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NEW DEVICE MAKES SMART CARD TRANSACTIONS POSSIBLE OVER TELEPHONE

 NEW ORLEANS, May 24 /PRNewswire/ -- A novel device demonstrated by AT&T at a trade show here this week could make possible -- from any touch-tone telephone -- a wide range of remote transactions that, up to now, have required a personal computer or similar product. The new device, a telephone adapter for AT&T's contactless smart card, allows any touch-tone phone to be used for banking transactions, ticket purchases and other services from a home, office, hotel room, or other location.
 AT&T contactless smart cards look like credit cards, but they have microprocessors and memory chips laminated within their plastic shells, giving them PC-like capabilities (without the screen and keyboard).
 "The beauty of this device is that it combines ease of use with low cost," explains Diane Wetherington, president of AT&T Smart Cards, a leading supplier of contactless smart card systems. "The customer interface is far more user friendly than a PC, because in a typical application users would either speak or use the telephone keypad with the adapter to interact with the service provider's computer or human representative." Information stored on the card can also be read back to the user.
 "Until now, many of the promises of the information age, like home banking, have been a reality only for people who can afford expensive home computer systems and were willing to learn how to use them. This device will let anyone perform transactions from anywhere, without the need for expensive computer hardware as an interface," added Wetherington.
 Many banks today are expanding their businesses into home-based services that connect to their existing computer infrastructure. This device provides an inexpensive and user-friendly way to bring ATM-like capabilities and new services into the home or office.
 The adapter, which is about the size of a small paperback book, contains a smart card reader/writer and a modem, and can be priced low enough to make it affordable by most consumers. When plugged into a standard phone line, it allows a smart card to be used both to verify the user's identity and as a storage medium on which the transactions can be securely recorded. A single phone line is used for both the voice connection and the data link.
 Another traditional concern with home banking has been security. AT&T has developed a verification system that substantially reduces the possibility of fraudulent access to a bank account. Although the user only has to provide a simple password, the smart card and the bank's computer go through a security check to make sure the card is valid.
 A single AT&T smart card can be used for multiple applications. For example, smart cards could serve as bank cards, insurance information cards, and debit cards. Smart cards can also act as "electronic tickets" for airline travel, sporting events, plays, and concerts.
 A prototype of the smart card telephone adapter and sample services are being demonstrated at the American Bankers Association National Operations and Automation Conference, being held in New Orleans May 23 to 26. Among the applications being shown is the purchase of an airline ticket over the phone, which is recorded electronically on the card.
 AT&T Smart Cards plans to begin developing other applications together with banks, travel agents and other companies that can take advantage of this new technology, according to Wetherington. Patents on the novel device have been applied for.
 Additional Information About The AT&T Smart Card
 Although smart cards resemble credit cards, they are actually miniature computers that can store and process the equivalent of several typewritten pages of information. That data is retrieved by a card reader, which can be connected to a personal computer, automated teller machine, electronic lock, telephone, or other device.
 "Smart card technology makes an important shift from reliance mainly on centralized databases to increasing reliance on distributed databases," explains Diane Wetherington, president of AT&T Smart Cards.
 A single AT&T smart card can be used for multiple applications. For example, a single 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.
 "The future for smart cards lies in their multiple application capability, which allows for additional revenues and cost-savings for each of the service providers," according to Wetherington.
 AT&T smart cards are already being used in several novel ways. Under a marketing agreement signed in 1989 with Italy's Olivetti Co., AT&T's smart card is being used by drivers on the Autostrada, Italy's highway system, to pay tolls without stopping. Drivers approaching a toll plaza at a speed of up to 40 miles per hour 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, or recorded for billing later.
 AT&T will soon begin installing a similar system on three new toll roads in Orange County, Calif.
 "Electronic toll collection provides just one example of how smart cards will revolutionize the way everyday transactions take place," says Wetherington.
 AT&T and Nippondenso Co. of Japan have jointly developed applications for AT&T's smart card in such fields as computer security, employee identification, automobile record-keeping, building access control, telephone calling cards and financial transactions.
 Italy's post office now uses a pension-administration system supplied by Olivetti that utilizes AT&T's smart card a record-keeping device for pensioners. And 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.
 And that's just the beginning. NCR Corporation, a unit of AT&T and the world's largest supplier of automated teller machines (ATMs), is offering upgrade kits for its ATMs that allow them to interface with AT&T smart cards and offer customers additional services, like a security system that works by verifying the cardholder's voice print.
 AT&T and Trendar Corporation, the leading provider of truck-stop point-of-sale systems for fuel purchases in the U.S., are installing transaction stations for truck stops based on smart card technology. The SmartFuel System will move trucks more efficiently through fueling islands and cut down on costly billing errors.
 And the American Magnetics Corporation, a leading manufacturer of card-based door locks and security systems, is now offering security systems based on AT&T smart card technology.
 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. In addition, the card is rugged enough to withstand ordinary credit-card handling. In most cases, a card can be used for about 10 years before replacement.
 -0- 5/24/93
 /CONTACT: Michael Jacobs of AT&T Bell Laboratories, 908-582-4767/
 (T)


CO: AT&T Bell Laboratories ST: New Jersey IN: TLS SU: PDT

SM-OL -- NY038 -- 1644 05/24/93 11:12 EDT
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Date:May 24, 1993
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