Stakeholders Driving Payment Evolution and Digital Identity

May 2006 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. ICC Solutions Assists With Development Of Requirements For Interac Test Tools
3. MasterCard Introduces New Authentication Products
4. Axalto To Deliver Biometric Smart Cards For Qatar's National ID
5. Giesecke & Devrient Offers Contactless Mini Cards Through Visa Smart Breakthrough
6. LaserCard Announces Order For Optical National ID Card For Middle Eastern Country
7. ACI Worldwide Announces Base24-Es For Faster Payments
8. Giesecke & Devrient Launches Mini-Size Antennas In Compliance With MasterCard PayPass Specs
9. European Commission Approves Merger Of Axalto-Gemplus
10.Canadian Contactless Firm Looks To UK
11. Bell ID & Aconite Deliver Joint EMV Solution To Major Saudi Arabian Bank
12. Axalto Announces Comprehensive Range Of PIV Smart ID Cards For U.S. Government Market
13. Datacard Debuts Advanced Issuance System For High-Security Passports
14. Giesecke & Devrient Develops Pioneering Passport Data Page Material
15. Gemplus Chosen For Australia's First MasterCard PayPass Pilot
16. Additional Stories Available In Members Only Section

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

GENERAL

Datacard Group ~ new member
Mint Inc ~ member since 2003
SCM Microsystems ~ member since 2004

UPCOMING EVENTS

ACT Canada presents Cardware 06

Toronto - EMV Optimization
June 13th at the Metro Toronto Convention Centre

Ottawa - Identity is Everything
June 15th at the Hellenic Centre

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (05/23)

Have you ever been busier?

I bet you said no. Not that long ago we worried about balancing our personal and professional lives, but now we're struggling just to balance our work lives. While you focus on the considerable amount work at hand, how do you protect your organization and your own future interests?

Studies show that there is a growing shortage of skilled resources in North America and that is already impacting our workloads. Back in 2003, we started to warn members that there would be a serious shortfall of trained staff to implement smart card projects and today the problem is already serious and costly. The short-term solution is to put in more hours and focus on timelines and deliverables as you are doing now, but that won't address your long term needs and may not bring the best results from the work you are currently doing.

If you are reading this, there is a significant chance that you are studying or working on a smart card project such as EMV or secure ID, or you have clients doing that. If that's the case, other organizations have already dealt with some of the challenges that are facing you. It is important that you take the time to learn what did and didn't work for them. Not everything will be the same in the Canadian market, so you might also need to enter into dialogues about procedures and policies, because your project is likely part of a larger or national initiative.

Taking this time when you are busy is a challenge, but here is why it is so important. In this market each of us needs to find ways to get as much done as possible and that means taking advantage of other people's experiences. We also need to ensure that we are considering future opportunities and keeping doors open so that we can exploit them to avoid costly re-issuance or infrastructure modifications. And as employers, we need to invest in our employees' professional development, not only because it will help with the current work, but also because it will help us retain them in a market where there just aren't enough people to go around.

Over the past six months, ACT Canada has worked with many members to build a program that balances time and information needs. The first part is Cardware 06, a 1-day conference with supplementary electronic presentations. The second is the extension of our web-ed program that will see expanded curriculum over the summer. Currently we are also investigating a credentialing program to help ensure that our members will have access to the trained resources needed to help them attain their goals.

In an emerging market, investing in information benefits everyone.

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.

2. ICC SOLUTIONS ASSISTS WITH DEVELOPMENT OF REQUIREMENTS FOR INTERAC TEST TOOLS
Source: ICC Solutions (05/19)

ICC Solutions Limited is pleased to announce that the company has been selected by Interac Association in Canada to assist with the development of requirements for test tools for the testing and certification of IDP (INTERAC Direct Payment) and SCD (Shared Cash Dispensing) terminal applications, and integrated circuit cards. Additionally, ICC Solutions shall assist with the further definition of testing and certification processes, based on the existing Interac Association "Chip Strategy for Testing and Certification".

The objective of this work is to ensure that Interac Association and its Members have clearly defined requirements for the testing and certification of terminal applications and integrated circuit cards for the INTERAC Shared Services in a chip environment.
The Interac selection decision was partly based on the wealth of experience accumulated by ICC Solutions in chip implementations globally, and because of their broad and intensive knowledge of EMV, specifically with regard to testing and certification activity.

ICC Solutions and Interac Association are members of ACT Canada and ICC Solutions is an exhibitor at Cardware 06 in Toronto; please visit http://www.iccsolutions.com & http://www.interac.org.

