New drive to introduce smart cards (From Western Telegraph)

New drive to introduce smart cards

Facing declining profits from traditional credit cards, financial institutions are once again pushing microchip-equipped credit cards.

But now they have new allies: Sun Microsystems and Compaq.

Financial companies have failed to popularise so-called smart cards, but the new effort is different in several ways, which could mean success this time.

With the backing of American Express and Visa International, in combination with three major card issuers, millions of the cards are expected to enter circulation this year.

With each card that is issued, Sun Microsystems makes a little bit of money as a royalty for its Java software, used to run the software on the tiny computer inside the card.

Also backing the smart-card push is Compaq, which announced that its home computers will come with smart-card readers, making the cards useful for purchases over the Web. Other PC makers are expected to follow suit

Eugene Lacey,of ZDNet UK said: "This is a welcome development. The smart card is a wonderful technology and now, with this buy-in from important hardware and software developers, holds out the promise of improved security on desktop PCs and secure portable data for mobile devices.

"Now all we need is similar buy-in from the financial institutions to enable us to replace the 'dumb' plastic in our wallets, with 21st century 'smart' plastic."