Engaging, Enabling and Evolving Commerce in Canada since 1989

November 2006 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. Members of The Canadian Payment Industry Announce Chip Technology Trial
3. CUETS teams with Bell ID & Aconite for switch to EMV
4. RBC Contracts ACI for Chip Migration
5. Gemalto Provides 1st Visa Java EMV Cards in Hong Kong
6. Tap & Go at Rabba Fine Foods with MasterCard PayPass
7. Collis Approved As Interac Test Tool Vendor
8. Oberthur's Innovative VersaFOB Certified as Approved MasterCard PayPass 3D Fob
9. NXP Helps Transform France's Health Care System
10. Visa UK Plans Contactless Rollout in 2007
11. MasterCard Leads Nation's 1st Market Trial of Personalized NFC-Enabled Mobile Phones
12. Gemalto Introduces World's 1st Banking Card Meeting Visa Global Contactless Specification
13. Kreditkort Iceland & StepNexus Enable MULTOS Cardholders to Download Two Factor Authentication Application
14. Cardis Low-Value Payment Application Available On Keycorp MULTOS & MULTOS Step/One Platforms
15. PayPass Hits Mexico
16. Additional Stories Available In Members Only Section

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

Giesecke & Devrient ~ member since 1990

GENERAL

Scotiabank ~ member since 1997

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (11/30)

Out with the Old, In with the New

This is the last e-news of 2006, so let's review the year's highlights and gaze into the crystal chip for 2007.

EMV and e-Passports dominated the chip news, and national ID cards the optical news, in 2006. In Canada the financial services sector continues to work toward issuing chip cards in next year, while determining ways to optimize their investment. In 2007, there will be a greater focus on value added EMV applications and activities in the second half as many key players participate in the Kitchener/Waterloo technology trial. From a strategic perspective, the next 18 months will be the most interesting we have seen related to chip in Canada. The emerging national chip infrastructure will be the foundation for a more competitive marketplace related to payment cards.

On the government side, the United States announced controversial plans to use long-range RFID technology for cross border (Canada, USA and Mexico) identification. Now in the public consultation phase, it remains to be seen how privacy and security factions will react. Assurances that all personal data will be stored on a central database would be better received if network and data access were secured through the use of multi-factor authentication that includes smart cards.

Locally, the GTA fare project continues to progress and 2007 will see the launch of this very important project.

We hope that 2007 will bring a recognition by all governments of the compelling need to upgrade the security of identity documents, as well as all cards that link citizens to government related programs. This has already started with e-Passports and Canadian Permanent Resident cards, but birth certificates, driver's licenses, health cards and many others can no longer use technology that is easily duplicated or altered.

Kudos to the financial sector for leading the way!

We hope that in 2007 all companies recognize the need to upgrade their network and data access security to meet the growing need to protect consumer and corporate information. Again, multi-factor, chip card solutions are needed.

As a last note, please mark June 21st on your calendar for Cardware 07 in Ottawa and June 25th for Toronto. We will focus on the new opportunities and issues of the Canadian market.

We wish you the very best as we all go into this new year. Thank you for all your interest in ACT Canada and our market place and your support.

2. MEMBERS OF THE CANADIAN PAYMENT INDUSTRY ANNOUNCE CHIP TECHNOLOGY TRIAL
Source: Canada Newswire (11/29)

Members of the payment card industry - Interac Association, MasterCard Canada, Visa Canada Association, and many of their respective card issuers and processors - announced their commitment to conduct a chip technology trial in Kitchener-Waterloo, Ontario. The trial will allow participants to test the infrastructure and ensure interoperability of systems and devices in a controlled manner prior to each participant's national roll-out plan.

The first chip transactions (ed: of this trial) will occur in the autumn of 2007, with card issuance and device deployment increasing over the months following, reaching a sufficient volume for research by March 2008. The migration to chip card technology represents a significant change in the Canadian payments landscape and this multi-participant trial is an important step in ensuring a smooth transition for all participants in the electronic payments system.

