Microsoft program links Windows with smart cards

Microsoft is to release an operating system-like program which can be held on a single chip on a plastic card, allowing smart cards to interact with all Windows-based computers. The announcement, made this week in Paris, is expected to spur the development of the smart card industry.

Called Smart Cards for Windows, the system will sit on top of the basic operational program residing on a microprocessor on a card. It could either run tiny software applications called applets on the chip itself, or interact with full-sized software applications sitting on a computer.

"We want it to become easy to integrate smart cards into an end-to-end Windows platform," said Mr Craig Mundie, senior vice-president of the Consumer Platforms division at Microsoft.

Smart cards - plastic cards which contain a microchip that can hold data or small programs - are expected to be a $6.8 billion (£4.5 billion) industry by 2002. But to date, interest has been lukewarm, particularly in the United States, which has instead preferred to use swipe cards (cards with a magnetic strip that carries information).

In contrast, Europe represents 80 per cent of the global smart card market and has found numerous uses for the cards, phonecards being the most common.

But smart cards have capabilities far beyond those of swipe cards. Because they can execute programs themselves, they could house credit card account details and run an electronic commerce program if a cardholder wished to make a purchase over the Internet.

The cards can be "charged" with cash from specialised ATMs and then can manage that cash as it is spent electronically in shops or online. The cards could also carry identification programs, hold passwords to Internet accounts, or store medical information like Xrays and prescription details.

Smart card manufacturers such as Schlumberger Electronic Transactions and Gemplus welcomed the announcement, which they clearly hope will prompt interest in the cards. "We think this is a major step toward bringing smart cards into mainstream technology," said Gemplus chairman Mr Marc Lessus.

The announcement is also seen as a direct stab at Microsoft rival Sun Microsystem's Java platform. Microsoft, whose Windows operating system runs on 90 per cent of computers in the world, sees Java as a serious threat because software designed with Java can run on any operating system, thus making a platform like Windows irrelevant. Java runs small applets and for this reason it has been viewed as an ideal smart card partner.

Microsoft says that its smart card system will utilise inexpensive, low-end microprocessors which market for $2 to $5. In contrast, says the company, Java requires high-end chips which cost $12 to $20.