Litronic Inc., an Irvine company that took its first steps into e-commerce last week through a deal with San Juan Capistrano-based NetCity.com, is getting the attention of Wall Street.
The company’s stock has been on a rampage in recent weeks, more than doubling from less than $5 per share in November to around $12 per share last week. Much of that is attributed to the company’s ties to Microsoft Corp., whose next version of Windows will include a built-in smartcard-based security system developed by the Irvine company.
Its recent plunge into e-commerce probably doesn’t hurt, either.
Under the agreement with NetCity, Litronic will supply the online community with smartcards and card readers for the site’s members, numbered around 100,000. NetCity expects to have 1 million users by the end of the year, so the deal could be even bigger in the long run.
NetCity members will use smartcards to secure the site’s banking and e-commerce services as well as e-mail and discussion groups. As offline merchants begin accepting the cards,a big assumption on NetCity’s part,members will be able to use the cards in the real world, too.
Litronic’s grander hope is that smartcards will play a significant role in online commerce, which so far has less-than-perfect security measures.
Smartcards contain chips with detailed user information and encryption that add another layer of defense for consumers and merchants beyond the typical password. Though the technology is slowly taking hold in Europe and Japan, it has mostly bombed in the U.S., where lower telecommunications costs make standard magnetic stripe cards more feasible. n