Interac Association, MasterCard Canada and Visa Canada Association are members of ACT Canada; please visit http://www.interac.org; http://www.mastercard.ca & http://www.visa.ca.

3. CUETS TEAMS WITH BELL ID & ACONITE FOR SWITCH TO EMV
Source: Finextra (11/06)

A national supplier of advanced payment systems and services to credit unions, caisses populaires, cardholders, merchants and clients in Canada, CUETS is working with Bell ID and Aconite to implement EMV technology to its existing portfolio of card services.

As part of the relationship with CUETS, Aconite is delivering its EMV Script Processor (ESP) solution, an easy-to-deploy solution that enables the generation and delivery of updates or 'scripts' to an EMV card base. Aconite's ESP solution was chosen in partnership with Bell ID, and is in addition to a current consulting engagement between Aconite and CUETS that began in the summer of 2006 to support the organization in their migration to EMV - incorporating an initial EMV strategy through training, testing, implementation and exploitation of their smart card program going forward.

In line with CUETS' commitment to continually provide its customers with new and cutting edge payment solutions, ESP will enable CUETS to deliver customer service scripts to manage the use of the chip card after it is issued. The solution also provides a flexible platform for the introduction of innovative card products in the future.

The program will enable CUETS' customers, primarily Canadian credit unions and caisses populaires, to quickly and easily migrate to EMV card issuing, avoiding the costly replacement of legacy systems and allowing them to be amongst the first financial institutions in Canada to migrate to EMV. It will also help CUETS maximize their EMV investment at each stage of the migration life cycle.

Aconite and CUETS are members of ACT Canada; please visit http://www.aconite.net & http://www.cuets.ca.

4. RBC CONTRACTS ACI FOR CHIP MIGRATION
Source: Business Wire (11/17)

Royal Bank of Canada is using software from ACI Worldwide to migrate its credit and debit cards to EMV.

RBC will use ACI's Smart Chip Manager software for its chip card migration program, ACI says. Smart Chip Manager is a card management system specifically designed for EMV cards, enabling issuers to add applications such as loyalty and rewards to a chip card.

ACI says that RBC will be conducting internal chip card trials in late 2007 and that it will use Smart Chip Manager to develop a number of "innovative" card products. However, RBC declined to comment on its EMV rollout plans.

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

5. GEMALTO PROVIDES 1st VISA JAVA EMV CARDS IN HONG KONG
Source: ICMA Daily News (11/17)

Gemalto announced that it has delivered the first Visa Java EMV cards to DBS Bank, an Asia banking specialist and one of the leading card issuers in Hong Kong. This project marks a significant milestone for smart card development in Hong Kong's banking industry.

In order to meet the latest Visa's security requirements, DBS Bank chose to partner with Gemalto in implementing its ComPass Visa card program. The card is highly secure and has an open platform operating system that enables post issuance application downloads and loyalty functions. Additionally, the card provides a unique attraction for users by featuring a translucent card body. With these Visa Java EMV cards issued by DBS Bank currently in circulation, this migration to the EMV standards will kick off the largest exercise of its kind in Hong Kong market.

Gemalto and Visa Canada Association are members of ACT Canada; please visit http://www.gemalto.com & http://www.visa.ca.

6. TAP & GO AT RABBA FINE FOODS WITH MASTERCARD PAYPASS
Source: MasterCard (11/27)

MasterCard Worldwide announced that Rabba Fine Foods, Your Neighbourhood Marketplace, will begin accepting MasterCard PayPass at its 30 stores across the Greater Toronto Area. Rabba customers will be able to purchase great food and a host of other items by simply tapping their PayPass-enabled MasterCard card on a specially equipped payment terminal. Contactless payment technology, powered by MasterCard PayPass, provides consumers with a quick and convenient alternative to cash for their everyday small purchases, without the hassle of fumbling for cash or handing a card over to the cashier.

