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Device turns home PC into ATM for electronic cash

[ Article crossposted from clari.biz.industry.banking]
[ Author was Reuter / Eric Auchard ]
[ Posted on Mon, 17 Feb 1997 11:51:29 PST ]

  	  				 
	 NEW YORK (Reuter) - Computer, give me $20.  
	 Such a demand enters the realm of possibility with the  
introduction Monday of a device that turns a personal computer 
into an automated-teller machine capable of dispensing 
card-based electronic cash, marking a new step in PC-based 
home banking. 
	 Fischer International Systems Corp. said its $60 device  
can be inserted into the floppy disk drive of any PC, enabling 
it to read ``smart cards,'' a new type of plastic credit-card 
that can perform electronic cash transactions and store bank 
account balances. 
	 Already gaining popularity in Europe to pay for store  
purchases and streetside telephone calls, the ``smart card'' is 
beginning to take hold in the United States as a replacement 
for cash used in ordinary purchases like grocery shopping. 
	 By enabling PCs to securely dispense money, the device may  
provide a major stimulus to home banking by empowering 
consumers to perform financial transactions that now require a 
visit to a bank branch or an automated teller machine. 
	 ``What's been missing is a low-cost, easy-to-use 'bridge'  
between smart cards and personal computers,'' Fischer President 
Michael Battaglia said. 
	 Smarty, as the product is known, is a slim piece of  
hardware that inserts into a personal computer's 3.5-inch 
floppy disk reader, allowing the machine to link via the 
Internet to banks or retail outlets. 
	 Fischer holds key patents for smart card readers inserted  
into 3.5 inch floppy drives -- making Smarty the most readily 
adaptable card reader for the 200 million personal computers 
now in use, company officials said. 
	 The device, which can be inserted into home or office  
personal computers or into a laptop computer when travelling, 
will enable consumers to make wider use of banking cards for 
purchases, replacing the need to carry loose bills and coins. 
	 The product could be a boon to PC-based home banking,  
permitting full-scale transactions instead of the more limited 
functions now available, like electronic balancing of 
checkbooks, financial investment tracking or tax return 
filing. 
	 Fischer officials said they were working with several  
major U.S. and European financial services firms to spur use 
of the devices in a variety of business and consumer 
applications, including home banking over the Internet. 
	 In addition, Art Burton, Fischer's vice president of sales  
and marketing said the company was in talks with top providers 
of home banking software like Intuit Inc. and Microsoft Corp. 
to link Smarty to their software. 
	 ``We have had some discussions at various stages with the  
primary providers of home banking software,'' Burton said. ``We 
are also working with individual banks.'' 
	 Burton said the PC-based Smarty product will be offered  
later this year to consumers participating in a trial of smart 
card technology in New York City borough by a group led by 
MasterCard, Cititbank and Chase Manhattan Bank. 
	 In addition, Fischer said it has received initial Smarty  
orders from the Bank of America and Wells Fargo Bank, for 
pilot testing by bank employees. 
	 Orders for demonstration models have also come from the  
U.S.-based credit card consortium Visa, U.K.-based Mondex 
International and Sweden's Telia Group. 
	 Smart cards contain an embedded microchip capable of  
storing more than 4 million bytes of computer data, or dozens 
of pages of information -- far more than existing 
magnetic-strip credit cards that hold just 40 characters or 
so. 
	 The new financial data format can act as a one-stop  
shopping card storing electronic cash, a collection of credit 
cards, and other personal information including several forms 
of identification to prevent fraud. 
	 While slow to catch on in the United States, smart cards  
have grown popular in Europe and Asia. 
	 Fischer, with annual revenues of about $20 million, is  
solely owned by Addison Fischer, its chairman and a former 
professor at the Massachusetts Institute of Technology. 
	 Addison Fischer is considered one of the world's leading  
experts on computer security. He was one of the founders and 
principal owners of RSA Data Security Inc., developers of a 
popular computer security encryption technique. 
	 Fischer faces many larger competitors in the smart card  
reader market, including France's Gemplus, U.S.-based 
Schlumberger Ltd. and VeriFone Inc., Germany' Siemens AG and 
Philips Electronics NV of the Netherlands. But these rival 
machines take the form of bulky computer attachments or 
standalone-terminals priced between $80 and $300. 
  	   	

--
Surendar Chandra (surendar@tamil.cs.duke.edu )
Home Page for Surendar