Engaging, Enabling and Evolving Commerce in Canada since 1989

February 2006 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. Transit Bets On 'Smart' Cards
3. MasterCard's PayPass Moves Into Cineplex Entertainment Theaters
4. Overseas Cardholders Exempted From UK Chip and Pin Deadline
5. Credit-Card Fare Test No Token In N.Y.
6. Keycorp Launches POS Solution For Oil And Gas Market
7. Amex Misses UK Chip-and-Pin Deadline
8. Joyo Bank To Add Biometric Data To Debit Cards
9. San Francisco Giants Team Up With Visa Contactless
10. South Africa's EMV Migration Hits Further Delays
11. South Korea Plans Smart Card ID
12. APACS Sees Web Commerce As Next Step For Chip-and-Pin
13. New Smart Card Alliance Paper Addresses The Benefits Of Smart Cards For Healthcare Applications
14. PayPass Launched In Malaysia
15. Four Swedish Counties Join Regional Smart Card Transit Fare Collection System
16. Additional Stories Available In Members Only Section

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

Citi Cards Canada ~ new member

GENERAL

Canadian Banknote ~ member since 2003
Keycorp Canada ~ member since 1998

ASSOCIATE

Pat Ranney ~ member since 2005er

UPCOMING EVENTS

Smart Card Alliance presents - 5th Annual Smart Cards in Government Conference 2006
April 18-20
Arlington, VA, USA
http://www.smartcardalliance.org

CardTech/SecurTech 2006
May 2-4
San Francisco, CA, USA
http://www.ctst.com

ACT Canada presents Cardware 2006
June 13 - Toronto, ON, Canada (financial focus)
June 15 - Ottawa, ON, Canada (government focus)
http://www.actcda.com

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (02/27)

Needs, not technology, drive the show

When I was younger, a manager told me that being right is not always enough. You also need the right timing. Smart and optical card technologies have long been right for other countries. I've always believed they are right for Canadian applications and now many others share that conviction. The time is right in Canada.

For transit systems, there is the proven need to reduce fraud. Contactless smart cards meet this need while increasing customer convenience, which could in turn promote ridership. The Province of Ontario and participating cities and transit authorities involved in the GTA fare card project should be commended for recognizing this well before the recent discovery of TTC fare fraud.

Naysayers have said that smart cards would not eliminate all fraud, so why bother making the significant investment. The total elimination of fraud is not the goal, but to reduce as much fraud as possible is, and that goal that has been realized by other metropolitan areas that have made this move. The goal is also to improve customer convenience, achieved by helping them move more quickly onto buses and trains. The added benefit is to reduce costs by using cards that can be reloaded, rather than tickets and passes that cannot. The ability to add additional applications to this type of card speaks to many more advantages that could be available to transit users.

The need driving this show is to make transit better. Smart fare systems work.

CARDWARE 06 GOES ON THE ROAD

Senior executives in both the public and private sectors are seeking answers to questions about advanced card infrastructure investments and identity management, so we are taking the annual Cardware on the road.

On June 13th, the Canadian financial sector and stakeholders will meet in Toronto to investigate practical ways to maximize EMV investments. The meeting explores means to leverage infrastructure investments and plans, as well as identifying value-add EMV business opportunities. Contact and contactless technologies will be featured.

June 15th, the government, both federal and provincials, will meet in Ottawa to look at emerging trends in identity management. Establishing, authenticating and protecting each person's identity is an important foundation to our ability to work, travel, bank and conduct our day-to-day business. Increasingly we are beginning to understand that we must not only control access to our offices, but also to our data, protecting it not only from outside attacks and also from internal misuse. The Cardware 06 Identity conference examines options open to government groups that issue ID to citizens as well as to employees and contractors. Balancing privacy and security will be among the topics on the program.

Mark your calendars now. You will receive program information in the coming weeks.

2. TRANSIT BETS ON 'SMART' CARDS
Source: The Edmonton Journal, Gordon Kent (02/14)

Edmonton Transit is looking at whether to replace tickets and monthly passes with "smart" technology, letting passengers pay with plastic cards they swipe past electronic readers in buses and LRT stations.

