Smart Money Signs up for ID Card Boom

French smart card makers and IT companies are gearing up for an emerging market in national identity cards, as countries around the world look to introduce electronic identification.

Britain, France, Germany, Italy and Spain are also in talks over a common standard which would allow each country to recognise each other's national ID cards. This would open the way to a European passport, with a readable chip in the back cover. France and Germany are discussing a system for reading each other's ID cards.

The cards mean extra demand on top of the market for bank cards and mobiles, which use chips.

Frederic Trojani, marketing director of smart card maker Axalto said the ID card market is taking off with the new systems expected to come into effect around 2008.

Belgium began issuing a new-style ID card last year to its 11m people. The cards will allow the user to use an electronic signature for "signing" documents online, giving them the legal status of paper documents.

Axalto makes the Belgian card and hopes to use its experience to win other contracts. The new card is expected to evolve so it can be used for other purposes, including paying taxes and storing medical details.

In April, the French government approved the INES project, an acronym for secure electronic national identity, which is intended to meet the US government's demand for EU countries to supply an electronic passport and the European Commission's desire for biometric information to be included on travel documents from August 2006.

The French card represents a potential market of 45-50m users, who would have to pay about E10 ($12, Ł8) price for a card, Trojani said. The cost of manufacture would be split between government and industry in a public private partnership deal.

In Britain, the government is looking at issuing new passports with a chip, which at a later stage could become an ID card. With an estimated 50m passport holders, the UK is an attractive market as new documents are issued as replacements. IT consultancy Atos is working on the UK project.

Large companies such as EADS, Thales, Safran -- the company created from the merged Sagem and Snecma -- are flocking to the ID card market, which will need large operating systems and database management.