Fremont, CA and Ismaning, Germany, August 13, 2004–SCM Microsystems, Inc. (NASDAQ: SCMM, Prime Standard SMY) today announced that the company will provide smart card readers for the European Union NETC@RDS pilot in Greece that kicks off with the start of the summer Olympics. The pilot is the next step in the EU NETC@RDS project that aims to speed the cross-border verification of healthcare benefit eligibility and claims processing for EU citizens between participating member states.

Today when an EU citizen visits another member state and needs healthcare services, he or she has to submit a paper form to claim reimbursement from his or her own health insurance. Visitors to the Olympics from Germany, France, and Austria will be the first to use a new pilot system that replaces the two forms, the E111 for tourists and the E128 for students or temporarily posted workers, with their national health insurance smart cards.

“We are pleased that SCM’s smart card reader will help set new speed records for health care processing as the NETC@RDS electronic healthcare pilot debuts at the summer Olympics,” said Robert Schneider, chief executive officer of SCM Microsystems. “This pilot is an important next step toward the wide-scale implementation of cross-border electronic healthcare benefits processing. The NETC@RDS program will provide European Union citizens with faster and more convenient treatment and claims filing, and healthcare providers will benefit from improved eligibility verification and lower claims handling and administrative costs.”

Here is how the new system works. If healthcare services or medications are needed while at the Olympic games, the individual presents his or her health insurance smart card at one of the 14 participating hospital emergency departments in Athens and Saloniki, Greece. The admittance clerk inserts the card into SCM’s smart card reader and accesses personal identification, benefit eligibility and claims processing information by reading it from the chip.

The health insurance smart card provides an electronic evidence of benefit entitlement for the insured person, automates the entry of personal and entitlement information, and establishes an electronic basis for further billing and clearing processes. The system speeds up the reimbursement process and reduces costs by verifying benefit eligibility, avoiding problems with incomplete or illegible forms, and processing claims electronically. The card also contains readable printed information for use in other facilities not participating in the trial.

“After the start in Greece, NETC@RDS will be expanded to all other participating countries,” said Dr. Gerhard Brenner, NETC@RDS spokesman from the central institute of ambulatory health care in Germany. “By combining the Internet and chip cards, administrative tasks will be simplified throughout the European healthcare system.”

Public and private healthcare providers from Austria, Finland, France, Germany, Greece, Italy, Czech Republic, Slovak Republic, Slovenia and Hungary are participating in the NETC@RDS project. More information about the project is available at http://www.netcards-project.com/new.

About SCM Microsystems

SCM Microsystems is a leading supplier of solutions that open the Digital World by enabling people to securely access digital content and services. The company markets and sells its smart card reader technology for network and physical access and conditional access modules for secure digital TV decryption to OEM customers in the government, financial, enterprise and broadcasting markets worldwide. Global headquarters are in Fremont, California, with European headquarters in Ismaning, Germany. For additional information, visit the SCM Microsystems web site at http://www.scmmicro.com.