Signed and sealed on the internet

A TINY microchip storing our identities, our medical histories and even our cash is a device much used by science fiction writers. Truth is rapidly catching up with fiction, and smart cards with considerable intelligence have already been developed.

A smart card can store any information that can be put into computer code, from someone's credit-card details to the amount of units left on a phonecard. In finance, the application that is arousing most interest is the notion of a smart card as a way to establish someone's identity.

Companies using the internet to sell products, or even for insurance claims or portfolio management, need to check that customers are who they say they are. On paper they can do this with a signature, or by asking to see documents such as a passport or driving licence.

On line, user names and passwords provide a level of security, but they are not infallible. Moreover, they only work for existing customers who have proved their identities in the conventional manner.

Credit cards are the most popular way to pay for goods and services over the internet. Not everyone feels comfortable giving out their card details on line, however, and credit-card details are not an irrefutable proof of identity.

Several digital signature systems exist and are in use on the net, but they have disadvantages. They are cumbersome and they are linked to a computer rather than a user.

Putting the digital signature on a card solves the portability issue, and makes it more secure. It also does away with the need to remember dozens of different user identities and passwords for web sites. The first large-scale trial of a digital signature card started last week, when Barclays Bank and the Government announced a scheme allowing people who become self-employed to use a smart card to prove their identities over the net.

The card, called Barclays Endorse, is an identity or digital signature card. Users apply for a card by visiting a Barclays branch with conventional forms of identification.

After that, the cardholder authorises a document or transaction by putting the card into the computer, and unlocking it with a PIN that he or she chooses. The bank does not know the PIN and it is not sent over the net.

During the trial, the card details and signature are verified by a server at Barclays, which holds details of lost and stolen cards. The system is funded by a small charge for the authorisation service.

q Links: www.barclaysendorse.co.uk

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