3. MASTERCARD INTRODUCES NEW AUTHENTICATION PRODUCTS
Source: ICMA Daily News (05/15)

MasterCard International introduced two new ways for consumers to authenticate themselves for online or mobile transactions. One is a variant of technology previously introduced in countries where banks are converting their credit and debit cards to smart cards that conform to the global EMV standard for payment chip cards. In those countries, consumers insert their smart cards into readers that generate a one-time code that is used to verify their identity at an online banking site or Web merchant. Since U.S. issuers are not moving to smart cards, MasterCard has developed a new "All-in-One" device that contains the EMV smart card chip and generates a unique code when the consumer enters a personal identification number, or PIN. The device, about the size of a car door-entry device and designed to fit on a keychain, is likely to cost about $5 to $7 in volume.

MasterCard also unveiled recently a service called MasterCard Mobile Authentication that lets a consumer download an authentication application to certain mobile phones or handheld computers, and then generate a one-time authentication code by entering a PIN. Cardinal Commerce supports the mobile authentication service, and MasterCard says it expects other suppliers will do so as well. KeyBank announced in a statement it has tested MasterCard Mobile Authentication and expects to offer it to its customers.

MasterCard Canada is a member of ACT Canada and an exhibitor at Cardware 06 in Toronto; please visit http://www.mastercard.ca.

4. AXALTO TO DELIVER BIOMETRIC SMART CARDS FOR NATIONAL ID PROJECT OF QATAR
Source: Axalto (05/17)

Axalto announced it will contribute to the Qatar national ID program with the delivery of fingerprint match-on cards, associated readers and services. Qatari citizens will use these high-end cards, combining a built-in biometrics feature, contact and contactless technologies as their national ID document as of the first quarter of 2007.

This smart card will serve as the official ID document for Qatari citizens above 16, as well as foreign residents. In addition to the personal data available in usual ID documents (such as name, birth date, address etc), the microprocessor will also store the person's fingerprint. The biometric data remains on the chip and never leaves the card even when the identity verification is being performed, respecting privacy of the cardholder.

Thanks to the security features embedded in the ID card, the cardholder will be able to access egovernment services and perform transactions in a simple and secure manner. Using an Axalto smart card reader connected to their home computer, citizens could use their smart ID card to declare a household employee, change of address, or obtain civil records (http://www.moi.gov.qa).

Moreover, the contactless technology built in the card together with the match-on card capability allows this ID card to be used as a travel document, increasing speed, convenience and security of identity verification at border crossing.

Axalto is a member of ACT Canada and an exhibitor at Cardware 06 Toronto & Ottawa; please visit http://www.axalto.com.

5. GIESECKE & DEVRIENT OFFERS CONTACTLESS MINI CARDS THROUGH VISA SMART BREAKTHROUGH
Source: Giesecke & Devrient (05/02)

G&D to provide the first commercially scalable alternative form factor to a traditional sized contactless card - a contactless mini card with a mini size antenna.

The launch of the Visa Contactless Mini Card is incorporated in the expanded Visa Smart Breakthrough program. Visa Smart Breakthrough is a global initiative to enhance the business case for chip technologies world-wide by making cards, terminals and personalization solutions more cost-effective to financial institutions, merchants and consumers.

Giesecke & Devrient and Visa Canada Association are members of ACT Canada and Giesecke & Devrient is an exhibitor at Cardware 06 Toronto & Ottawa; please visit http://www.gi-de.com & http://www.visa.ca.

6. LASERCARD ANNOUNCES ORDER FOR OPTICAL MEMORY-BASED NATIONAL ID CARD PROJECT FOR MIDDLE EASTERN COUNTRY
Source: LaserCard (05/17)

LaserCard Corporation announced receipt of a $1.3 million purchase order under the approximately $11 million subcontract for the LaserCard optical memory-based national ID card project for a Middle Eastern country. The purchase order is the second of ten purchase orders expected under the recently received $11 million contract for both the supply of personalized secure national ID cards and the supply, installation and support of associated card personalization equipment, consumables and software.

LaserCard is a member of ACT Canada and an exhibitor at Cardware 06 in Ottawa; please visit http://www.lasercard.com.

7. ACI WORLDWIDE ANNOUNCES BASE24-ES FOR FASTER PAYMENTS
Source: ACI Worldwide (05/17)

ACI Worldwide announced the development of an enhanced version of its BASE24-es software for banks to meet new Faster Payments requirements in the UK. The solution will provide banks and building societies with a flexible, robust and feature-rich gateway for linking to the central Faster Payments infrastructure being built by LINK and Voca. The gateway will ease the implementation of Faster Payments by helping banks integrate with their existing payment systems and thereby reduce the overall cost and effort to participate.

