Charagma Watch (July 22, 2003)
An Annotated Update of
"Evaluation of the Church in the U.S.A." (1982, 1983)
by John and Sylvia Ronsvalle, empty tomb, inc., Champaign, IL

XXIX. RFID Readers: Read RFID Smart Cards and Cash

Posted: February 23, 2004

Once RFID readers are in place to read RFID tags in individual items that are being sold, the same reader will presumably be able to read RFID smart cards or their equivalents. Just as RFID chips are designed to tag electronically all purchased objects globally, RFID contactless smart cards serve the function of electronically tagging all purchasing human beings. RFID contactless smart cards may serve as an intermediate technological step before humans are widely implanted with RFID microchips. It is conceivable that human microchip implants could be marketed as being less likely to be stolen or lost than smart cards—thus offering the benefit of reducing identity theft and increasing security.

A. Abolish and Displace Cash: Replace with Identification Smart Cards

1. Harvey F. Wachsman: "Abolish Cash": Replace with Identification Cards: The New York Times,: December 29, 1990

The December 29, 1990 issue of The New York Times identified Harvey F. Wachsman as "a neurosurgeon and lawyer, [who] is president of the American Board of Professional Liability Attorneys. Wachsman wrote one article entitled "Abolish Cash" under the general heading, "Three Radical Proposals That Could Transform New York City, The Nation and, Maybe, the World."

If all the people who do business in cash were forced to report their incomes accurately — if the underground economy were forced to the surface — the Government could collect an additional $100 billion a year for the national treasury — without raising taxes. States and cities, many in serious financial trouble, would also benefit from collecting previously unpaid income and sales taxes.

How do we create a system to keep cash businesses honest? Eliminate cash. This may sound revolutionary, but the exchange of cash for electronic currency is already used in nearly all legitimate international business transactions...

Here's how it would work. The Government would change the color of the currency and require all old money to be exchanged at the Treasury.

Then, all the new currency would be returned by its owners to the bank of their choice...

We would offer a period of tax amnesty to encourage compliance, but as a practical matter compliance would be assured because after a certain date all currency would be worthless.

In place of the paper money, we would receive new cards — let's call them Americards — each biomechanically impregnated with the owner's hand and retina prints to insure virtually foolproof identification...

Fugitives would be easier to track down, legal judgments easier to enforce, illegal aliens simpler to spot, debtors unable to avoid their responsibilities by skipping town...

Some people might be concerned about possible abuses of civil liberties. But there would be a record of anyone who entered another's account — officials would be granted access only after electronic verification of their hand and retina prints. Civil and criminal penalties for theft of information would be devastatingly severe...

And besides, I'd like to ask every parent whose child walks to school through a gauntlet of drug dealers, everyone whose home has been robbed, whether they think that their rights are jeopardized by a system that could solve all these problems?...

Americard may seem like a drastic approach but its advent is inevitable. In the days of the telegraph and the pony express, who could have imagined that one day there would be a phone on every street corner in Manhattan?528

2. "Money: The Age of Cybercash": Newsweek: December 23, 1994/January 2, 1995

Newsweek in an article's subheading from a section entitled, "The Millennium," observed, "E-money will change our lives—once it becomes more than just e-payments."

The technologies that make the information revolution possible—cheaper and more powerful computers, software and wireless communications—will make electronic money possible, too. In the run-up to the new millennium, bet on e-money being the technology that transforms our lives.

In a sense it already has. We can now track balances and transfer money between accounts with our ATM cards and even buy stocks on our desktop PCs. But everyone from bankers to software makers is counting on doing much more...

But electronic commerce demands true e-money. What we have so far are ways of making payments electronically...

If the Internet is ever to become the cybermall some dream of, then someone will have to create e-money for your electronic wallet...

The consequences of global e-money will change your life. And not just because of the convenience. It will change the way we're governed...Your virtual wallet may soon be here, but so will the Virtual Fed to regulate it.529

3. "The Big Bank Theory and What It Says about the Future of Money": Time: April 27, 1998

Joshua Cooper Ramo's article in Time takes a look at the future of cash.

Cash is already headed for a whole new dimension. MasterCard, for example, has invested millions in the development of an E-cash system called Mondex. Smart Mondex cards have tiny embedded microchips that can store not only electronic dollars but also five other types of currency, an abbreviated medical history and even a personalized electronic "key" that can open everything from your apartment to your office. Says Henry Mundt, MasterCard executive vice president for global access: "The chip that we are putting on the card now will form the platform for the ultimate in remote access for consumers to their funds, anytime, anywhere. What we really see happening in the future is consumers being able to design their cards to meet their individual needs. We refer to that as moving more toward life-style cards." E-cash is already everywhere, from highway tolls to subways. Security? Privacy? The second is more troublesome than the first and presents a fearsome scenario for crime-busters and tax collectors alike.530

4. Visa "Goal of Displacing Cash": Use Smart Cards: CNET September 19, 2002

John G. Spooner, Staff Writer, CNET, noted Visa's "goal of displacing cash."

