Standardized driver's licenses -- boon or burden?
By Patrick Thibodeau
(IDG) -- A move in Congress to standardized driver's licenses with encoded, machine-readable data has promising but potentially costly implications for businesses that want to use the licenses to authenticate customer identities at everything from airline counters to convenience stores.
Although a growing number of states are encoding machine-readable information on driver's licenses, the states aren't all using similar standards or technologies. That creates problems for businesses such as Clark Retail Enterprises Inc., an operator of more than 1,330 convenience stores.
"It just costs more when you have multiple standards," said Pat Enright, information systems director at the Oak Brook, Illinois-based chain. Clark isn't checking licenses electronically because of technology issues. But he said that he would like to have that ability, saying it would help enforce age restrictions on products such as alcohol and tobacco and create an audit trail.
"It would definitely help us," Enright said.
Since September 11, Congress has sought to improve the security of driver's licenses by establishing a national means for checking them and by providing the bearer with an irrefutable unique identifier, such as those checked by biometric devices.
However, work toward a single standard has met resistance. Business trade groups are embroiled in a dispute with the Arlington, Virginia-based American Association of Motor Vehicle Administrators (AAMVA), which develops licensing standards for state motor vehicle agencies.
Business groups say the AAMVA has set a magnetic stripe specification that isn't compatible with the magnetic strip readers that businesses use to check credit and debit cards.
"Our needs have been ignored," said John Hervey, chief technology officer at the National Association of Convenience Stores in Alexandria, Virginia. "[The AAMVA's members] didn't believe they had to satisfy anybody's needs other than their own."
According to Hervey, the 130,000 stores operated by members of his organization would need $60 million in equipment upgrades to meet the specification.
Gene Kathol, vice president of research and development at Greenwood, Colorado-based First Data Corp., which provides payment services at about 2.6 million merchant locations, said the AAMVA specification would let motor vehicle departments store driver's license data on a part of the magnetic stripe the retail industry has all but stopped using.
The magnetic stripe on credit and automated teller machine cards, as well as on licenses, can hold data on three tracks. Businesses typically use Tracks 1 and 2 but have stopped using Track 3, which is a read/write track that can be rewritten by criminals using inexpensive equipment.
"I don't mind them moving toward a smart card. I do believe we will be going in that direction over time," said Kathol. But he questioned the use of Track 3. "We have diligently worked hard over the last 30 years to get away from it," he said. "Why on earth would we want to go back that way?"
Magnetic strip technology is used in about 22 states but is on the way out, according to Jay Maxwell, president and chief operating officer of AAMVAnet, the technology arm of motor vehicle association. "The card of the future could be a two-dimensional bar code or smart card," he said. Unlike a magnetic stripe, two-dimensional bar codes and smart cards are capable of storing more data.
Given such disparities in technology and needs, the technology standards debate has the potential to emerge as a key issue with lawmakers and regulators.
The AAMVA last week said it's seeking congressional support for upgrade drivers' licenses, as well as much as $100 million to pay for the technology state motor vehicle departments will need to implement the upgrade.
Although future technology may move away from magnetic stripes, work is under way to upgrade the 30-year-old data specification so it can hold more data, said Ronald O'Connor, a Boston-based ID security consultant.
O'Connor believes the federal government might have to mandate a technology standard that satisfies all parties. "If that were the case, I would suspect that you would want to go to the least expensive technology that works with legacy systems. It would be magstripes," said O'Connor.
Lawmakers will also have to wrestle with privacy issues. Businesses can make a legitimate case for scanning driver's licenses, and in many cases, they are required to by law to ensure accurate ID. But they may also relish the idea of capturing a lot of data about a customer with one swipe and adding it to their customer relationship management systems.
Privacy groups are already on the offensive, and even some IT managers are uncomfortable with idea of businesses having access to license data.
"I question the value of putting that much information in the hands of merchants," said Phil White, the IS manager at the Hacienda Hotel in El Segundo, California. "Do I want them to be able to zero in on me? No, I don't think so."
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