CyberMark closes as chip cards gain ground in US
It is ironic that CyberMark has closed its doors just as smart card technology is beginning to actually find a home in the US. In the late 1990s, CyberMark was heralded as evidence that smart card technology, so successful in Europe and other parts of the world, could prove their worth domestically. In 1997, two CyberMark execs were named by Card Technology magazine as the industry’s men of the year. And, the education market routinely topped the list of hot spots for smart card technology. Last week, CyberMark shut its doors for good leaving its estimated twenty-five remaining smart card customers to go it alone.
When looked at in the higher education context only, one could easily point to the company’s demise as a sign of the technology’s failure. But around the world the technology has long been accepted, and now even in the US, numerous large-scale smart card projects are underway.
- The Department of Defense has issued nearly 2 million chip cards to personnel across branches of the military. This project will soon include more than 4 million active duty personnel, civilian spouses, and outside contractors.
- The Department of Transportation is well underway with its plan for a Transportation Worker Identification Card to be issued to the workers in the shipping, public transit, airline, and related industries.
- The Department of State is issuing smart cards to its employees for access control to buildings and networks.
- The federal government and groups such as the American Association of Motor Vehicle Administrators are evaluating smart cards as a potential addition to all state drivers licenses. Two Virginia Congressmen, Jim Moran (D) and Tom Davis (R), sponsored a bill in the House of Representatives (HR-4633) to mandate smart card-based drivers licenses nationwide.
- American Express, MasterCard, and Visa are issuing smart cards to account holders to the tune of 7- 10 million per year since 2000.
- Retailing giant, Target, has issued more than 4 million chip cards that function for Visa credit and in-store loyalty cards.
So why have all of the major providers of smart cards in higher education fallen short while the technology seems to be gaining momentum in other areas? Why has the once-heralded education market suffered the latest–and hardest–in a series of blows? If you examine the majority of the new programs arising in the US, most have a common thread–secure authentication of the individual.
World events such as the September 11attacks, increased recognition of network hacking and resulting financial losses, and growing losses from identity theft have brought to the forefront the need for better authentication tools and processes.
A photo ID, a password, a barcode, and a magnetic stripe card have been determined by many issuing authorities to be too susceptible to fraud. That has led to the increased attention on more advanced identification tools such as smart cards and biometric indicators. But these advancements carry with them an advanced cost. When dealing with our national security and the lives of citizens, an increased cost is easily justified particularly given current national sentiment.
On a campus, however, can the increased costs for these technologies be justified for the student ID card? The chip component of the smart cards that were issued in the education market served primarily as a stored value device. The promise of network security and other authentication services did not materialize quickly enough. In the end the question became, “Can I justify the added cost for a smart card that does little more than stored value?” In most cases to date, campuses determined that they could not. (It should be noted that the exception to this may be found in the new niche market chip card offerings such as Debitek’s MoneyClip™ product because the cost of the card is far lower than those offered by smart card providers in the past).
So are smart cards a thing of the past on college and university campuses? Not likely. Just as the new push for secure authentication and identity verification is occurring at the national level, this need is trickling down.
Corporate America is migrating to advanced technologies, including chip cards, to secure facilities and networks. One day in the not too distant future, campuses will require these protections to an extent great enough to warrant the cost of the additional technology. We simply are not there yet. What has been proven by pioneering smart card efforts is that stored value alone is not enough–it is an important part of the equation but a more fundamental driving force is needed.
If these government agencies and technologists are right, we may have found the killer application in secure authentication. It just may not yet be a real enough threat to those of us in higher education. Yet.