Big Brother in your pocket

You can tell a lot about someone from their smart card - maybe too much, say civil rights supporters.

It's another Monday morning and you're late. After an hour in city traffic, you arrive at work and turn into the company car park. Producing a plastic card from your pocket, you wave it at a sensor near the gates. They open and you enter.

Using the same card, you enter the building via a security entrance. On the way to the lifts, you pause at the canteen to buy coffee and a doughnut. You pay for your purchases by inserting the card in a reader at the register.

At lunchtime, you have a doctor's appointment. You insert your card into one of the office's mobile handsets so it can function as your office phone while you're away. At the surgery, you hand the doctor another plastic card. He puts it into a desktop PC and your health records appear on the screen. Notes on new medication are entered before the card is returned to you.

On your way home, you stop for the evening paper. Your card is swiped by the newsagent, who deducts 30p. Visits to the petrol station and video store are handled in a similar way.

This sequence of events is not as far off as it might seem. In fact, the technology needed to allow all such transactions already exists - it's only a matter of time before it becomes commonplace.

At the core of such systems are "smart cards" - credit card-sized pieces of plastic containing a silicon chip. Already more than 600 million cards are in use around the world and this number is expected to grow to 3 billion by 2000. The ability of smart cards to store, manipulate, update and share large amounts of information makes them hugely versatile. Essentially, they pack the power of a computer into a card.

Current uses include mobile telephones, where user details can be transferred between handsets, decoders for satellite television broadcasts, security and identification systems, and electronic cash. Some of the new loyalty schemes, such as the one run by Shell service stations, use smart cards to keep track of points earned. These points are held in the card and are automatically downloaded to a customer's account when they reach a pre-set level.

Motorola, which manufactures the silicon chips at the heart of smart cards, predicts the main areas of growth will continue to be in finance and in government-initiated schemes. "The capabilities of smart cards are increasing all the time," says Motorola smart card division communications manager Kathleen Reid. "At present, the processing power of today's cards is equivalent to that of early personal computers. Storage capacities are roughly equivalent to around three A4 pages of closely typed text, but this is being extended all the time."

The primary force pushing the rapid development and implementation of smart cards is the advantages they offer to government and business. Governments want to reduce benefit fraud, cut administration costs and provide a simple way to confirm people's identity, while businesses want to eliminate use of cash and collect data on spending habits.

But as enthusiasm for smart cards grows, so do concerns about the impact they will have on individual rights. While carrying a card containing health, tax and social security records may be convenient, how can you be sure the information will remain secure? If smart cards replace cash for all retail transactions, how can people retain anonymity? A person buying a kebab may not mind if his name is recorded by a shop, but if that person then buys an explicit magazine from the sex shop next door, it becomes more of an issue.

Information security is at the heart of a complex debate. For smart cards - especially those issued by government - to be widely accepted, users must be confident that the information they store can be accessed and changed only by those with the authority to do so. On one side of the divide, the holy grail of the "information society" requires that information be available when and where required. The ability of smart cards to store and easily retrieve details on individuals forms a crucial part of this vision.

On the other hand, civil libertarians see the use of such technology as another infringement of the rights of individual privacy. The National Council for Civil Liberties is calling for a softly-softly approach to smart-card use until the implications for personal privacy and confidentiality are properly examined.

It is all academic to Motorola, which insists that the thorny civil rights issue is one to be tackled by the card issuers and not the chip maker. "The market has bubbled along for almost 20 years, but it's now really starting to explode," Mrs Reid says. Motorola has been commissioned to make chips for the Spanish social security department (40 million cards), the German government's EC Card scheme (40 million-plus cards) and a host of smaller projects around the world.

Already, there is a project under way to install equipment in the UK's 20,000 post offices to allow staff to check cards issued to benefit claimants. At first, the scheme will use magnetic stripe cards, similar to cards used in cash machines, but these could be upgraded to proper smart cards in the future.

This worries the NCCL, which is primarily concerned about government- issued cards. It says individuals may be unable to access personal information to check its accuracy. The Data Protection Act of 1984 - the primary legislation under which smart-card systems will operate - does not provide sufficient protection for users, says the NCCL, because it was passed primarily to protect commercial interests.

While the main reason for the post office project is to cut down on benefit fraud, many businesses looking into the use of smart cards are more interested in doing away with cash. Once customers are used to swiping cards rather than handing over notes, business running costs drop. At the same time, the ability to gather information on consumers increases.

London-based research group Demos said recently that individual rights had been overlooked in the rush to implement smart cards. It believes users should have the right to remain anonymous in situations where identity is not necessary for the transaction, and have the right to control the uses others make of personal information held about them. It is pushing for the law to be based on the premise that unless an individual authorises access to personal information, it should not be allowed.

Banks, as well as shops, are keen to start using smart cards. According to Barclays spokeswoman Chris Tucker, it is only a matter of time before all banking customers carry smart cards. "A common standard for chips has now been agreed across the industry and we will start to see the first signs of new systems in the next couple of years," she said.

Barclays, along with a number of other high-street banks, plans to begin a widespread trial of smart cards during 1997, but an extensive trial has already started in Atlanta. Visa has issued competitors and spectators at the Olympic Games with smart cards that can be used to buy small-value goods such as newspapers and drinks. The results will be scrutinised carefully on this side of the Atlantic as well as in America. Regardless of whether legislation catches up with technology, smart cards are here and their use will continue to grow rapidly. It's not a matter of whether you'll have a card containing personal details, money, access rights and identity information in your pocket, but when. How happy you'll feel about it is another question.