Smart Cards Spread

Industry expects u.s. government's worker identification deadline to increase sales

Smart-card technology vendors are betting that the passing of the U.S. governments latest worker identification deadline on Oct. 27 will help push their products further into the commercial sector and beyond.

The HSPD (Homeland Security Presidential Directive)-12 mandate requires that all federal agencies distribute certified PIV (Personal Identity Verification) smart cards to their employees.

The deadline has forced organizations, including the Department of Defense, to distribute millions of new smart cards to workers. Makers of related software and devices predict that millions more of the IDs will be put into the hands of workers outside the government sector.

First up will be government contractors and so-called first responders who interact with federal agencies and law enforcement officials who already carry smart cards, said Jason Hart, CEO of ActivIdentity, whose software was chosen to support the 3.5 million PIV cards being distributed by the DOD.

Beyond those workers, Hart said that security-oriented industries such as health care and financial services will soon begin handing out smart cards to users.

Since the devices can be used for everything from opening the door to a server room to encrypting data on a laptop computer, businesses may favor smart-card systems over other SSO (single sign-on) technologies that address only one type of application, Hart said.

Hart said that in Germany, where the government has distributed an estimated 80 million smart cards to citizens since adopting the devices as part of its national health care system in 1993, people are using the devices to register new bank accounts or certify online transactions as private companies have begun tapping into the reach of the cards.

Since the PIV IDs already hold all of a carriers personal details and have been verified by the government, the cards allow businesses to trust the data they provide and to use them in a variety of tasks, Hart said.

Officials at ActivIdentity, in Fremont, Calif., predict that between 50 million and 100 million smart cards will be put into the hands of U.S. citizens over the next 10 years, including those issued as drivers licenses through state and local governments.

ActivIdentity executives contend that smart cards could someday replace traditional credit and debit cards as accepted forms of payment, as businesses discover new ways to tap into the IDs.

The private-sector smart-card revolution might not happen overnight, said Tom Greco, vice president of enabling infrastructures for CyberTrust, a provider of smart-card software and consulting services in Herndon, Va.

However, Greco said the HSPD-12 deadline marks a milestone in the overall movement to adopt the tools. "There should be a natural evolution from that community of existing cardholders over the next several years as—when we get that level of good electronic credentials out there—things really start to get interesting in terms of pricing and applications that will help drive adoption among commercial businesses," he said.

Greco pointed out that smart cards can be used as a way to provide or revoke access to sensitive documents, which could help companies meet regulatory compliance requirements and ward off internal data leaks.

While businesses have only just begun to unify their network and physical security operations, smart cards can serve as a powerful vehicle for allowing authentication across disparate systems, Greco said.

One industry expert agreed that HSPD-12 and other guidelines—such as the Real ID Act, which was passed by Congress in 2005 and requires states to design new drivers licenses with more sophisticated authentication capabilities—will push smart cards into more U.S. citizens hands in the next several years.

"It may only be to a small degree over the next several years that we see things moving outside the government programs, but as more government workers get them and people get them as licenses, that could certainly encourage more commercial businesses to adopt smart cards," said Gregg Kreizman, an analyst with Gartner, in Stamford, Conn.