"MasterCard PayPass is quickly becoming a favourite among merchants because contactless payments are simpler and faster than cash, thereby speeding consumers through the payment process," said Nagesh Devata, VP, Acceptance Development and Product Solutions, MasterCard Canada. "Our research shows that PayPass cardholders display progressive loyalty to PayPass merchants and use their PayPass-enabled cards more often than traditional payment cards."

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

7. COLLIS APPROVED AS INTERAC TEST TOOL VENDOR
Source: Collis (11/01)

Collis is pleased to announce that Interac Association in Canada has formally approved Collis as a Test Tool Vendor for the Interac Association ICC Applications. Collis' INTERAC ICC Functional Testing Tool (INTERAC ICC FTT) enables debit card issuers to fully self-certify with Interac Association.

Collis' INTERAC ICC FTT is fully automated and allows users to test ICC application's functionality. Collis' testing tool produces an in-depth report with either a 'passed' or a 'failed' verdict. A report with a 'failed' verdict contains the errors in detail, enabling the Interac Association member to correct the errors in the chip.

Collis and Interac Association are members of ACT Canada; please visit http://www.collis.nl & http://www.interac.org.

8. OBERTHUR'S INNOVATIVE VERSAFOB CERTIFIED AS AN APPROVED MASTERCARD PAYPASS 3D FOB
Source: ICMA Daily News (11/03)

The smallest-ever card-based contactless payment fob, called VersaFOB, was certified by MasterCard Worldwide as an approved PayPass product, announced Oberthur Card Systems. This new contactless payment form factor is just 28.5 mm by 23.6 mm (1.125" x 0.93") in size. The sub-card is snapped out of a full size card at the end of the production process and then inserted into a key-chain casing.

Since the VersaFOB casings do not contain any of the electronics, they can be inexpensively customized to allow issuers to differentiate their fobs from competitors' products. This specific antenna was designed extremely small so it could easily be used in larger VersaFOBs - either larger sub-cards or larger casings.

Oberthur Card Systems' VersaFOB has several advantages:

  • The sub-card is secure inside the casing, giving it a robust connection to the keychain and minimizing instances of breakage and loss;
  • Three-dimensional devices cannot be manufactured or personalized using traditional equipment and processes, making them more expensive to produce and slowing time to market.

Oberthur Card Systems and MasterCard Canada are members of ACT Canada; please visit http://www.mastercard.ca & http://www.oberthurusa.com.

9. NXP SEMINCONDUCTORS HELPS TRANSFORM FRANCE'S HEALTH CARE SYSTEM WITH SMART CARD TECHNOLOGY
Source: SecureIDNews (11/08)

NXP Semiconductors smart card chip technology has been selected for use in the new French health card, Sesam-Vitale2. The contact card allows holders to sign invoices and to have secure access to their personal medical files electronically. Healthcare and insurance institutions can also benefit from the card's increased security features and memory, by reducing fraud and increasing the speed of transactions.

France has successfully used the Sesam-Vitale health card since 1998, however the first generation cards held no photographic identification and stored only a limited amount of data. The new version, Sesam-Vitale2, includes a photograph and a much greater capacity to store information such as complementary health insurance details. In addition, with the increased storage capacity, administrative processes can also be performed faster.

The latest identity protection technology, based on IAS (Identification, Authentification and Signature) application software, is used in Sesam-Vitale2. The new card contains Common Criteria EAL5+ security certified NXP SmartMX chip technology. The 36K EEPROM public key infrastructure contact microcontroller offers highly advanced encryption hardware and physical hacking counter measures. The chip's software is using NXP's advanced common criteria security certified cryptographic software library.

Sesam-Vitale is a smart card-based infrastructure incorporating many components, including a telecoms network and a message service, 223,000 health care professionals, 230 health software applications, 210,000 card readers, 25 servers handling the flows and 23,000 terminals for card updating, this enables insurers nationwide to access personal information and expedite claims as quickly as possible.

NXP is a member of ACT Canada; please visit http://www.nxp.com.