[Sue Gordon-Lathrop, Visa's vice president for emerging consumer environments, said...] "This latest effort and other compelling initiatives tied to chip and magnetic stripe technologies move us closer to our goal of displacing cash"...

Visa sees a wide range of potential uses for smart cards as Americans overcome their preference for cold cash; these include paying for parking, buying gas at a service station and getting a snack at a vending machine.531

B. Cash with Embedded RFID Tags

1. "Euro Bank Notes To Embed RFID Chips by 2005": EE Times: December 19, 2001

Some of the goals that have been associated with abolishing cash might be accomplished through embedding RFID chips within traditional cash.

The European Central Bank is working with technology partners on a hush-hush project to embed radio frequency identification tags into the very fibers of euro bank notes by 2005, EE Times has learned. Intended to foil counterfeiters, the project is developing as Europe prepares for a massive changeover to the euro, and would create an instant mass market for RFID chips, which have long sought profitable application.

The banking community and chip suppliers say the integration of an RFID antenna and chip on a bank note is technically possible, but no bank notes in the world today employ such a technology. Critics say it's unclear if the technology can be implemented at a cost that can justify the effort, and question whether it is robust enough to survive the rough-and-tumble life span of paper money.

A spokesman for the European Central Bank (ECB) in Frankfurt, Germany confirmed the existence of a project, but was careful not to comment on its technologies. At least two European semiconductor makers contacted by EE Times, Philips Semiconductors and Infineon Technologies, acknowledged their awareness of the ECB project but said they are under strict nondisclosure agreements...

In theory, an RFID tag's ability to read and write information to a bank note could make it very difficult, for example, for kidnappers to ask for "unmarked" bills. Further, a tag would give governments and law enforcement agencies a means to literally "follow the money" in illegal transactions.

"The RFID allows money to carry its own history," by recording information about where it has been, said Paul Saffo, director of Institute for the Future (Menlo Park, Calif.).532

2. European Central Bank and RFID Chips in Euro: EE Times: January 7, 2002

Charles J. Murray, writing in the EE Times, observes the work of the European Central Bank with RFID chips.

More recently, a group led by the European Central Bank began work on embedding RFID chips in the euro bank note...533

C. RFID Smart Cards

1. Smart Card Technology Improved to Hasten Broader Use: CNET April 23, 2002

CNET reported that, "Allies of "smart cards"...are improving the technology in hopes of hastening their broader use."

Smart cards offer advantages...but getting consumers and companies to switch to the new technology has been an uphill struggle...

SchlumbergerSema, a Schlumberger business unit that makes and sells smart cards, introduced ICitizen, a new smart card with features such as security and counterfeiting resistance. It also has large storage capacity for recording data such as fingerprints or other biometric data, driver's license numbers, health data and digital signatures, the company said...

The SchlumbergerSema card can also run programs written in Java Card, Sun Microsystems' version of Java software for smart cards...

Four banks--First USA, FleetBoston, Providian and Retailers National Bank--have issued more than 10 million Visa smart cards so far, Visa said...

MasterCard's smart card strategy supports the Java Card software as well as the Multos smart card operating system.534

2. Federal Aviation Administration (FAA) to Run Smart Card Trial Program: CNET May 28, 2002

CNET reported that the Federal Aviation Administration (FAA) plans to run a smart card trial program.

The Federal Aviation Administration will run a trial program this summer issuing smart cards to its employees and some contract workers...

The cards will initially be used as ID badges, but the FAA plans to add biometric data and eventually use the cards to control access to locations and computers, she said...

The FAA is part of the team working with the Transportation Security Administration on developing a standard for smart cards that could eventually be applied throughout the Department of Transportation.535

3. Smart Card Description: RFID Journal: October 29, 2002

An RFID Journal news article reports that, "Inside Contactless of Aix en Provence, France," which "wants to be a world leader in contactless smart cards," has "plans to introduce an RFID card that uses a 16-bit microprocessor and new encryption technology." The article provides a succinct description of smart cards.