The smart cards have other potential applications and could be used for a variety of city transactions, from paying admission at a recreation centre to taking out a library book.

Projections show the system would pay for itself in under eight years, bringing in millions of dollars over the next decade through reduced fare evasion, increased ridership and other improvements, he said.

But tickets and monthly passes won't disappear soon. It would take about three years to get the system running if it's approved by city council, and tickets would likely be available for another year or two as passengers adjust to the change.

3. MASTERCARD'S PAYPASS MOVES INTO CINEPLEX ENTERTAINMENT THEATERS
Source: Contactless News (02/15)

Cineplex Entertainment, Canada's largest motion picture exhibition company, and MasterCard Canada have teamed up to offer moviegoers state-of-the-art payment technology designed to improve customer convenience and payment speed. Moviegoers carrying PayPass-enabled MasterCard cards will be able to pay for tickets and concession items by simply tapping their cards at designated PayPass readers.

Cineplex Entertainment will implement the MasterCard PayPass program in three theaters in the Greater Toronto Area: Cineplex Odeon Queensway Cinema, SilverCity Mississauga, and Coliseum Mississauga. Cineplex Entertainment will expand the program to more than 100 Cineplex Entertainment theatres across the country throughout 2006.

Cineplex Entertainment guests will simply tap their PayPass-enabled card or fob on a specially equipped merchant terminal that utilizes radio frequency (RF) technology to complete the transaction. PayPass eliminates the need to fumble for cash and coins, hand a card over to a clerk or swipe the card.

MasterCard is a member of ACT Canada, please visit http://www.mastercard.ca.

4. OVERSEAS CARDHOLDERS EXEMPTED FROM UK CHIP AND PIN DEADLINE
Source: ICMA Daily News (02/08)

With only days to go until all British Chip and PIN cardholders will be required to use their PIN to be sure they can pay with their card, the UK Chip and PIN program has reassured overseas cardholders that they will still be able to sign for their purchases in the UK after the February 14, 2006 deadline.

For the last three years, the UK banking and retail industries have been working together to implement a new fraud-fighting technology for debit and credit cards.

This new Chip and PIN technology involves a customer entering a four-digit PIN instead of signing their name when paying for goods and services. The service has been implemented to stem the rising level of fraud which, if left unchecked, had been forecast to cost British business more than GBP800 million a year by 2005.

In the UK almost all the conventional magnetic stripe cards have now been upgraded to Chip and PIN with over 80% of shops and businesses accepting PIN transactions.

5. CREDIT-CARD FARE TEST NO TOKEN IN N.Y.
Source: ICMA Daily News (02/06)

Some New York City subway riders will be able to use a credit card or key-chain token to ride the trains later this year, as part of an experimental program to get people through the turnstiles faster.

The Metropolitan Transportation Authority is working with MasterCard Inc. and Citigroup Inc. to install "smart card" readers on 4, 5 and 6 trains in Manhattan, as well as at the Jay Street-Borough Hall stop in Brooklyn and 23rd Street - Ely Avenue in Long Island City, the authority said in a statement.

The system, using MasterCard's PayPass technology, will allow riders to tap their credit card or token on a turnstile reader. It will be installed in 25 stations within a few months, the MTA said.

The six-month trial will be paid for by the MasterCard and Citigroup. MasterCard and Citi Card are members of ACT Canada; please visit http://www.mastercard.ca & http://www.citigroup.com.

6. KEYCORP LAUNCHES POS SOLUTION FOR OIL AND GAS MARKET
Source: Keycorp (02/07)

Keycorp announced that it has developed a Point-of -Sale (POS) solution for independent and mid-sized petroleum and auto service retailers.

Called PetroPay, the solution is a comprehensive terminal management system that addresses the need of smaller oil and gas businesses for centralized management and processing of station data, traditionally enjoyed by the large chains.

