Proximity technology is the giant of the access control industry. It is so prevalent that it has trickled down to almost every type of application and has an enormous installed base. But it would be a mistake to rest on this technology going forward. Manufacturers and systems integrators today see varied levels of interest and sales in smart cards, ranging from entities that buy mostly smart cards to facilities that use entirely proximity. But virtually all agree that smart cards are the future and it is best to be prepared.

“We still have a significant user base on legacy proximity technology, so we sell a fair amount of standard proximity,” says Ron Oetjen, president, Intelligent Access Systems, Garner, N.C. “But for a new client or new system, the vast majority if not virtually all of what we install are smart card systems.”

David Nichols, director of market strategy for security identify, HID Global, Irvine, Calif., agrees. “For most of the new installations we are seeing, they are going to high-frequency smart cards because that technology offers a higher level of security and additional application space for customers looking for that kind of opportunity.”

However, that by no means indicates that anyone is planning on abandoning proximity soon. It has and will continue to have a place for many years to come. And access control professionals have widely varied opinions about which technology the market is demanding.

“Smart card have been around for a long time now,” says Dave Malen, principal, Camden Door Controls Inc., Toronto. “What we are seeing in the marketplace with smaller and mid-sized access control systems is they really aren’t seeing the benefit to the smart card.”

David Price, marketing manager, Camden Door Controls, adds: “Smart cards are not migrating down yet to the small and mid-sized day-in and day-out access control application. It is like any product; as you make more of them, prices come down. The pressure is now on for government, healthcare, military, etc., that will allow that product to get to the point where it will be a better technology that can be purchased for the same price as proximity now. That is maybe two to five years out.”

Some say similar pricing is here already, and it is for the lowest-end smart cards that offer the same functionality as basic proximity but with higher security and some memory on the chip (see related article, “What About Cost?” ). But multi-functional capabilities still cost more, possibly making the choice less obvious to the end user.

“At the government level, when a single card works across multiple organizations that is a benefit that the smart card offers,” says Wayne Jared, president of Indianapolis-based Infinias. “The question would be whether commercial organizations see the same value. To me the real value isn’t so much the smart card as much as having a single issuer that is managing a single credential for you no matter where you go.”

Proximity is an old technology, describes Bob Holland, marketing manager, Secura Key, Chatsworth, Calif. “Customers who are used to proximity like it and at the lower end they are not as concerned about security as, say, a large corporate facility. The smaller dealer says, ‘Proximity works, why fix it?’”

But, relates Jennifer Toscano, marketing manager at Ingersoll Rand Security Technologies, Carmel, Ind., the forward motion is all geared to smart cards. “Prox is what it is. The investment, growth and research are in smart cards. I think the existing market is still largely installed prox. But as you are looking at new installations it is becoming more and more evident that it is advantageous to dealers to at least recommend smart cards. We are seeing more customers shift that way because it provides a level of security that is greater than proximity. You can get an entry-level smart card for approximately the same price as proximity.”


Proximity is stable. It works. It is relatively inexpensive and easy to get. Many integrators at this point probably aren’t seeing a reason to change, and for the time being, that might be fine — to a point.

“There is a place for proximity in the immediate future,” Oetjen believes. “It will take a long time to wind that down and a lot of people are not looking to move at this point. We will continue to sell legacy proximity readers and cards. I don’t see many people buying new prox systems now, but the sheer volume in the market already will keep it around for the foreseeable future.”

 Richard Sedivy, director of marketing at Doorking Inc., Inglewood, Calif., also acknowledges the legacy factor. “For our market niches, which are apartment communities, gated communities and small businesses, there is more demand for a simple proximity card. I think smart cards are absolutely growing and we will see more of them in the very near future. By the same token, we will never see the proximity card go away for the simple fact that thousands and thousands of systems in the world are using that technology. As long as those systems are up and running many of them will just continue to replace cards, not systems.”

In addition, the end of the HID Global patent in 2009 means that more and more companies can produce proximity systems. In some cases, this has led to some new product development, such as a phone entry/proximity combination from Camden Door Controls.

“The cool part about proximity technology right now is that, although the technology itself isn’t changing, we are starting to see it integrated into non-security products, like telephone entry, which is really just specialized intercom,” Price says. “We now have a price point on that technology that allows us to apply that to a communication system. Now, rather than having to buy a distinct access control system with the cost of a panel and reader and separate management of all that, you can add a simple card reader or two for very little money.”