10. VISA UK PLANS CONTACTLESS ROLLOUT IN 2007
Source: epaynews (11/24)

Visa UK says its member banks have agreed to roll out contactless cards across Britain, by the end of next year, starting in London.

The rollout will enable cardholders to purchase low-value everyday items, such as their morning coffee and newspapers, by waving a contactless card over a card reader in participating stores, Visa says. The contactless cards will contain EMV chip-and-PIN technology as well as an RFID contactless chip.

Cardholders will not be required to enter their PIN for contactless transactions that are under a preset amount. However, if the number of contactless transactions carried out by a cardholder exceeds the card's daily floor limit, the card will need to be swiped in a reader and the PIN entered.

Visa and its UK members are currently holding discussions with retailers to win their support in advance of the contactless rollout. Further details of the launch plans are expected to be available by March 2007, according to Visa.

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

11. MASTERCARD LEADS NATION'S FIRST MARKET TRIAL OF PERSONALIZED NFC-ENABLED MOBILE PHONES FOR PAYMENT
Source: Giesecke & Devrient (11/02)

MasterCard Worldwide announced that it has brought the promise of mass market availability of "Tap & Go" payments via mobile phones one giant step closer to reality. In partnership with Nokia and 7-Eleven, Inc., MasterCard is now conducting a consumer trial in Dallas, Texas, of Near Field Communications (NFC)-enabled mobile phones with MasterCard PayPass capability.

Up to 500 participants from the 7-Eleven Speak Out wireless program are getting NFC-enabled Nokia 3220 mobile phones and instructions on how to wirelessly enhance them with MasterCard PayPass payment functionality, via Giesecke & Devrient (G&D)'s new secure chip management solution. Once these simple steps have been taken, participants will then be able to use the phones to make purchases at any of the 32,000 merchant locations worldwide that accept MasterCard PayPass. The trial will run for approximately six months.

Consumers who join the trial will be furnished with an eFinity prepaid account that can be accessed either by a PayPass card, or the PayPass phone. Wireless service and network access will be provided by 7-Eleven, through its prepaid Speak Out wireless program.

How Secure Chip Management Works
To enhance an NFC-capable phone with MasterCard PayPass, consumers make a one-time request to their bank to register for the service. Data is sent by G&D's secure chip management platform over the carrier network. It automatically loads, activates and personalizes the PayPass payment application inside the mobile phone's built-in "secure area." Secure chip management allows flexible and individual control of the payment application in the phone's secure area. The wallet application on these phones can also be password protected so that a lost or stolen handset cannot be used to make payments.

Once the phone becomes PayPass-enabled, it can be used to make purchases at any of the approximately 32,000 merchant locations around the world that accept PayPass, including 7-Eleven stores, McDonald's, CVS, Duane Reade, Sheetz, and Regal Entertainment Group. PayPass is now accepted in many Major League Baseball and National Football League stadiums.

This is all made possible via NFC technology, a feature built into next-generation mobile phones such as the NFC-enabled Nokia 3220. NFC is a very short-range proximity technology that uses RF to enable secure, contactless communication between two devices. Contactless payment is only one of the many data-transfer applications that NFC enables, which makes it an attractive technology for carriers looking to increase handset utility for consumers.

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

12. GEMALTO INTRODUCES WORLD'S 1st BANKING CARD MEETING VISA GLOBAL CONTACTLESS SPECIFICATION
Source: ICMA Daily News (11/07)

Gemalto launched an innovative banking microprocessor card to perform multiple types of Visa payments: contact EMV (Europay MasterCard Visa), EMV-based contactless and magnetic stripe data contactless. The Gemalto card is the first contactless product that meets Visa's global contactless specification for interoperability and will be available in mass volumes to major financial institutions starting January 2007.

This new card from Gemalto can also host additional applications, such as transportation, access control and loyalty, allowing banks to advance a wide range of valuable services to their customers. For example, Visa issuers will be able to deliver co-branded applications in cooperation with transit operators and dynamically add new services such as loyalty schemes.

