The State Of Smart Cards In America
Smart cards are big everywhere but here in the United States. Cards & More President Peter Lippold moved from Germany to the States to capitalize on what he sees as a huge potential market.
VAR Peter Lippold, president of Cards & More, based near Duesseldorf, Germany has had 14 successful years in the smart card business. Last year, he moved to San Francisco to establish an office. Like many players in the smart card industry, Lippold senses something big is about to happen. By opening a U.S.-based office, he knows he'll be more than ready when the technology takes off. Lippold says his American sales are already strong. Currently, Cards & More consists of 11 employees and $3 million in sales. Lippold expects sales to jump to $4 million or $5 million by the end of this year.
"The biggest business decision I have made is to open an office in California," Lippold says. "I saw a diagram of the worldwide smart card business about 1 ½ years ago, and only .5% of the market was in the United States. It was obvious to me that the smart card market in America was full of potential."
Lippold has the sense to see the potential of the smart card market in the United States. He isn't alone. In fact, companies he calls "the big boys" (Gemplus, Schlumberger, and Giesecke Devrient) have strong U.S. offices and are ready to strike when the market takes off. Besides size, one thing separates Cards & More from the leaders of the pack. Lippold isn't interested in the average smart card end user. Cards & More thrives by providing solutions for hard-to-solve problems - not mass production.
"I've found that, if an end user is asking for weird applications, we are the people to talk to," Lippold says candidly. "If end users have a crazy idea for a card, we are able to provide what they are looking for 99% of the time." Take a closer look at the full-page picture adjacent to the first page of this article. Lippold is not held to producing your average credit card-sized smart cards. One particular example is the long, rectangular-shaped gold card, created for Formula One auto racing. Lippold works exclusively with Eltron printers from Zebra Technologies (Vernon Hills, IL) and reformats the printing size and shape of the cards, according to the end user's need.
"The Formula One group has a very creative design team," Lippold explains. "They often create cards that are very challenging to print. This forces us to complete several printing tests before we can reach the quality and specifications the customer is looking for in the card. On one card, we even included a lenticular area, which is an image that changes when tilted, to show up to 10 different images. The crazier the cards are, the more Formula One racing fans want them."
Is Contactless The Way To Go?
Odd card shapes don't affect the usage or reliability of the cards, thanks to contactless smart cards (also called prox cards). These special cards have an embedded antenna coil, as well as an embedded microchip. The internal antenna allows for communication and power. A receiving antenna at the transaction point transfers information. Close proximity is required for transactions, but direct line-of-sight is not required. Since contactless cards are not inserted in a reader to be functional, transaction time can be decreased. This increases convenience and allows for more creativity in design.
Since Formula One races are held around the world, a flexible access control system is needed. Cards & More developed a mobile form of access control using contactless smart cards. Transponders are located in turnstiles, which are easy to set up and tear down, yet provide the access control needed at the races. "It's a hard job to provide access control to an event that travels around the world," says Lippold. "When Formula One races in Indianapolis next year, all of the equipment will be shipped in advance and set up for the week. Then the equipment will be torn down and sent to the next race.
"Americans may be smarter by waiting to adopt smart card technology," Lippold says. "They see what mistakes are being made in the rest of the world with smart card technology, they learn from the mistakes, and they only take the best parts of the system."
Contactless smart cards are also good candidates for installations in university settings. The smart chip in one card can contain a student's picture and an electronic purse that can be used in the cafeteria, in photocopy machines, and as a library card. Since the card does not need line of sight, it can also be used as a convenient access control card to classrooms and dormitories. To achieve seamless integration, multiple technologies might need to be integrated on one card. This way, for example, a building that functions on magnetic stripe cards for access control will still have adequate security.
Smart Cards = Smart Money
Okay, so smart cards have the potential to be a big industry here in the States. Where's the money for VARs and integrators in the industry?
"With smaller companies," says Peter Alpmann, Cards & More's managing director in charge of sales and marketing in the rest of the world, "the rule is, the more complex the environment, the more money can be made. Run-of-the-mill phone cards don't make much money, unless they are sold in large volumes. However, a university card that can combine multiple technologies, such as smart chips, magnetic stripes, and bar codes, can be profitable. The university eliminates the need for multiple cards on campus, so it is willing to pay a bit more for the card.
"Return on investment (ROI) occurs by eliminating the need to have employees dedicated to printing several types of cards," Alpmann continues. "The trick for VARs and integrators is to find a situation where they can provide a viable solution to a problem, yet provide a quick ROI for the end users and for themselves."
Smart cards can also be used in point of sale (POS) systems as part of customer loyalty programs (see a related article by clicking here) or in healthcare facilities to track patients and employees. Places where data needs to be mobile and convenient are potential installations.
The lesson for smaller VARs: use your imagination. You don't have to be limited by smart card sizes or card technologies. Contactless smart cards can allow for creatively shaped cards, and multiple technologies can be combined to meet almost any end user's needs.
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