Malen adds: “When we first started selling proximity systems it cost about $3,000 to $5,000 per door to put on a prox reader and controller. Now you are talking probably 10 percent to 15 percent of that number for the dealer to install a system. It has expanded the market tremendously.”

Other manufacturers are taking advantage of the patent expiration to expand their line of proximity. “Our dealers have asked us for HID-compatible cards and a reader that does both, Holland says. “So we developed a dual-proximity technology.”

But, Holland adds, it would be a mistake for dealers or integrators to not at least dip a toe into the smart card waters at this point. “I don’t think you will see any more new products or technology advances with proximity. There was talk that they would add more security to prox, but I think that in order to promote high-frequency smart card technology, manufacturers won’t make proximity any better than it is. They want people to upgrade.

“I would say with new installations dealers and installers should really start using smart card technology. The security is better and the future potential for adding other applications is better. If they keep putting prox in, they are just going to get stuck there.”


Besides the obvious distinction that a smart card has computing and memory capabilities on a chip and proximity cards don’t, there are other factors recently that have helped the smart card pull forward in more than just the government segment.

“There has been a significant change in the market and a lot of it has to do with some recent articles and case studies that showed that legacy 125 kHz proximity is not the most secure technology,” Oetjen says. “A lot of our customers, especially those in the critical infrastructure space, were concerned. With smart cards, almost all of them have encryption technology and capabilities built in.”

Bill Smoyer, western regional sales manager, Access Hardware Supply, San Leandro, Calif., agrees that security is an issue in customers’ minds. “I think with smart cards, one aspect that is sometimes overlooked is their ability to actually verify that there is an exchange between the card and reader. There are commercials on the consumer side where someone is walking around with a smart phone trying to grab information from proximity systems. With a smart card you can’t do that. There are checks and balances. As the technology of the ‘bad guy’ grows, that will in turn drive the need for smart cards on the security side.”

The “digital signature” is really the ultimate goal, says Philip Lach, sales manager, H&S Protection, Stevens Point, Wis. “The goal within society is to create a digital signature to provide personal identification and eliminate the problem of identity theft. How standards will be written is yet to be determined. But that is the way the direction of the world is heading.”

Currently, efforts like this are being spearheaded by the government and its many regulations regarding smart cards. But that will find its way down to all levels at some point. “The government is going to drive everything, but the private sector will follow that, depending on how they do business with the government and in turn flow down to smaller companies,” Lach adds.

All of this potentially means big opportunities for systems integrators.

“Our company is positioned to sell smart cards,” Lach says. “Our business model suggests we have a very advanced and bright future ahead. Really, when you look at the basics of what we are doing, we are opening doors. When you apply smart card technology to that now we are not just opening a door, we are evaluating whether the person operating the credential is who they should be. If not, we know it. When you look at it from that point of view — that is a huge leap into credible access and real value. To me it’s a huge opportunity. If I can go to a facility and educate them on why this smart card technology is better, based on what they are trying to do, now I have instant credibility. I am not just a ‘me too’ corporation.”

Getting into the smart card business ahead of the curve also allows the systems integrator to play a greater role in his customer’s transition. It also expands his role, Oetjen believes. “It opens up opportunities for you to go elsewhere with your clients as opposed to just sticking with access control. If you want to ricochet into providing other business solutions the smart card is the way to go. It gives you the opportunity to look at logical access, PC login, revenue collection and to provide solutions outside of just security. It definitely felt like the right move to make for our company.”

And there is just plain more going on technology-wise in the smart card field. In order to offer clients the “latest and greatest,” integrators need to look at smart cards. A few examples of these developments include more memory configurations that allow for more applications on the card, as well as multi-technology cards and readers specifically designed to help the transition from proximity (or even older technologies) to smart cards, or even between smart card types.


Whether now or sometime in the near future, end-user clients are going to start needing and wanting to transition to smart cards. The best way for integrators to benefit from the inevitable transition is to prepare for it.

“My advice is to be careful,” Oejten cautions. “If your lead solution is legacy proximity, the smart integrator competing against you will sell the advantages that smart cards bring. You need to make sure you are putting the right solution in front of the customer.”