[C]ontactless smart cards...use RFID technology to transfer data from a chip in the card to a point-of-sale terminal.536

4. Defense Department Plans for RFID in ID Cards: RF Design: August 1, 2002

The Defense Department planned to use RFID in identification cards.

In addition to wireless communication, the DoD is looking for technologies that secure assets. This includes the use of RFID in DoD military and civilian personnel ID cards. The DoD is looking to produce over 3 million of the high-tech IDs over the next few years.537

5. Contactless Smart Cards: "Visa Readies Wireless Smart Cards": Smart Cards Not Yet Popular in the United States: U.S. Government Agencies to Use Smart Cards: CNET September 19, 2002

John G. Spooner, Staff Writer, CNET, reported both on Visa's initiative with contactless RFID smart cards, and the plans by U.S. government agencies to use smart cards.

Visa International is making a push with a new smart-card payment system that would allow hands-free transactions.

The credit card company said Thursday that it plans to set up a new system that uses smart cards fitted with radio-frequency chips (sometimes called RF identification, or RFID, tags) that will allow people to conduct a transaction, such as paying a subway fare or buying a soda, without having to fish for change or swipe a credit card.

Visa, which will install the first such system in South Korea, says wireless smart cards have the potential to make life easier for a range of users...

"Visa's vision of universal commerce, or u-commerce, enables people to decide when, where and how to make a payment," Sue Gordon-Lathrop, Visa's vice president for emerging consumer environments, said in a statement.

But despite their popularity in Europe and Asia, smart cards have yet to catch on in the United States for consumer purchases. Several U.S. government agencies, including the Federal Aviation Administration, plan to use smart cards for identification and for access to buildings and computer networks.

6. "Smart Card Basics: What Is a Smart Card?": Gemplus: 2003

"In 2001, Gemplus was the world number one in smart card shipments according to Gartner-Dataquest. Based on Eurosmart estimates, Gemplus shipped 34% of the worldwide market."539 The Gemplus Website provides a "Smart Card Basics" section that includes a response to the question "What is a smart card?"

The smart card is one of the latest additions to the world of information technology. Similar in size to today's plastic payment card, the smart card has a microprocessor or memory chip embedded in it that, when coupled with a reader, has the processing power to serve many different applications...

Smart cards come in two varieties: memory and microprocessor. Memory cards simply store data and can be viewed as a small floppy disk with optional security. A microprocessor card, on the other hand, can add, delete and manipulate information in its memory on the card. Similar to a miniature computer, a microprocessor card has an input/output port operating system and hard disk with built-in security features.

Contact vs contactless

Smart cards have two different types of interfaces: contact and contactless. Contact smart cards are inserted into a smart card reader, making physical contact with the reader. However, contactless smart cards have an antenna embedded inside the card that enables communication with the reader without physical contact. A combi card combines the two features with a very high level of security.540

7. "Smart Card Basics: What Is the Potential for the Smart Card Business?": Gemplus: 2003

"The Gemplus Website provides a "Smart Card Basics" section that includes a response to the question "What is the potential for the smart card business?"

A survey completed by Card Technology Magazine indicated that the industry had shipped more than 1.5 billion smart cards worldwide by the end of 1999...A March 10, 2000 study by Dataquest predicts almost 28 million smart card shipments (microprocessor and memory) in the U.S. for 2000. According to this study, an annual growth rate of 60% is expected for U.S. smart card shipments between 1998 and 2003.541

8. "Smart Card Basics: Why Are Other Countries Ahead of the U.S. in Applying Smart Card Technology?": Gemplus: 2003

"The Gemplus Website provides a "Smart Card Basics" section that includes a response to the question "Why are other countries ahead of the U.S. in applying smart card technology?"

Card issuers in different countries are building their business case to justify the issuance of smart cards for different reasons. Here in the U.S., American Express launched the first wide-scale rollout of smart cards in 1999 with Blue from American Express, a credit card with a smart chip that offers extra security when shopping online. New markets, or markets that are evolving for other reasons, will further help make smart cards widespread in North America.542

9. Smart Cards: "Gateway to A Cashless World": CASPIAN

CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering) notes that "Smart Card News" provides information about "Smart Cards." CASPIAN also states that "Smart Cards" are "the gateway to a cashless world."

..."Smart Cards..." [are] the gateway to a cashless world where chip-encoded ID numbers will be required to buy food (and everything else).543

10. Smart Card Alliance: "Who Is the Smart Card Alliance?"

The Smart Card Alliance Website answers the question "Who Is the Smart Card Alliance?"