"With PetroPay , smaller oil and gas retailers can benefit from having all of their fleet management, gas, credit and debit, invoicing and cash register functions combined into a single appliance - at less than half the cost of large chains' systems," said Paul DeRosse, Managing Director of Toronto-based Keycorp Canada, in launching the product to the North American market.

Features of the solution include such capabilities as multiple payment types and markets, remote terminal support, enhanced reporting systems, and support for private label, loyalty and fleet cards.

The system also manages a variety of non-financial indicators - including pump volume readings, fuel drops, and price changes - and allows users to easily pull up management reports, set up regional coupon programs, and tailor applications according to their specific needs.

Keycorp is a member of ACT Canada; please visit http://www.keycorp.net.

7. AMEX MISSES UK CHIP-AND-PIN DEADLINE
Source: CardTechnology (02/14)

Most credit cards issued by American Express Co. in the UK have not been updated to meet the Feb. 14 deadline for conversion to a so-called "chip-and-PIN" card system, a UK-based AmEx spokesperson tells Card Technology sister publication CardLine Europe. As of Feb. 14, UK card issuers and merchants are supposed to have completed a switch to smart cards that require consumers to enter a personal identification number, rather than a signature, at the time of purchase. From Feb. 14, merchants that override the PIN requirement and accept a signature for a chip-and-PIN transaction will be held liable if the transaction proves fraudulent. "We have been updating cards as they come up for renewal, but most are still not chip-and-PIN ready," the spokesperson says. "We will continue normal signature verification procedures for cards that haven't been renewed." According to the spokesperson, AmEx has informed merchants that accept its cards to expect a mix of old-style, signature-based cards and chip-and-PIN cards for the foreseeable future. "We don't envision any problems, as merchants are used to signature verification for our cards," the spokesperson says. The spokesperson would not disclose how many cards AmEx had converted to the new system, nor when the card issuer would complete the switch to chip-and-PIN.

8. JOYO BANK TO ADD BIOMETRIC DATA TO DEBIT CARDS
Source: CardTechnology (02/13)

Japan's Joyo Bank will soon issue new chip-based debit cards with a chip that stores scans of the veins in a customer's finger, according to a report from Japan's Corporate News Network, an English-language news service. The report says the bank will replace its ATMs with new machines that include devices that will scan a customer's finger and compare the live vein pattern to one stored on the chip. According to the report, Japanese electronics giant Hitachi Ltd. will provide the scanners to be used in the ATMs and will also assist the bank in issuing the smart cards. The bank hopes the new technology, which is to be introduced on March 22, will reduce ATM and debit card fraud, the report says. The Bank of Tokyo-Mitsubishi already has introduced a "Super IC Card" that uses a palm-vein-pattern biometric to identify cardholders withdrawing cash. Japan Postal Savings Bank, Mizuho Bank and Sumitomo Mitsui Banking Corp. have said they plan to launch similar biometrics-based ATM chip cards this year.

9. SAN FRANCISCO GIANTS TEAM UP WITH VISA CONTACTLESS
Source: Contactless News (02/20)

The San Francisco Giants and Visa, a proud Giants sponsor since 1997, are making it easier for baseball fans to speed through concession lines at AT&T Park, now that it's equipped to accept Visa Contactless payment cards via 100 special terminals being installed by Hypercom Corporation.

In Visa trials, contactless payment card transactions proved an average of 25 percent faster than using cash. And the less time fans spend in line, the more time they can spend enjoying the game.

"It is our top priority to create the best possible experience for our fans when they are at the ballpark," said Larry Baer, Giants executive vice president and chief operating officer. "We believe that with Visa's new Contactless technology, the fan experience at our games in 2006 will further be enhanced by faster-moving concession stand lines. We are pleased to be partners with Visa, and to offer the latest in payments technology at AT&T Park."

Visa Contactless technology has been growing in popularity. To date, there are 4 million cards issued worldwide and 20,000 accepting merchant locations in the United States. It is particularly useful in places where speed is important to customers and where cash has been the traditional means of payment. Besides sporting venues, the technology is well-suited for convenience stores - 7-Eleven has equipped all its U.S. stores with the technology - and for quick-service restaurants, gas stations, movie theaters, taxi and mass transit fares.

