After more than half a year of preliminaries, a multi-industry smart card association is officially up and running.

The group, calling itself the Smart Card Forum, includes some big names and somewhat strange bedfellows: American Express and Citicorp, AT&T and IBM, Apple Computer and Microsoft, and about 25 others.

The membership mix is not quite complete. MAC, the joint venture of four banks that is well along in planning for a smart-card payment system, is conspicuously absent.

But the initial members certainly have clout. They have agreed they can accomplish more together than seperately, said Catherine Allen, a Citicorp vice president and acting chairman of the Smart Card Forum.

"In a closed corporate system, you don't necessarily have to work with others," said Ms. Allen, who personally and on Citicorp's behalf was a driving force in creating the forum.

No Longer a Lone Wolf

That Citicorp played such a central role was news in itself. (See related article on page 15.) Historically a lone technological wolf. Citicorp once insisted on using systems of its own making, including a nonconforming data-encoding method for its cards.

"Times have changed," said Ms. Allen, reflecting the outlook of her boss, senior technology officer Colin Crook, and his boss, chairman John Reed.

The participants think they have the power and influence to make the technology go in the United States. It is a goal that so far has only frustrated the few enthusiasts who have exerted any effort.

France and Japan Lead

The technology, which involves placing a microcomputer chip inside a plastic card, has met the most success in France and Japan. But most of the applications are limited -- cards used for telephone calls or transit rides generally are not interchangeable.

Behind the Smart Card Forum is a desire for "open systems" and to do what it takes, in the form of technical standards and eventually market tests, to prove their feasibility.

Aside from telephone and transit usage, smart card systems are at some stage of exploration by the banking, health care, and government sectors, among others. Theoretically, with enough cooperation and effective standards, a single card could become almost as "univeral" as a MasterCard or Visa credit card.

MasterCard International and Visa International, which have done their share of research on card technologies have joined the Smart Card Forum.

"Our objective is to foster communications across industries and the public sector that will result in North American market trials of smart-card-based payments and information services within a few years," said Ms. Allen.

Not only has Citicorp changed its tune on technology sharing. It is winning praise by association as the Smart Card Forum has reached the incorporation stage and is preparing for its first open membership meeting on Sept. 30-Oct. 1 in Tysons Corner, Va.

Jerome Svigals, a Redwood City, Calif., technology consultant and longtime smart card advocate, called the group and its strategy "very constructive."

Toward an Open System

"Conceptually, it's right," said Ben Miller, a close observer of the technology as publisher of Personal Identification News, Silver Spring, Md. "They are cooperating and moving toward an open system."

"The key word is |interoperability,'" said MasterCard vice president Lawrence Ladouceur, citing a term that the Smart Card Forum has adopted as most descriptive of its goal.

"Some of the issues the forum is addressing." he said, "could bring pressure [on standards-setting committees] to finish standards that aren't finished, or to create the standards we need for this technology to work."

The Smart Card Forum is even being praised for not stepping on the toes of other constituencies.

"They have been open in their communications," said Sean Kennedy, president of the Electronic Funds Transfer Association in Herndon, Va. He said the Smart Card Forum has avoided competing with the EFT Association's advanced card applications group, in which Ms. Allen has participated.

"Our agenda is more educational and networking in nature, while they want t get at the business issues involved in creating an open environment," Mr. Kennedy said. "They want to be a catalyst to move the technology along" - an intent that the EFT group can endorse.

"Cathy Allen has made it clear that they don't see this as an ongoing trade association - they see a finite life to it," Mr. Kennedy said.

Not an Easy Task

But none of the forum participants are under any illusion that their work will be easy.

In its first press release on Aug. 4, after a series of meetings dating back to last year, the forum said it remains "in the formation stage, focusing on user needs and analysis of business specifications for smart cards."

"The smart card industry is ready to mushroom," said Rich Mandelbaum, chief scientist at AT&T's smart card systems unit. "The market needs exist and the technology is proven. By expediting the implementation of this technology, the Smart Card Forum can help achieve the widespread us of smart cards in the U.S."

Other joiners - paying $1,000 to $15,000 - include Bank of Montreal, BayBanks Inc., Microcard Technologies Inc., the Washington Post Co., Toshiba America, the U.S. Treasury, and Verifone Inc.

Most of the member technology companies make or cooperate in smart card systems; the banks and other potential users have done early-stage research.

The group sees some sense of urgency for technical standards. It is projecting that 1.25 billion prepaid, r stored-value, chip cards - for telephones, vending machines, highway toll collections, and the like - will be issued worldwide by 1995, and payment volume will reach $20 billion by 2000.

The forum has committees in several areas: payments, financial and information services, telephony, electronic benefits transfer, and health care.

"They have literally hundreds of technical, political, business, and system hurdles t get to an open system," said Mr. Miller, the newsletter publisher.

He listed two immediate needs: getting MAC to join and naming an executive director to replace PSI, the Tampa, Fla., research firm that has been providing administrative support.

MAC may be reluctant because of the head start with prepaid cards it has gotten through a test in Philadelphia. Regardless, Mr. Miller said the naming of a strong executive director is crucial, and has been appropriately postponed until a permanent board is installed.

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