speech and focused on the difficulty of preparing for the future.

"This group especially knows how mercurial the future can be, with one technology replacing another before it even reaches the marketplace," he said.

During an executive briefing for about 30 of the Silicon Valley's leaders, marketing and public relations consultant Regis McKenna said the smart card industry will look totally different in five years from what most prognosticators see today.

He advised his audience to attend to both "the market...and the technology. By and large, the mistake that most companies make is that they begin extracting themselves from the very marketplace that is driving the technology."

Companies should look at smart cards as a way of building customer loyalty, not as a commodity product, Mr. McKenna added. "We are in the information business and information is the heart of creating differentiation for our products."

In the payment industry, reacting to change means evolving to more sophisticated market segmentation, Mr. Pascarella said. "We have begun thinking outside present-day parameters by defining new markets."

Ultimately, Visa plans for the day when banks can offer consumers relationship cards.

"The chip card is an integral part of the relationship card because it allows access to and management of individual customer data," Visa's U.S. chief said. "In essence, it becomes the key to the customer's bank."

The imagery of a smart card as a "key" was repeated throughout the conference.

Bill Murray, a Deloitte & Touche security expert, cited the benefits of using smart cards bolstered by cryptography as a secure way to conduct electronic commerce. "Limit trust to the simplest and smallest domain possible," he said, alluding to the smart card.

Catherine Allen, a Citibank vice president and chairman of the Smart Card Forum, said a "multiapplication" business case can be made for a smart card as payment card, access key to information, manager of information, and customized delivery system.

While Cardtech/Securtech carried its message to Silicon Valley, the Bank Administration Institute's retail delivery systems conference in Phoenix was illustrating how quickly the banking industry is embracing the technology.

Several vendors exhibited smart card products. Verifone Inc. and Hypercom Inc., the two leaders in point of sale card-reading equipment, released chip-accepting devices.

Several hundred people attended a panel discussion on smart cards, including Ms. Allen and led by the California-based consultant Jerome Svigals.

When BankAmerica Corp. vice chairman Lewis Coleman was asked, after his keynote address, whether and when the market will be ready for smart cards, he answered, "Yes. Now."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.