Visa Canada Association is a member of ACT Canada, please visit http://www.visa.ca.

10. SOUTH AFRICA'S EMV MIGRATION HITS FURTHER DELAYS
Source: I-Africa.com (02/24)

Under South Africa's EMV conversion, which is to mainstream this year, 16 million cardholders will receive new cards, while 130,000 POS terminals and back-end systems are to be upgraded. Bankers hope that card fraud, which exceeded R 100 million in 2005, will drop by up to 80 per cent once the more secure EMV chip-based cards are introduced. Until now, the banks have written off R 30 million to R 40 million in losses every year to card fraud, which was increasing by 10 per cent annually, but the national EMV migration has hit several stumbling blocks.

EMV cards were due to be issued in South Africa over 18 months ago, but a series of delays hit implementation deadlines through 2004 and 2005. As of February 2006, it seems another self-imposed deadline is to be missed as the banking industry has to resolve some technical issues. Industry-wide implementation was defined as a priority for South Africa's EMV steering committee but the industry's moves have been complicated by the twin facts of the banks' internal and card-issuing systems being at different stages, and the country having its own card message format.

11. SOUTH KOREA PLANS SMART CARD ID
Source: CardTechnology (02/23)

The South Korean government announced this month plans to issue a smart card ID to citizens starting in 2008. The card would replace a laminated plastic ID card now carried by an estimated 35 million South Korean citizens 18 and older. In announcing the plan, the Ministry of Government Administration and Home Affairs said the new card would be less susceptible to counterfeiting and identity theft and would contain information that could be used in commercial Internet transactions, such as online as banking and shopping. The government plans to phase in the card over three to five years, starting in 2008. That year, the government says it also plans to begin testing electronic voting, and that the new ID card will be used in the voting system. The chip card also will be used for identification at airport security and immigration checkpoints. It also will be tied into the national health insurance plan and to services for senior citizen and the disabled, and will replace various government applications that require residents to visit local offices for numerous redundant stamps and certificates.

12. APACS SEES WEB COMMERCE AS NEXT STEP FOR CHIP-AND-PIN
Source: CardTechnology (02/17)

APACS, the UK payments association, is exploring how to adapt the country's new "chip-and-PIN" payment system to prevent online credit card fraud, an APACS spokesperson tells Card Technology sister publication CardLine Europe. Wednesday marked the deadline by which card issuers and brick-and-mortar merchants were to have completed the transition to the new system, which uses smart cards that require the entry of a personal identification number at the time of purchase. Most physical merchants have upgraded their point-of-sale terminals to work with the new cards, and APACS says the chip-and-PIN cards have resulted in a significant drop in fraudulent transactions. However, the APACS spokesperson says, the new cards will not have an impact on Internet card fraud because online merchants have no way to read the chip. To prevent online fraud, the spokesperson says, APACS is looking into the use of handheld devices that could read the chip on the card and then generate a random, single-use password. A consumer would then enter that random number at the merchant's site to complete the transaction. According to the APACS spokesperson, using a random password is more secure than using the cardholder's PIN because the password would be "completely useless" should a criminal obtain the number illicitly. While APACS has yet to select a card reader, the spokesperson says the group eventually plans to have consumer trials of the technology. "Work on standards is done, but there's quite a lot of discussion around the next phase and how that'd work," the spokesperson says.

13. NEW SMART CARD ALLIANCE PAPER ADDRESSES THE BENEFITS OF SMART CARDS FOR HEALTHCARE APPLICATIONS
Source: MARKET WIRE (02/08)

A new white paper, Smart Card Applications in the U.S. Healthcare Industry, examines how smart card technology is being incorporated into new healthcare systems to protect and enable convenient access to patient data and support new applications that deliver clinical and administrative benefits.

