Citigroup Inc. has signed up Sun Microsystems Inc. as the first corporate customer for its multi-application smart cards, extending its secure-access chip card program with the government into the private sector.

Sun, the developer of Java card technology, which many industry experts consider the platform of choice for smart card developers, said it will issue the cards to its 35,000 employees around the world this year. The cards offer secure access to employee computers, digital certificates for signing electronic business-to-business transactions, and automatic entry into corporate buildings.

"This is a key strategic program for Citigroup e-Business," said Judy Bodner, vice president of Citigroup e-Business smart card division. "Smart cards are a key secure-access mechanism for us."

Ms. Bodner said the most significant aspect of the chip card program is its ability to provide digital certificates for online transactions. "We're providing them with the foundation for secure e-commerce applications," she said. "Our programs provide a highly secure key for conducting business on the Internet."

Unlike Citi's 450 secure-access multi-application cards used by the General Services Administration, the cards for Sun will not initially include a payment application. Citigroup e-Business, the company's smart card division, said it is discussing this possibility with Sun and hopes to add payment soon. The GSA cards have a chip and a magnetic stripe, which is used for payment and functions like a regular credit card's stripe.

Citigroup said it will provide Sun with smart card services that will enable it to manage changes in application configuration on the cards.

Industry analysts called the program with Sun a baby step in the right direction towards mass smart card adoption.

"It's one of a number of tests that are going to continue," said Jerome Svigals, a smart card consultant in Redwood, Calif. "The bankers are embarrassed by American Express' Blue card. That's the catalyst for the banking industry to move forward" with the chips.

Theodore Iacobuzio, a senior analyst at TowerGroup in Needham, Mass., said using smart cards for secure access does not prove that banks have found a business case for implementing chips.

"There is value in providing these services, but the big moment is going to come when we see a financial services institution put payment on a chip," Mr. Iacobuzio said. "I'm sure Citi is getting good data on this, on usage and learning how to run a network. It's a worthy exercise, but it's not the silver bullet."

Citigroup, which recently won a contract to continue the GSA program, said it plans to announce additional corporate customers for its secure-access program this year.

Citigroup also announced Friday that it has joined MasterCard's Global Mobile Commerce Forum. The Forum, which has more than 200 members, was started last November as a platform for discussion between financial institutions, network operators, and mobile technology companies about creating global standards for mobile commerce. Forum members estimate that by 2001, 50 million consumers will own a commerce-capable wireless phone.

"Accelerating and facilitating the development of secure mobile commerce is a top priority for Citigroup," said Alan Young, vice president of e-Citi's access devices group. "Our goal is to empower customers with transactional capabilities anywhere, anytime, on any device - and we need one global open standard to do that."

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