For now that might mean offering a multi-technology reader or credential for when the occasion arises.

“Take the aftermarket,” Smoyer says. “You have a system installed and a prox reader goes bad. It is important to offer the client a multi-technology reader that uses both smart cards and 125 kHz cards. Then if they do decide to make the transition down the road, it is less painful.”

In fact, that may be the way of things for a long time to come, Nichols says. “I see movement toward the support of multiple card technologies within a single access control system. In today’s world you might order iClass or prox that just supports that technology. But in the future I see a scenario in which you will be able to configure an access system to respond to multiple access control technologies.

“I certainly think there is opportunity right now to go out to end users and discuss the combined readers and multi-tech readers and credentials as a way to make that transition occur over time. It doesn’t have to be all upfront. We can help end users migrate at a pace that is appropriate for their level of security as well as budgetary needs. The more comfortable dealers are with discussing that approach, the more they can learn about additional needs an end user may have. Don’t look at it as a one-time opportunity, but as a phased approach over time.”

These are early days in the United States, Toscano emphasizes. “We are really at the beginning phases compared to other parts of the world, which means we can learn lessons from elsewhere for things like migration from prox to smart cards. There is more than one way to convert a campus. One way is multi-technology readers. We provide readers for 10 percent to 15 percent more than a prox-only reader, which read both and also read prox from multiple suppliers. Even for customers that want proximity technology today, consider implementing multi-tech readers. That positions them for future growth. Multi-tech readers also provide additional benefit to dealers because they can reduce their number of SKUs.”

Lach recommends positioning smart cards to the end user as a business case. “If you put yourself in the customers’ shoes and help them understand how this technology will make them more competitive, you will be able to position the product very well. How does this product lower their overall cost so they can lower it, in turn, to their customer? If they can prevent employee theft by providing a smart card technology so they know where people are at all times, for example, that will make the end user more competitive.”

What About Cost?

There is some debate about whether smart cards and proximity are comparably priced right now, or whether it will take a few more years. Part of the confusion stems from the wide variety of smart cards and different “levels” of the cards themselves.

“HID Global has taken the perspective of pricing aggressively the entry-level iClass so it matches an entry-level proximity system,” says David Nichols at HID Global. “It’s not a matter of cost at that point. We do have some readers that are priced a little higher based on functionality. In terms of overall module prices we have seen some good movement on cost for those chips. So there are systems that allow you to price equitably between proximity and smart cards.”

He acknowledges, however, that entry-level smart cards are essentially “smart” proximity in terms of capabilities.

“It is based on the size of the memory on the card,” explains Jennifer Toscano at Ingersoll Rand Security Technologies. Smart cards come in different memory sizes and you pay more for larger memory sizes. You also pay more for cards that have a higher level of encryption. However, you have to remember that even entry-level smart cards still have 2.5K more memory than a prox card, because prox doesn’t have the ability to store anything.”

Comparing entry-level smart cards to prox makes things right about even. “Right now there is almost no difference between proximity and smart cards,” says Bob Holland at Secura Key. “Prox cards and readers were cheaper, but I would say that is getting to the point right now where there is almost no difference between them. Our smart and prox cards are pennies apart. There are so many non-security applications driving the cost of smart card chips down.”

But pennies matter, says Richard Sedivy at Doorking. “From my point of view they have come down, but not to the same price level as a simple proximity card. If a card costs a dime more and you are issuing thousands of cards, that can add up to enough dollars that it makes a difference.”

Still, he adds, this is changing quickly. “Prices will continue to come down and we will move forward with it.”

Government Stepping up Smart Card Use

According to a memorandum sent to all government departments and agencies in February, the implementation of HSPD-12 and the government-issued PIV (personal identity verification) cards is not only in full swing, but will ramp up even faster.

The memorandum outlined a plan for all agencies to “expedite the Executive Branch’s full use of the credentials for access to federal facilities and information systems.” It asked that each agency develop and issue a specific implementation policy by March 31 and include these requirements, among others:

•   All new systems under development to use PIV credentials effective immediately before the agency can use funds to complete other activities.

•   Beginning in Fiscal 2012, all existing physical and logical access control systems to be upgraded to use PIV credentials.

•   All procurements for services and products that involve facility or system access control must now be in compliance with HSPD-12 policy.