Some conference organizers pride themselves on their educational missions and senses of history, but those of Cardtech/Securtech may have set a new standard.

The opening presenter last Tuesday was the Renaissance man himself, Leonardo Da Vinci.

Preceded by a high-tech multimedia montage, an elaborately robed, gray- bearded Leonardo-actually a New York actor scripted by the Cardtech staff- spoke forcefully on the conference theme, "The Art of Implementation."

"Seek harmony between form and function," he said. ''Know your tools, trust the people, and remember your audience."

Meanwhile, images of the Mona Lisa and other masterpieces flashed on video screens in the Orange County Convention Center, where more than 7,000 people visited exhibits and attended seminars in the world's largest annual gathering on card systems and biometrics.

The Leonardo character ended his presentation with a quote from Walt Disney, appropriate to the Orlando setting: "If you can dream it, you can do it."

The smart card dreamers who have fueled Cardtech/Securtech's seven-year run have had to learn patience.

When the Smart Card Industry Association, a conference co-sponsor, brought together several top executives of supplier companies for a "state of the industry" assessment, questions kept coming up about inadequate business cases and failures to meet expectations.

In the early 1980s, it was noted, the smart card market was expected to explode within three years. That is still what people are saying: Various projections call for two billion to four billion chip cards to be produced worldwide in 2000, up from 700 million to 800 million last year.

The executives-including Jacques Cosnefroy, Schlumberger's general manager for smart cards; Alain Couder, senior executive vice president, Bull PTS; and David Stonely, president, De la Rue Transaction Systems Division-did all they could to turn attention away from the difficult North American market to progress they are making on other continents and in telephony, pay television, and other industries besides banking.

"The U.S. is a market-driven economy with layers and layers of decision- making," said Volker Bartholomaei, president and chief executive officer of Giesecke & Devrient America Inc. That may explain, he said, why many of the technology's success stories have been in more "controlled economies."

Mr. Bartholomaei delivered the best line of the night when he said, "The only one who is making money on smart cards is Ben Miller," the chairman of Cardtech/Securtech.

But the general optimism was typified by Marc Lassus, chairman of Gemplus Group. "Bill Gates should be worried, because he addresses only 1% of the people on the planet," those with personal computers, Mr. Lassus said. "We will address 100% in health care, telecommunications, transportation, banking."

Glenn Highland, president and CEO of DataCard Corp., warned the U.S.- and banking-centric in the audience to beware of "industry renegades"- unanticipated innovators capable of reshaping an industry and changing competitive assumptions overnight.

Not coincidentally, Mr. Highland sounded much like Gary Hamel, the eminent strategist who spoke during preconference workshops last Monday. Data-Card is one of Mr. Hamel's clients.

Mr. Hamel, head of a consulting firm called Strategos and co-author of "Competing for the Future," asked, "Who is in charge of the transformation in your industry?"

They tend to be "rulebreakers," he said, as MCI was in the long-distance market and Federal Express in package delivery.

"Nescafe was the No. 1 coffee brand in the world," Mr. Hamel said. "Imagine how it must have felt after 100 years to see Starbucks become a bigger brand in the United States.

"Don't tell me the same thing can't happen to a bank or credit card company."

George Wallner, chairman of the terminal manufacturer Hypercom Corp., stirred up a symposium on "Changing the Face of Money" with a contrarian argument.

The conventional wisdom calls for development and distribution of new cards and processing infrastructures, which Mr. Wallner contended cannot pass muster with those controlling corporate purse strings.

"It's a great concept-the future of electronic payment is tied to the chip card," Mr. Wallner said. "The problem is its costs. Pilots work wonderfully, but when it comes to a rollout, the CFO makes the decision-and when it doesn't make commercial sense, there is no rollout."

Even though magnetic stripe technology has been outmoded for a decade, it has been shored up with security enhancements. It may be getting even more effective as the telecommunications needed for on-line card authorizations has become more available and affordable around the world.

Mr. Wallner proposes a more incremental approach that he has dubbed ChipStripe: add a cheap chip to today's magnetic-stripe credit cards, one that serves a security purpose at far less than the $5 or more it can cost to produce a full-scale chip card.

"Chip-centric thinking must be replaced with on-line server thinking, where the chip is primarily used for security," he said.

Mr. Wallner added that on-line service should be embraced, not avoided as in the early chip-card business model. "Off-line is a costly utility," he said. "On-line is a means of delivering service-and banks are in a service industry.

"Have you ever heard of off-line electronic commerce?"

United Kingdom banks seem to be on Mr. Wallner's side. Not seeing a business case for stored cash values in chip cards but concerned about fraud, the Association for Payment and Clearing Services sees smart cards as "a solution to the threat of counterfeit and fraud," said Roger Alexander, head of Barclays Bank's emerging markets group.

Starting with a pilot later this year in Northampton and Dunfermline, the U.K. banks will build an infrastructure and add other applications as they become cost-justified, "but the rationale for the U.K. today is card authentication," Mr. Alexander said.

"This is a journey that will take time," he said.

The conference keynoter, Michael Dertouzos of Massachusetts Institute of Technology, barely touched upon smart cards in a grand tour of the high- tech horizon.

The director of MIT's Laboratory for Computer Science called into a computer at the lab that can understand spoken words well enough to provide weather forecasts for hundreds of cities around the globe.

Simply talking to a computer "is much more natural than keyboards," he said. "We are all born with a mouth and ears."

He predicted smart cards would be "a dominant part of life" as the cost- benefits of electronic transactions become ever more pronounced. But he advised his listeners not to "cram too much intelligence on one card."

While attendance was up by 20% from the last Cardtech show, in Atlanta, the exhibition floor was 70% bigger, with 560 booths. There was a noticeable jump in biometric identification vendors, particularly in the fingerprint area.

To attract attention in the bazaar, the French card producer Bull hired a magician who wowed guests with (playing) card tricks and sleight of hand. Throwing out terms like security and service, hallmarks of Bull products, the entertainer made cards disappear and rabbits multiply.

He invited spectators to visit the booth, but many seemed to disperse, apparently anticipating an anticlimax.

Visa International, meanwhile, tried to make news with Bank of America by demonstrating the purchase of a Father's Day card over the Internet using a Visa Cash card. Visa and Bank of America announced an Internet pilot of Visa Cash to begin this summer with several hundred employees.

Continuing a Cardtech comedy tradition, Mr. Miller, the Cardtech/Securtech chairman, invited the political satirist and former "Saturday Night Live" writer Al Franken to speak at the Wednesday night banquet. His smart card and security jokes were about the only ones repeatable in a family newspaper.

Like all attendees, he said, he received the conference smart card with $4 in stored value. "I'll tell you what-I'll sell this for $2.50. See me afterwards."

Referring to the controversy over exporting data encryption technology, Mr. Franken also wanted to "apologize for making those of you from outside our country have to leave the room for the cryptography presentations."

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