The Smart Card Alliance is a not-for profit, multi-industry association of over 185 member firms working to accelerate the widespread acceptance of multiple application smart card technology. Our membership includes leading companies in the banking, financial services, computer, telecommunications, technology, healthcare, retail, and entertainment industries, as well as a number of government agencies. The convergence of these major industry players is unprecedented and represents a shared vision and commitment to providing an interoperable platform for the delivery of a new generation of products and services based on smart card technology.

The Alliance was created when the industry's key organizations, the Smart Card Industry Association and the Smart Card Forum, joined forces in early 2001. The newly combined membership brings together leading users and technologists from both the public and private sectors. Membership is open to anyone focusing resources and energy on the utilization of smart card technology.544

11. Smart Card Alliance: "Mission"

The Smart Card Alliance Website presents Its "Mission."

To stimulate the understanding, adoption, use and widespread acceptance of single and multi-application smart card technology through specific projects such as educational programs, market research, advocacy, industry relations and by bringing together, in an open forum, leading users and technologists from both the public and private sectors.545

12. Smart Card Alliance: "Current Members"

The Smart Card Alliance Website presents the Smart Card Alliance's "Current Members." Following is a partial listing of Current Members' Leadership Council Members, General Members, Government Members, and a complete listing of both University Members. The Current Members Web page lists the category of "Associate Members," but no entities were listed under this category.

a. Leadership Council Members

Following is a partial listing of the 20 Leadership Council Members.

Bank of America, Datacard Group, Gemplus, Hitachi America Ltd., IBM, Infineon Technologies, MasterCard International, Northrop Grumman Information Technology, Philips Semiconductors, SCM Microsystems, Smart Card Alliance, The Boeing Company, Unisys Corporation, and Visa USA.

b. General Members

Following is a partial listing of the 50 General Members.

American Bankers Association, Citicorp Electronics Financial Services, Inc., Discover Financial, and Zebra Tech Corp.

c. Government Members

Following is a partial listing of the 24 Government Members.

Bureau of Public Debt, Defense Manpower Data Center, DISA, Disbursing & Cash Management Activity, Federal Aviation Administration, General Services Administration, NASA, Navy e-Business Operations Office, OCC, Transportation Security Administration, U.S. Customs, U.S. Department of State, U.S. Dept. of Transportation Volpe Center, and U.S. Treasury FMS.

d. University Members

Following is a listing of both University Members.

Cornell University and University of Illinois.546

13. "RFID Smart Cards Gain Ground": RFID Journal: April 9, 2003

An RFID Journal news article reports on the increasing "adoption of contactless smart cards."

Convenience, control, speed and ease of use are driving adoption of RFID smart cards...

The Hong Kong Octopus Card is a prime example of a successful RFID-enabled deployment. More than 95 percent of the Hong Kong population uses the card, which [...] uses Sony's 13.56 MHz FeliCa RFID chip. The card is accepted by more than 100 transportation service providers and 160 retailers, including 7-Eleven, Starbucks, and Park & Shop. It can also be used at pay phones, photo booths, and parking garages.547

14. Smart Card Chips in Consumer Electronic Devices: "Making RFID Payments Ubiquitous": RFID Journal: June 2, 2003

Lynn DeRocco reported in an RFID Journal news article reported that efforts are underway to embed RFID "smart card chips in a wide variety of consumer electronics products." A summary of the article states, "Philips and Visa want people to be able to pay for goods and services anywhere by using RFID chips embedded in phones and other devices."

The folks at Visa International would like you to use your Visa credit or debit card to pay for everything, no matter where you are. Their counterparts at Royal Philips Electronics would like to sell millions of RFID chips used in smart cards. So the two companies have teamed up to try to make wireless payments as common as pocket change...

Philips has been pursuing a goal of embedding its smart card chips in a wide variety of consumer electronics products...

The general concept behind the Philips-Visa alliance is that you might use an RFID tag in a handheld device to authenticate yourself to an online music site, so you could download your favorite tunes. Or you might wave a chip embedded in your mobile phone near a reader on a bus to pay the transit fare. In both cases, the payment would be charged to your Visa card or deducted from your account through a Visa debit card.

...No more looking for an ATM card or digging a credit card out of your wallet. Just whip out your phone or PDA, wave it by the reader and you've paid. The technology to make this possible already exists. Philips and Visa will work with third parties to create specific applications and devices to employ contactless technology.

Reinhard Kalla, VP and general manager of identification at Philips Semiconductors, sees contactless Visa payments using Philips technology as a big opportunity for both companies...

