Banks deny link to plans for national identity card

UK banks have quashed speculation that that they have been in discussions with the Government over using microchips in debit...

UK banks have quashed speculation that that they have been in discussions with the Government over using microchips in debit "chip" cards as a cost-effective basis for a future national identity card.

Their denial came ahead of a controversial government consultation paper on a possible national "entitlement card", which was expected this week.

On Monday reports claimed that the Government had been in discussions with high street banks about the possibility of a joint project to issue ID cards, in a bid to limit the cost of the project. A national ID card scheme could cost more than £1bn to develop and roll out, according to industry experts.

However, high street banks this week denied that they had been in discussions with the Government over a possible ID card scheme that would guarantee access to public services and help to reduce benefit fraud.

A spokesman for payment clearing association Apacs, whose members include the leading UK banks and building societies, said, "This is not something we are looking for at the moment."

Although it would be possible to store personal information on bank debit cards, many of which now have an embedded microchip, banks are focused on another major technology overhaul - a £1.1bn programme to reduce fraud by authorising transactions with a customer Pin code rather than by signing a receipt.

The government consultation paper on a national ID card will look at the cost and technical options for rolling out a national ID card, which is likely to be smartcard-based.

The Home Office is due to issue a smartcard ID card for asylum seekers by the autumn. Computer Weekly revealed last year that a Home Office agency had completed a feasibility study into a smartcard passport that would act as a de facto voluntary ID card. The card would be likely to include biometric data, such as fingerprints or retinal scans.

However, concerns have been raised over the security of smartcards.

Earlier this year scientists revealed details of a low-cost attack that could allow criminals to read and copy confidential data from smartcards using a £20 camera flash and a laboratory microscope.

Previous attempts to roll out a nationwide smartcard system have run into severe problems. A joint project between the Post Office, the Benefits Agency and ICL to automate the payment of social security benefits was abandoned after four years, at an estimated to cost the taxpayer £1bn.

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