VeriFone links smart cards, SET

VeriFone today announced that its vWallet software is being used in France to perform debit transactions under the Secure Electronic Transaction (SET) protocol using smart cards.

VeriFone, which is working with giant French smart-card manufacturer GemPlus, said using smart cards adds another level of security for SET card transactions over the Internet. Initially, the French project uses PCs as the consumer device.

"We're trying to show that smart cards are creeping into Internet commerce," said George Hoyem, vice president/general manager of VeriFone's Internet commerce unit.

VeriFone, which is the dominant global leader in credit-card readers used in stores, is pushing smart cards, similar to credit cards but with an embedded chip, on several fronts. The company was acquired last year by computer powerhouse Hewlett-Packard (HWP).

In France, all credit cards carry a chip, which makes them more versatile because they can be loaded with electronic cash or with other nonfinancial applications. Europeans often use smart cards and e-cash for phone calls or small purchases, but home PCs must be equipped with smart-card readers in order to use VeriFone's software.

The French project, called E-Comm, is being rolled out now, VeriFone said, but is due to launch full-scale in June.

In late 1996, VeriFone announced it would market a Personal ATM, a device that will allow consumers to download e-cash onto a smart card from their home, then spend it online. Priced under $100, the PATM would be marketed to banks to resell or lease to their customers.

"We believe smart-card readers will show up in all kinds of consumer appliances," said Hoyem, who disclosed that VeriFone is working with Microsoft subsidiary WebTV to adapt existing smart-card readers in the TV set-top device so they can be used to make payments over the Net.

Smart-card readers, which are required to use the plastic cards, also are expected to show up in consumer devices such as smart phones, cellular phones, and handheld computing devices.

Under the SET protocol for Internet card payments, consumers must have both a software wallet, such as VeriFone's vWallet, and a digital certificate, an electronic ID card to vouch for the user's identity. Hoyem said the next step will be to put the digital ID onto the smart card too.

However, because of the practical difficulties of distributing smart-card readers widely, Hoyem predicted that financial institutions will host wallet software on their servers, where consumers could access them to make online purchases. That unannounced initiative will be underway within 12 months, Hoyem said.