Smart Card Alliance members make real progress toward a more secure world
08 May, 2006
category: Contactless, Education, Financial, Library
By Andy Williams, Contributing Editor, AVISIAN Publications
The Smart Card Alliance has seen some good days and some really bad ones. Following 9-11 and the mini-recession that terrorist attack caused, the Alliance’s lost nearly one-half its membership – falling from 160 to 86 organizations. Now, it has made its way back to nearly pre 9-11 membership numbers and, if 2005 is any indication, even better days are ahead for the alliance.
Smart card industry veteran Randy Vanderhoof, who joined the alliance as its executive director in 2002 two years after its creation following a merger between the Smart Card Forum and the Smart Card Industry Association (SCIA), said membership is currently hovering at around 152.
The merger of the two organizations became somewhat of a necessity, explained Mr. Vanderhoof, after SCIA and the Smart Card Forum began pulling back as a result of a downturn in the economy and the markets served. “It was a combination of mergers in the industry as well as the fact that the Smart Card Forum membership was heavily based in the financial market that was experimenting with stored value and electronic purses on smart cards. That market never materialized and a lot of members associated with the banking industry left the smart card industry,” he added. “What’s evolved has been an emergence of a strong market for smart cards in security which filled the gap when payments were being de-emphasized in the U.S. Now we’re seeing a resurgence in the payment industry as well.”
Organizing based on vertical industry segments
Last year, recognizing that the smart card industry “was growing rapidly in a number of disparate vertical markets, which had unique technologies and requirements,” the alliance created industry-focused councils within the organization “to better focus on, and address the needs of those vertical markets,” said Mr. Vanderhoof.
That led to the formation of the Contactless Payments Industry Council and similarly-organized councils representing transportation, healthcare, physical access and the newest, identity. The councils operate as semi-autonomous business units with a governing committee and their own mission statement.
An example of the type of programs the councils produce is the Contactless Payments Council’s free webinar held in conjunction with the retailer-oriented Stores magazine in February. The intent was to give prospective merchants and financial issuers and processors a layman’s view of contactless payments. To say the webinar was a success would be an understatement.
“We were expecting about 75 to sign up,” said Mr. Vanderhoof. Instead more than 600 people signed up, with 315 participating online when it was first held and another 100 who later listened to the post-recording. “It was by far the most we ever had sign up for a webinar,” said Mr. Vanderhoof. “We developed that program to target the merchants and financial institutions who have yet to get on board with implementing smart cards. We wanted to drive an awareness of the benefits of contactless payments.”
“The councils have elected their own steering committees; they decide what projects or deliverables they wish to work on; they’ve created their own budget and funding. All members of the Smart Card Alliance are welcome to participate in one or more of the industry councils, but some councils have established separate membership rules.” he said. That allows organizations, such as end user groups, to participate within one of the councils without actually having to become a full member of SCA.
“We have enabled SCA members to make recommendations to the board to form industry councils on their own. So each of these five councils that have been created were started through the initiative of several member organizations who felt there was a need to put more effort into addressing the smart card adoption issues relating to that vertical market,” added the SCA executive.
“We were concerned the market was growing bigger than we had the ability to address because of the number of different directions the technology was taking,” he added. “In order to be responsive to the needs of the North American market, we felt we needed to provide additional attention in some of these areas, where they had either unique requirements or unique issues that needed to be addressed.”
North American roots but worldwide reach
While the SCA is based in North America (Princeton Junction, NJ), “We don’t limit our membership to North American companies,” said Mr. Vanderhoof. “We have a large number of European and Asian companies which are members who see specific opportunities to service the North American market. In addition, last year, we formed the Latin America chapter as a subgroup within the SCA to address the needs that are unique to Latin America.” The alliance, in fact, opened a support office in Miami, Florida last summer.
SCA received a $288,000 matching grant from the U.S. Department of Commerce in 2004 as part of its Market Development Cooperator Program (MDCP) to foster trade between the U.S. and Latin America, said Mr. Vanderhoof. The Latin America chapter is the initial result of that grant.
“We saw there was a need for a similar education and information exchange for emerging Latin American countries that were not being serviced by any smart card industry association,” he added. The chapter currently has 10 members.
Quality white papers educate wide audiences
Yet, even with the webinars, outreach efforts, its trade councils and annual conferences, the alliance’s biggest benefit to its members and to the smart card industry as a whole has been in the amount of information the alliance produces in the form of its white papers.
“They have been the most effective way of communicating the value of smart cards because they are available to a wide audience. People appreciate the concise nature of the reports and see the quality of the material as helping them understand the market and allowing them to address their needs with particular industry providers,” said Mr. Vanderhoof.
“We provide shared services to all council groups, which means we provide the support for their white papers, seminars, and conferences and we provide a means for them to meet over conference lines to discuss their projects and to develop their deliverables and then to post the results of their activities on each council’s web pages so people can learn from their work.” At one point, the alliance charged nonmembers for the reports, but they’re now available as a free download from the alliance’s web site, smartcardalliance.org.
There seems to be no slowing down in the number of white papers the alliance is issuing either. In just the past couple of months, three white papers were produced dealing with smart cards in the healthcare industry, the top 10 “Hot Identity Topics,” and one dealing with smart cards and parking.
“The Physical Access Council is continuing to focus on the government market and helping agencies define the FIPS 201-related issues. The council has published two reports and has prepared a Power Point presentation that has been shared with federal agencies and NIST to address the needs of FIPS 201,” said Mr. Vanderhoof.
The alliance has also “done a lot of work to differentiate between secure forms of RF technology, such as what is being used in passports, ID cards, and payment cards from other forms of RFID technology,” he said.
A voice for accurate technology information
While the alliance white papers serve as a good information source for the industry, just as important, said Mr. Vanderhoof, is countering the misinformation floating around about smart cards.
“We’ve been very active,” he said. “We’ve published several reports, including FAQs (frequently asked questions) that set the record straight between the use of contactless and RFID. We’ve spoken at numerous industry events, such as privacy and travel conferences, information security and access security events and conferences dealing with border security and access control. And we continue to attempt to promote qualified speakers from the smart card industry who can define the differences between appropriate electronic ID and security applications from those that might be endangering personal privacy or individual security.”
Mr. Vanderhoof sees the No. 1 issue facing the smart card industry today is global interoperability and the need for smart card technology to be integrated into the hardware and software platforms that will allow these platforms to reap the benefits of smart cards for fast, secure, and portable execution of transactions.
“There is still a great deal of work ahead to integrate the standards that exist at the smart card level with the terminals and readers and back end systems that are in place to be able to use the smart card to authenticate individuals or execute secure financial transactions,” he said. “The industry has made great strides in this direction both at the individual market level as well as at the national and international standards level, but there is still a great deal of work to be done.”
And interoperable cards in the transportation arena as well as in the ID and information security markets are still a ways off. “There’s still a lot of work that needs to be done just to simplify the use of smart cards to replace user names and passwords,” he added.
Sure there is much still to be done. But the efforts of the Alliance leadership, its councils, and members at large, are making the benefits of a smart card-secured future a reality today.
Membership information
The alliance has several dues structures: One for the Leadership Council ($10,000 a year) which is the alliance’s voting class and from which the board of directors are chosen; and one called “General” which is $4,000 a year for commercial organizations and $1,500 for government organizations. It also has a $1,000 Associate Level for consultants and independent contractors. To find out more about membership in the Smart Card Alliance, visit www.smartcardalliance.org.
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