"The use of smart cards in healthcare is gaining momentum. This white paper explains how its feature-rich, flexible platform provides a practical and portable way to enhance the security and confidentiality of patient information," said Randy Vanderhoof, executive director of the Alliance. "In the long run, the data carried by smart health cards can not only save lives, but can also save the healthcare industry billions of dollars."

The white paper describes the following benefits that smart cards provide in healthcare applications: Support privacy and security requirements mandated by HIPAA; Provide the secure carrier for portable medical records; Support new processes that can reduce administrative costs; Reduce healthcare fraud; Provide secure access to emergency medical information; Provide support for patient loyalty programs; Enable compliance with government initiatives and mandates.

The white paper, written for executives and managers, is available at no charge from the Smart Card Alliance web site.

The Smart Card Alliance is a member of ACT Canada and a founding member of ISCAN - the International Smart Card Associations Network. Please visit their web site at http://www.smartcardalliance.org.

14. PAYPASS LAUNCHED IN MALAYSIA
Source: CardTechnology (02/10)

PayPass chip cards that can handle both contactless and contact payments are being rolled out in Malaysia, MasterCard International has announced. The cards conform to the EMV standard. Consumers can use the contactless feature to make retail purchases without signing receipts if the purchases are valued below 110 Malaysian ringgits (24.7 euros). The contact feature would generally be used for larger purchases, a MasterCard spokesperson tells Card Technology sister publication CardLine Europe.

MasterCard is a member is ACT Canada, please visit http://www.mastercard.ca.

15. FOUR SWEDISH COUNTIES JOIN REGIONAL SMART CARD TRANSIT FARE COLLECTION SYSTEM
Source: Contactless News (02/15)

Cubic Transportation Systems has received contracts totaling approximately 73.3 million SEK or US $9 million from four additional counties in Southern Sweden to provide smart card fare collection systems that will link the counties to "Resekortet," the multi-modal smart card-based fare collection system that will connect rail and bus services throughout Southern Sweden.

Each of the counties will receive fare collection systems similar to Skane's, which will include software, a communications network, back office computer systems and equipment for processing fare collection on the buses and trains and at rail stations. The processing equipment comprises driver control units; smart card validators and ticket issuing modules for buses; and ticket vending machines, platform validators and handheld devices for rail.

All five counties will cooperate with the new contactless smart card fare system and will be able to provide complete interoperability within all the participating counties in Southern Sweden.

16. ADDITIONAL STORIES AVAILABLE IN ACT CANADA MEMBERS ONLY SECTION

These additional stories are available to ACT Canada members via the Members Only section of our web site. Click on the link below to access this section.
If you are a member of ACT Canada but do not have your login details please contact me - andrea@actcda.com.
http://www.actcda.com/members-only/members-only-news/

MULTOS SMART CARD OS GETS NEW OWNERS AND NEW MISSION

Holding company, StepNexus, readies the OS for broader application. The focus of the new company is the continued development of MULTOS, a multi-application, open source and high security OS for smart cards. MULTOS was initially conceived for Mondex…


CITIZENS FINANCIAL GROUP INTRODUCES MASTERCARD PAYPASS DEBIT CARDS

Citizens Financial Group announced it is providing Citizens Bank and Charter One Bank customers with MasterCard PayPass contactless payment technology on their debit cards...


JCB ANNOUNCES BULGARIA'S TRANSCARD TO ISSUE THE FIRST JCB SMART CARD IN EUROPE

JCB is pleased to announce that Transcard AD, Bulgaria 's largest credit card issuer and acquirer, will roll out the JCB branded TRANSCARD JCB card in March. This will mark the first time for a JCB card compliant with EMV to be issued in Europe…


CARD FEUD TROUBLES COMMUTERS (KOREA)

Many subway and bus users in Seoul pay fares using their credit cards, but the service may stop at any time due to a dispute between credit card companies and system providers over commission fees…

For more information, please contact Andrea McMullen at 1 905 426-6360 ext 124 or email andrea@actcda.com.

Please forward any comments, suggestions, questions or articles to andrea@actcda.com. Please note that articles contained in this newsletter have been edited for length, and are for information purposes only.