The Faster Payments initiative is aimed at reducing clearing times on inter-bank electronic payments following telephone or internet instructions from customers, as well as standing orders. This will be achieved by the implementation of a new payment scheme based on a near real-time processing model. The gateway can be used with further products from the ACI Payments Framework.

ACI Worldwide is a member of ACT Canada; please visit http://www.aciworldwide.com.

8. GIESECKE & DEVRIENT LAUNCHES MINI-SIZE ANTENNAS IN COMPLIANCE WITH MASTERCARD PAYPASS SPECS
Source: ICMA Daily News (05/17)

Giesecke & Devrient (G&D) recently began offering MasterCard issuers conveniently-sized contactless payment cards and devices in smaller formats to be attached to key rings. G&D has developed an innovative Contactless Product Suite, which makes small-scale antennas available for Radio Frequency (RF) transmission on the basis of new antenna technology. The smaller MasterCard PayPass form factor will be issued first to customers in North America.

G&D's new antennas allow contactless payment devices to be manufactured in all sorts of new shapes and sizes, as demonstrated by the key fob now available for MasterCard issuers. Despite their reduced size, the devices meet the PayPass-ISO/IEC 14443 specifications and achieve excellent radio frequency performance even with the small antennas.

Giesecke & Devrient and MasterCard Canada are members of ACT Canada and exhibitors at Cardware 06; please visit http://www.gi-de.com & http://www.mastercard.ca.

9. EUROPEAN COMMISSION APPROVES MERGER OF AXALTO-GEMPLUS
Source: Axalto (05/19)

Axalto and Gemplus announced that the European Commission has cleared the proposed Axalto and Gemplus combination under the EU merger regulation, with specific undertakings. This step constitutes satisfaction of an important condition precedent to the proposed combination of the companies anticipated to occur upon the parties' satisfying the remaining conditions under their contractual agreements.

Olivier Piou, CEO of Axalto, comments: "We are extremely pleased to see that the very comprehensive investigation conducted by the European authorities has led the Commission to approve the merger, and to conclude that the Axalto-Gemplus transaction would not harm the competitive environment. We are all really eager to start operating as the new company, Gemalto, as soon as the remaining conditions and practical matters per the contract have been satisfied".

Axalto and Gemplus are members of ACT Canada and Axalto is an exhibitor at Cardware 06 Toronto & Ottawa; please visit http://www.axalto.com & http://www.gemplus.com.

10. CANADIAN CONTACTLESS FIRM LOOKS TO UK
Source: CardTechnology (05/08)

Dexit Inc is exploring ways to introduce its technology to the UK market, David Campbell, the company's chief financial officer, tells Card Technology sister publication CardLine Europe. The Dexit system allows users to make purchases by tapping a key fob against a reader, with the price being deducted from a prepaid account that consumers can fund through a credit card, by direct debit from a bank account, or at a participating merchant. Campbell says that Dexit last year submitted a bid to Transport for London, the UK capital's public-transit operator, as part of TfL's search for partners to add retail payment functionality to its Oyster contactless fare-payment card. According to Campbell, Dexit was eliminated from the running last October, and TfL itself announced last week that it would shelve its electronic-purse plans because they were not economically viable.

Campbell says Dexit's participation in the TfL bid has opened up some possibilities for future business. "Through that process, we made a number of contacts in the UK market, and some of those people we're still in discussions with about projects in the UK," he says. Dexit, which has about 50,000 registered users and 450 participating merchants in the greater Toronto area, is also exploring ways to introduce its service across Canada, Campbell says. Campbell says the firm has sought to add large retailers to its acceptance network in preparation for a nationwide launch. "We've not aggressively expanded the service in the last year or so," he says. "It's our view that the focus needs to be on securing major merchants because then they're a catalyst for other major merchants and small and medium-sized merchants," he says.

Dexit is a member of ACT Canada; please visit http://www.dexit.com.

11. BELL ID & ACONITE DELIVER JOINT EMV SOLUTION TO MAJOR SAUDI ARABIAN BANK
Source: Aconite (05/17)

Bell ID and Aconite announced they have joined forces to provide a full EMV migration solution to one of the top banks in Saudi Arabia.

The solution completes the link between traditional card management systems and authorisation hosts, facilitating the issuance of millions of EMV-compliant MULTOS cards and providing a platform for post-issuance EMV scripting as well as the issuance and management of multi-application smart cards.

The joint solution combines Bell ID's ANDiS4EMV Card, Application and Key Management Systems with Aconite's EMV Transaction Enabler. Aconite's EMV Script Processor (ESP) completes the offering, allowing the generation, management and delivery of scripts to update cards dynamically after issuance and manage offline risk securely.

