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CHEMICAL BANK AND AT&T FORM SMART CARD ALLIANCE

 NEW ORLEANS, Nov. 17 /PRNewswire/ -- Chemical Bank and AT&T Smart Cards today announced a strategic alliance arrangement aimed at introducing smart card banking applications into the New York City market.
 The announcement was made at the Retail Delivery Systems conference here, the automated teller machine (ATM) industry's largest annual trade show.
 Used as ATM cards, smart cards can offer customers enhanced security and a broad spectrum of new services. "We see smart cards as an opportunity both to offer our customers greater convenience and control over their funds, and to reduce fraud by providing a more definite customer identification," says Ronald Braco, Chemical Bank's senior vice president for electronic banking.
 In the alliance's first trial, a number of Chemical employees in New York City will be issued smart debit cards that can be used for purchases in their company cafeteria. The employees will be able to transfer cash value to the cards from their bank accounts at select Chemical ATMs, which will be equipped to read smart cards. AT&T's NCR division is supplying the smart card-compatible ATMs. If this first trial is successful, the internal program will be expanded and other applications for the card will be added.
 Once the smart card technology has proven itself in employee trials, Chemical Bank will consider offering the new cards to its broader customer base.
 AT&T contactless smart cards look like conventional, magnetic-stripe bank cards -- they're the same size and just as thin -- but they have microprocessors and memory chips laminated within their plastic shells.
 Their electronic memory can hold the equivalent of several pages of typewritten information, personalized to the card's user. That data is accessed by a reader/writer, which can be installed in an ATM or point-of-sale terminal, or connected to a personal computer, telephone or other device.
 "Chemical Bank is taking a leadership role in the banking industry by being among the first to bring this technology and new applications to customers," says Diane Wetherington, president of AT&T Smart Cards. The AT&T unit, based in Somerset, N.J., is a leading supplier of contactless smart card systems. "In the future, we fully expect all banks to migrate to smart cards that will be capable of much more than today's ATM cards."
 "Smart cards can, and probably will, change the entire nature of consumer banking," agrees Braco. "We see the smart card becoming the primary vehicle for delivering transaction and information services to our customers. A single smart card can serve as debit, credit and ATM card, all in one. Customers can access the cards from ATMs, telephones, interactive TV sets, and merchants' point-of-sale terminals.
 "As we look ahead, the smart card could become the electronic checkbook of the future, reflecting all of a customer's payment transactions," he adds. "Consumers will have the ability to manage their entire financial portfolios at any time and in almost any location."
 "The need for greater security is another important driver of this technology, particularly in a market like New York City," said Wetherington. "The unauthorized reading of a smart card is virtually impossible, and as smart cards come to replace cash in many transactions, crime at the ATM becomes less likely."
 The two companies are considering other ways the Chemical cards might be used in the New York market, including retail, the electronic delivery of government benefits, transit and health care applications.
 Additional Information About the AT&T Smart Card
 A single AT&T smart card can be used for multiple applications. For example, one card could store and process information about a traveler's airline, rental car and hotel arrangements, functioning as a bridge between incompatible data systems, tracking use, and providing an immediate reward for the frequent traveler.
 At the core of AT&T's smart card is an 8-bit microcomputer and 3 kilobytes of electrically erasable read-only memory (EEPROM). The card features its own operating system, an asynchronous serial data link and a security system to protect files from unauthorized use.
 AT&T's smart cards are "contactless," meaning their electronics are completely enclosed, and they transmit data to a reader without the metal-to-metal contact required in smart cards where the electronics are surface-mounted. This design reduces wear, contamination and damage from static electricity.
 "Of all of the suppliers of smart card technology we looked at, only AT&T had the combination of superior technology, experience in the consumer market, and longevity that we were looking for," says Ronald Braco, senior vice president for Electronic Banking at Chemical Bank.
 AT&T smart cards are already being used in several novel ways:
 Transportation -- Drivers on a new toll road in Orange County, Calif., are using AT&T smart cards to pay tolls electronically, without stopping at a toll booth. Drivers approaching a toll plaza insert a smart card into a transmitter mounted on their dashboards. Information stored on the card is transmitted to the toll station via radio link, and the cost of each toll is debited from a prepaid amount on the card. Commuters can also use those same cards for other purposes.
 Under a marketing agreement signed in 1989 with Italy's Olivetti Co., AT&T smart cards are being similarly used by drivers on the Autostrada, Italy's highway system.
 Intelligent buildings -- AT&T and Nippondenso Co. of Japan have jointly developed applications for AT&T's smart card in such fields as employee identification and building-access control. Also the American Magnetics Corporation, a leading manufacturer of card readers for security systems, point-of-sale devices and public telephones, has incorporated AT&T smart card technology into its product line.
 Electronic benefits -- The Italian government now uses an electronic benefit system that uses AT&T's smart card as a stored-value device for retirement benefits. Governments could also use smart cards to replace printed food stamps and benefit checks, reducing fraud and increasing security for the recipients.
 Computer security -- Another customer uses the smart card to limit access to a computer system containing proprietary information for its sales force. Authorized users dial into the system, which has been programmed to interface with a smart card, from their portable computers. Without the card, the system cannot be accessed. As an extra security measure, the users must also enter passwords.
 Other Applications AT&T is Pursuing Include:
 Health Care -- Smart cards can be used to record critical medical information and other health-related information, such as insurance coverage, and the location of other patient records, such as X-rays and MRI scans. The card can also aid in the submission of claims electronically.
 Retail -- Frequent shopper cards can be used to entice customers to purchase a particular brand or to shop at a particular store.
 Travel -- Smart cards can be used as electronic tickets, hotel keys and telephone calling cards. They could also store frequent flyer credits and other promotional entitlements.
 Campus -- Students and/or faculty can be assigned smart ID cards that would be used as keys for dorm rooms, parking lots and computer centers, and as debit cards for meals, books, photocopies, vending machines and washing machines.
 -0- 11/17/93
 /CONTACT: Michael Jacobs of AT&T Smart Cards, 908-582-4767, or Judy Walsh of Chemical Bank, 212-270-2914/
 (CHL T)


CO: AT&T, Chemical Bank ST: Louisiana, New York IN: FIN SU: PDT JVN

LD -- NY004 -- 5349 11/17/93 10:01 EST
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Date:Nov 17, 1993
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