Since it’s inception in the early nineties MULTOS has gained a reputation as the most robust, flexible and secure smart card platform in the market. The multi-application operating system enables a smart card to carry a variety of applications, from chip and pin payment to secure ID and ePassport. Previously, application developers had to write a separate version of the application for each type of smart card. MULTOS changed all that. Whereas earlier systems did not allow new applications to be installed, MULTOS enabled several applications to reside at once, regardless of microchip used.
Today, millions of MULTOS smart cards have been issued across a range of industries including contact less payment, Internet authentication, biometrics and healthcare. More than 75 issuers are now committed to issuing cards on the MULTOS platform, as well as 70 companies supplying MULTOS-related products and services. It’s fair to say MULTOS is in demand. Earlier this month, French giants Gemalto acquired MULTOS, the latest in a long line of companies battling to gain control of a seriously lucrative asset.
The smart card platform has a multitude of benefits. For starters, it’s the only operating system for smart cards to have been certified with the prestigious ITSEC Level E6 security rating, the highest available. MULTOS also boasts true interoperability, allowing multiple vendors to supply components and the ability to load and delete multiple applications. MULTOS is also ably supported by several of the industry’s leading organisations known as the MULTOS consortium, a group of international blue chip companies whose objective is to promote MULTOS as the smart card industry standard across all market sectors.
Natwest Group and Platform Seven
In 1993 the Natwest Development Team (NWDT), a department led by our very own Smartcard News founder David Everett, invented MULTOS. It was originally developed to support the Mondex International e-purse application. The NWDT undertook the ground breaking technical design, development and implementation of the Mondex electronic purse and other Mondex devices. The team played a pivotal role in one of the most security demanding projects ever when they developed a smart card operating system, brought to the market as MULTOS.
Then, Natwest Group decided to exploit its extensive knowledge of security in the smart card industry with the creation of Platform Seven, a UK-based centre offering secure component products and a wide range of services for the e-commerce market. Members of the new unit were drawn from the former Natwest Development Team.
Mondex International
In 1996, MasterCard purchased a 51% stake in Mondex, promising to promote MULTOS and support the technology’s development. Although no financial details were disclosed, the gross value of Mondex was estimated at around $100 million. The merger proved a great success and three years later the MULTOS chip became the first commercial product ever to achieve a security rating of ITSEC level e6. In the same year, Mondex International set its sights on conquering the Internet, with intentions to become one of the first online e-cash services. Having become a major global firm in the e-cash business Mondex agreed a deal with ActivCard to develop secure ID and access information for the MULTOS smart card environment. In return, ActivCard’s access tools technology would transfer over to MULTOS enabling Mondex e-cash cards to arrive with e-commerce facilities already built in.
MasterCard
By 2001, MasterCard International assumed full ownership of Mondex, snatching direct control of all the companies operations, most notably MULTOS. Under the agreement, Mondex continued to provide service to the MULTOS consortium, MasterCard’s preferred operating system for multi-application smart cards. However, despite it’s previous success MULTOS experienced fresh difficulties under the leadership of MasterCard. Once a contender to become the standard operating system for smart cards MULTOS now found itself in fierce competition with Java Card, a US based operating system threatening to dominate the market.
The MULTOS consortium announced plans to develop a low-cost version of the operating system aimed at banks gearing up for the inevitable conversion to smart cards known as ‘Step-one’. By providing a cheaper stepping-stone to fully-fledged MULTOS, the consortium hoped the project would convince card issuers to embrace the technology without forcing them to bear the cost and complexity of a full rollout all at once.
MULTOS backers characterised the move as a logical strategy that would allow financial institutions to make a more gradual transition to MULTOS based chip cards. Conversely, critics suggested it was a futile effort to keep MULTOS relevant in a market increasingly saturated by Java Card systems. It’s easy to see why this assumption was made. In 2002, the industry shipped 5-million microprocessor cards carrying MULTOS property compared to a staggering 170 million cards with Java Card properties.
One reason for this was Java card software governing the mobile phone SIM market. Since MULTOS was not a player in such a market it was crucial to consolidate its position in banking if it were to survive in the long term.
StepNexus
In 2006, a deal to move control of the MULTOS smart card operating system from MasterCard to a new consortium of companies was completed. The holding company revealed its new corporate identity, StepNexus Inc. The name was derived from Secure Trusted Environment Provisioning, with Nexus providing the connection between the technology and the consumer. In a partnership with Hitachi, Keycorp and MasterCard StepNexus acquired full jurisdiction over MULTOS technology. John Wood overlooked the consortium. Today he is the CEO of MAOSCO Ltd, a legal company set up to promote and develop the MULTOS specifications as an open industry standard.
Aiming to reverse the fortunes of MULTOS StepNexus devised several initial solutions with the main focus being on security and flexibility of the product. These were:
To make MULTOS the world’s standard secure multi-application smart card operating system. This was implemented using a similar project to ‘Step-one’ although this time StepNexus particularly targeted the SDA payment markets.
To reach new markets and sustain current ones. The solution aimed to extend to other environments where users were ‘seeking to benefit from enhanced trust and security’
StepNexus announced the acquisition of GlobalPlatform on MULTOS technology from Sentry, a privately owned Sydney-based company. The application enabled any MULTOS chip to support GlobalPlatform services and meant that the flagship platform MULTOS could provide compatibility with existing Global Platform systems.
Keycorp
In mid 2008 Australian-based Keycorp bought out the UK subsidiaries of StepNexus and subsequently acquired MULTOS as well as intellectual property rights and registered patents. As part of the deal Keycorp relinquished it’s existing shareholding in StepNexus and was forced to pay the holding company $1million. After the completion of the deal Keycorp owned the majority of shares, although former StepNexus partners Hitachi and Mondex International retained 20% of the shares in the new venture.
Gemalto
Keycorp’s reign was short-lived. By September Gemalto confirmed it had attained all Keycorp smart card business assets including trademarks, IP portfolio and of course, MULTOS. And all for a cool £22 million. As well as taking over the operating system Gemalto have also bagged the Key Management Authority (KMA) that manages MULTOS cards worldwide. Around 40 technical experts will join the company, most of whom are based in the UK and Australia. Gemalto hope the deal will contribute over $15 million extra revenue to the secure transactions and government program segments of Gemalto on an annual basis.
(Smartcard News Ltd, 2008)
It's been a hectic September for gossip already. Arabs arrived in Manchester, not to mention a Brazilian and a Bulgarian, a Frenchman turned up in the blue half of Merseyside and a Croatian found himself desperately deciphering a London Underground map in North London. But for me, it was the news of an unassuming Finnish goalkeeper finally hanging up his boots that overshadowed the rest.