This solution has been designed to support the recent Saudi Payment Network (SPAN 2) upgrade, meeting the requirements for Dynamic Data Authentication (DDA), Combined Data Authentication (CDA) and offline authorisation limits.

Aconite is a member of ACT Canada; please visit http://www.aconite.net.

12. AXALTO ANNOUNCES COMPREHENSIVE RANGE OF PIV SMART ID CARDS FOR U.S. FEDERAL GOV'T MARKET
Source: Axalto (05/02)

Axalto announced its comprehensive range of dual interface Personal Identification Verification (PIV) cards. The latest Axalto PIV technology fully addresses the requirements mandated by Homeland Presidential Security Directive 12 for U.S. federal government employee identity cards, as defined by Federal Information Processing Standard 201 (FIPS 201).

Axalto's latest dual interface PIV smart cards combine in one smart card chip a secure contact interface along with a secure contactless radio frequency interface. These two interfaces provide a choice in the way a credential can be used, giving agencies greater flexibility to integrate with both physical and logical access systems. Axalto's dual interface technology also simplifies card issuance and card management processes by maintaining only one credential in the smart card chip.

Axalto's PIV implementation meets all of the requirements of the recently solidified standards, and incorporates the latest security advances in microprocessor card technology. The high security printing techniques required in FIPS 201 are also available from Axalto.

Axalto is a member of ACT Canada and an exhibitor at Cardware 06 Toronto & Ottawa; please visit http://www.axalto.com.

13. DATACARD DEBUTS ADVANCED ISSUANCE SYSTEM FOR HIGH-SECURITY PASSPORTS
Source: Datacard (05/17)

Datacard Group introduced the Datacard PB6500 passport issuance sytem. This innovative and modular solution helps governments elevate passport security to unprecedented heights in an effort to help prevent fraud and identity theft.

The PB6500 system automates inline high-volume passport production. It can apply level 1, 2 and 3 security features, and offers a complete line of passport personalization technologies. The system also includes a variety of system-level security features, including secure login, data encryption and biometric authentication support.

A flexible, modular design allows end-users to start with the most cost-effective configuration for a current issuance program, and then incorporate new technologies as they become available. Modules currently available for the PB6500 system include booklet leafing, contactless chip personalization, laser engraving, color inkjet printing, vision registration, security lamination, number perforation, quality assurance and label affixing.

Datacard Group is a member of ACT Canada; please visit http://www.datacard.com.

14. GIESECKE & DEVRIENT DEVELOPS PIONEERING PASSPORT DATA PAGE MATERIAL
Source: SecureID News (05/17)

Giesecke & Devrient has unveiled a new passport data page material that is flexible and long-lasting, providing an alternative to the polycarbonate materials currently in use. The laser-engravable material is not only capable of carrying the security features already established, but it also opens up new doors for protecting passports. For example, laser engraving can be used to apply individual information that can be verified when viewed from the proper angle even without the aid of special equipment.

Giesecke & Devrient is a member of ACT Canada and an exhibitor at Cardware 06 Toronto & Ottawa; please visit http://www.gi-de.com.

15. GEMPLUS CHOSEN FOR AUSTRALIA'S FIRST MASTERCARD PAYPASS PILOT
Source: Gemplus (05/18)

Gemplus announces its involvement in Australia's first MasterCard PayPass pilot program, where Commonwealth Bank of Australia's (CBA) cardholders will simply place their card in front of the terminal to make a payment.

The six-month trial will be rolled out in New South Wales, with the first phase involving 33,000 CBA cardholders who will be able to use their MasterCard PayPass cards at more than 150 participating merchants. Shops include fast food restaurants and convenience stores for payments under A$35. Cardholders will not need to enter a PIN or sign a receipt, resulting in faster transaction times and therefore reducing queuing time for customers at the store and improving the service.

Gemplus is a member of ACT Canada; please visit http://www.gemplus.com.

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/

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By 2013, the global payments industry will be worth USD 703 billion, up from USD 467 billion in 2003…For that reason, banks wanting to preserve their payments businesses must address global and regional dynamics that threaten their revenues and increase operating costs…

BANKS COULD MISS OUT ON OYSTER E-MONEY PROJECT

Transport for London (TfL) hit a perennial issue before shelving its plans to add an e-wallet to its prepaid Oyster fare card, namely the question of who should pay for the new retail infrastructure…

AUSTRALIA'S MEDICARE CARD TO RUN ON POS SYSTEM

Australia's national EFTPOS network is to have a major role in the management of almost AD 8 billion worth of Medicare rebates directly into consumers' accounts from government reserves…

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.