"Philips has been working for years in RFID with tags and labels, and contactless applications are also based on RFID," Kalla says, "You would use this technology as if it were a smart card." He adds that consumers will see "new and more exciting applications and content" resulting from the relationship with Visa in about a year.548

15. "RFID Payment Systems Take Off": RFID Journal: June 9, 2003

Lynn DeRocco of the RFID Journal reported in a summary statement that, "A new report says the use of contactless smart cards and other RFID payment systems will continue to rise."

Within five years, RFID payment systems will be as common as credit card payments in fast food restaurants, video stores, movie theaters and other outlets that do a lot of low-value transactions. That's the conclusion of a new study by Celent, an IT research and consulting firm to the financial services industry.

The report, titled "Contactless Payments: Replacing Cash with Convenience: The Case for RFID," was written by Ariana-Michele Moore, a senior analyst at Celent. She interviewed merchants, consumers, and such companies as Texas Instruments, MasterCard, and Bank of America. The study indicates that there are enough benefits for consumers, merchants and banks to overcome obstacles to adoption, which include consumer concerns about security and investments in new equipment that merchants would have to make.

528Harvey F. Wachsman, "Abolish Cash," New York Times, 29 December 1990, p. 23.
529"Money: The Age of Cybercash," Newsweek, December 23, 1994/January 2, 1995, p. 128.
530Joshua Cooper Ramo, "The Big Bank Theory and What It Says about the Future of Money," Newsweek, April 27, 1998, p. 48.
531John G. Spooner, Staff Writer; "Visa Readies Wireless Smart Cards;" CNET; published September 19, 2002 10:05 AM PT;; p. 1 of 2/18/03 10:08 AM printout.
532Junko Yoshida; "Euro Bank Notes To Embed RFID Chips by 2005;" EE Times; published December 19, 2001 (3:03 p.m. EST);; pp. 1-2 of 2/11/03 4:26 PM printout.
533Charles J. Murray; "Injectable Chip Opens Door To 'Human Bar Code';" EE Times; published January 7, 2002 12:38 p.m. EST;; p. 3 of 3/9/02 3:30 PM printout.
534Stephen Shankland; "How 'Smart' Is Your ID Card?;" CNET; published April 23, 2002 4:40 PM PT;; pp. 1-2 of 3/12/03 1:54 PM printout.
535Margaret Kane; "FAA Takes First Swipe at Smart Cards;" CNET; published May 28, 2002 11:00 AM PT;; p. 1 of 3/12/03 2:00 PM printout.
536"Inside's Next-Gen Smart Card;" RFID Journal; published October 29, 2002;; p. 1 of 2/18/03 10:07 AM printout.
537Roger Lesser, Editor; "DoD Looking to High-Tech to Fight the War;" RF Design, Primedia Business Magazines & Media Inc.; published August 1, 2002;; pp. 1-2 of 4/3/03 8:02 AM printout.
538John G. Spooner, Staff Writer; "Visa Readies Wireless Smart Cards" CNET; published September 19, 2002 10:05 AM PT;; p. 1 of 2/18/03 10:08 AM printout.
539"About Gemplus;" Gemplus; published 2003;; p. 1 of 4/1/03 9:02 AM printout.
540"Smart Card Basics: What Is a Smart Card?;" Gemplus; published 2003; ; p. 1 of 3/26/03 3:32 PM printout.
541"Smart Card Basics: What Is the Potential for the Smart Card Business?;" Gemplus; published 2003;; p. 1 of 3/26/03 3:33 PM printout.
542"Smart Card Basics: Why Are Other Countries Ahead of the U.S. in Applying Smart Card Technology?;" Gemplus; published 2003;; p. 1 of 3/26/03 3:34 PM printout.
543"Food Industry News: 'Smart Card' News;" CASPIAN; copyright 1999-2003;; p. 8 of 3/20/03 3:53 PM printout.
544"Who We Are;" Smart Card Alliance; published n.d.;; p. 1 of 3/26/03 9:05 AM printout.
545"Mission;" Smart Card Alliance; published n.d.;; p. 1 of 3/26/03 9:05 AM printout.
546"Current Members;" Smart Card Alliance; published n.d.; - 5; p. 1 of 3/26/03 9:12 AM printout.
547"RFID Smart Cards Gain Ground;" RFID Journal; published April 9, 2003;; p. 1 of 4/9/03 4:35 PM printout.
548Lynn DeRocco; "Making RFID Payments Ubiquitous;" RFID Journal; published June 2, 2003;; pp. 1-2 of 6/2/03 9:28 AM printout.
549Lynn DeRocco; "RFID Payment Systems Take Off;" RFID Journal; published June 9, 2003;; p. 1 of 6/10/03 9:18 AM printout.

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