"The Gemalto product is the first card to be developed to the new global specification and represents important progress in bringing enhanced contactless programs to market," said Stephanie Ericksen, VP of Product and Technology Integration, Visa International. "In addition to the test tools and facilities, documentation and other resources now available, the Gemalto card enables issuers to develop new globally interoperable contactless payment programs with enhanced security and improved performance for faster, safer transaction processing."

Gemalto and Visa Canada Association are members of ACT Canada; please visit http://www.gemalto.com & http://www.visa.ca.

13. KREDITKORT ICELAND & STEPNEXUS ENABLE MULTOS CARDHOLDERS TO DOWNLOAD TWO FACTOR AUTHENTICATION APPLICATION
Source: StepNexus (11/06)

Kreditkort Iceland, the provider of MasterCard Debit and Credit services to Icelandic banks, announced the commencement of Europe's first commercial post-issuance provision of enhanced security. With more than 70,000 cards already in circulation, this will enable MasterCard cardholders the ability to easily upgrade their existing EMV card with two-factor Chip Authentication Programme (CAP), which provides PIN-based verification of cardholders conducting online transactions through the use of a card reader.

This announcement brings re-assurance to the banking industry where the current rate of home internet users doing online banking remains at 50%, with security the main concern of users according to the British Computer Society. This new service will enable additional protection without having to issue a new card. By utilising the online application generation service of StepNexus, Icelandic MasterCard cardholders are able to drop-in to the bank branch, have their card loaded with CAP, pick-up a two-factor card reader and receive a brief lesson in using the card and reader for eBanking, all within five minutes. A phased offering from Kreditkort will see cardholders immediately offered a drop-in service followed up in 2007 with the ability to upgrade cards at ATMs.

MasterCard Canada and StepNexus are members of ACT Canada; please visit http://www.mastercard.ca & http://www.stepnexus.com.

14. CARDIS LOW-VALUE PAYMENT APPLICATION NOW AVAILABLE ON KEYCORP MULTOS & MULTOS STEP/ONE PLATFORMS
Source: Keycorp (11/06)

Cardis and Keycorp announced that Cardis' patented low value payment application is now available on Keycorp MULTOS and MULTOS step/one platforms.

Cardis' unique technology aggregates low value cash purchases into larger value EMV debit/credit card transactions, which can be cost effectively processed through the existing infrastructure. It allows a contact or contactless EMV payment system to replace cash transactions in a broad spectrum of merchant segments. Small payments are processed offline, without PIN, offering speed and convenience to consumers and retailers.

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

15. PAYPASS HITS MEXICO
Source: ContactlessNews (11/13)

CPI Card Group announced it has partnered with Keycorp to manufacture MasterCard's PayPass(tm) contactless cards for Banamex Financial Group. The issued cards will be introduced into McDonald's fast food outlets throughout Monterrey, Mexico. This joint effort will mark the first PayPass program launched in Latin America and will put Banamex in the lead of contactless card issuers in Mexico.

The contactless card, manufactured by CPI, will use utilize the dual interface chip with the MULTOS operating system developed by Keycorp and will be the first PayPass EMV card issued in Latin America.

Keycorp and MasterCard Canada are members of ACT Canada; please visit http://www.keycorp.net & http://www.mastercard.ca.

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/

CANADA'S NEW GOVERNMENT PROPOSES TO BOOST AIRPORT SECURITY WITH BIOMETRIC TECHNOLOGY

The Minister of Transport, Infrastructure & Communities, announced proposed amendments to support the implementation of the new Restricted Area Identity Card. Through the use of biometrics, the card will enhance the restricted area pass system currently in place at Canada's twenty-nine major airports…

SMART CARDS WIN SOME, LOSE ONE, IN U.S. "HSPD 12 IS NOT A NATIONAL ID, BUT IT DOES SOMETHING NEVER BEFORE DONE IN THIS COUNTRY."

New identification projects moving forward in the United States could put smart card IDs in the hands of tens of millions…

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.