Stakeholders Driving Payment Evolution and Digital Identity

June 2007 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. McDonald's Canada Announces Plans To Accept MasterCard PayPass & Chip Cards
3. TD Merchant Services Launches Canada's 1st "Chip-Ready" Integrated POS Solution
4. Toronto To Use Contactless Public Transit Ticketing
5. Canadian-Based Aldergrove Credit Union Selects Open Solutions' Technology Platform
6. Cardware 07 Review
7. Gemalto Selected To Provide Citibank Taiwan With EMV Turnkey Solution
8. Faster Payments To Thousands Of New York Taxis Coming
9. IT Security Solutions From Giesecke & Devrient Successfully Complete Windows Smart Card Framework Certification Program Pilot For Windows Vista
10. Gemalto Delivers 1st Smart Card Driving License Program In Mexico
11. FIME Continues Its Internationalization Into North America
12. WMATA Implements Base24-eps To Enhance Card Purchase Processing
13. EDS Launches Mid-Range Card Platform In Brazil
14. Smart Card Reader From SCM Microsystems Receives Qualification For Use In U.S. Homeland Security Program
15. Vodafone Names Giesecke & Devrient "Supplier Of The Year"
16. FINO Adopts Gemalto Smartcards To Accelerate Microbanking Deployment In India
17. Additional Stories Available In Members Only Section

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

EWA-Canada ~ member since 2004

GENERAL

Davis + Henderson ~ member since 2006
Deloitte Inc. ~new member

GOVERNMENT

Canada Post ~ new member

ASSOCIATE

Lifecycle Integrity ~ member since 2005

UPCOMING EVENTS

World eID
Sept.19 - 21, 2007
Sophia Antipolis, French Riviera
http://www.strategiestm.com/events/se/index.htm
ACT Canada members receive 25% delegate discount (including early-bird & renewal rates). Contact andrea@actcda.com for more details.

Smartcards in Transport
October 1 & 2, 2007
Paris, France
http://www.groupeactis.com/rubrique.php3?id_rubrique=48

Smart Card Alliance Annual Conference
October 8 - 11, 2007
Boston, MA, USA
http://www.smartcardalliance.org

Cartes & IT Security
November 13 - 15, 2007
Paris, France
http://www.cartes.com

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (06/28)

We are all too busy.

Sunday night, as I finished the last of the preparations for Cardware 07 EMV, I did a few google searches, because the Internet has become an important source of information. Unfortunately, the quantity is overwhelming. For example, the following number of sites came up for:
EMV: 5,420,000, EMV in Canada: 231,000, Biometrics: 7,410,000, Biometrics in Canada: 1,090,000, Smart Cards in Canada: 4,800,000 and Smart Cards: 46,300,000

Who has the time to look at more than the top ten or twenty? Then you have to determine whether each site reflects up to date or even accurate information. I could happily spend most of every day doing Internet research, but time is a luxury. In fact, when I do give in to my desire to check something out on the net, I can barely control my need to check out just a few more sites to make sure that they don't have something different to say from the first 20. Suddenly hours have disappeared.

I've found very valuable information on the Internet, but not knowledge and not insights into this market. As I look back across a long career I realize that my greatest growth and best accomplishments resulted from insights provided by other people. Sometimes they come from a conversation with a colleague, or in a meeting. The more people gathered together to discuss a common interest, the greater the likelihood you will gain insight. And when you open your world to new people who share your interests, you stand an even greater chance to learn from them.

We are all busy, but we cannot afford to waste opportunities to expand our circle of knowledge. Seek out experts, talk with people who you normally don't meet with, discuss new ideas. You will be surprised at how refreshed you can feel and how much you can learn in a single day. This is why good conferences with programs built to provide insight into your market are valuable.

2. MCDONALD'S CANADA ANNOUNCES PLANS TO ACCEPT MASTERCARD PAYPASS & CHIP CARDS
Source: Canada Newswire (06/25)

McDonald's Restaurants of Canada announced plans to accept two new payment options that will give its customers a convenient alternative to cash. McDonald's will begin installing MasterCard's PayPass readers and chip card terminals in some of its 1,400 restaurants across Canada as early as 2008.

"We're excited about our plans to further enhance the customer experience through these new payment options," said Laurie Laykish, Senior Vice-President Marketing & Strategic Planning, McDonald's Restaurants of Canada. "We are always listening to our customers and responding with new innovations to meet the needs of their on-the-go lifestyles, whether it be with drive-thrus, menu choices or, in this case, more convenient payment options."

"We are pleased to be working with McDonald's to provide their customers with the tap and go convenience of MasterCard(R) PayPass(TM)," said Kevin Stanton, President of MasterCard Canada.

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

3. TD MERCHANT SERVICES LAUNCHES CANADA'S FIRST "CHIP-READY" INTEGRATED POS SOLUTION
Source: Canada Newswire (06/27)

TD Merchant Services announced the availability of Canada's first "chip-ready" integrated point-of-sale (POS) solution designed for businesses preparing to upgrade their infrastructures to accept chip-based debit and credit cards.

Merchant Connect EMV is a software interface designed by Tender Retail that allows businesses to connect their POS systems with their payment processor; it also ensures merchants meet the precise requirements of EMV, the global technology standard for chip-based debit and credit cards to replace existing magnetic stripe cards. TD Merchant Services is the first payment processor in Canada to certify Tender Retail's Merchant Connect EMV.

"We're working hard to take care of tomorrow's chip requirements today," said Jeff van Duynhoven, VP, TD Merchant Services. "As the payments industry transitions to chip technology, we think merchants will come to appreciate our chip knowledge and expertise. We're pleased to partner with Tender Retail to become the first in Canada to offer a chip-ready integrated solution for the point-of-sale."

TD Bank Financial Group is a member of ACT Canada; please visit http://www.td.com.

4. TORONTO TO USE CONTACTLESS PUBLIC TRANSIT TICKETING
Source: Contactless News (06/25)

Commuters will soon be able to tap onto transit with the new Presto card - the first regional fare card for public transit in Canada. Beginning this July, Presto is being introduced on a limited basis in the City of Mississauga. The Presto card will help create a seamless transit network, making it easier for people to take all public transit, from train to bus, and also the subway. Presto complements the McGunity government's recently announced MoveOntario 2020 multi-year $17.5 billion rapid transit action plan for the Greater Toronto Area.

"Presto is a smart card that will revolutionize public transit," said Cansfield. "When the system is fully implemented, commuters will be able to replace tickets, transfers and passes with the Presto card on nine transit systems across the GTA, from Hamilton to Oshawa."

Beginning this July, Presto is being introduced on a limited basis in the City of Mississauga for regular GO Transit riders who start their trip at the Cooksville or Meadowvale stations and take Mississauga Transit shuttle routes, or Toronto Transit Commission outbound at Union Station.

Greater Toronto Transportation Authority (GTTA) will assume responsibility of the Presto fare system as it gets rolled across the region.

In late 2008, the use of the Presto fare card will be expanded to include Burlington and Oakville commuters including the GO Transit Lakeshore West line. By 2010, Presto will be fully implemented on Brampton, Burlington, Durham Region, Hamilton, Mississauga, Oakville, Toronto, York Region and GO transit systems. The TTC will accept the Presto card at five subway stations, including Don Mills, Downsview, Finch, Islington, and Union stations.

5. CANADIAN-BASED ALDERGROVE CREDIT UNION SELECTS OPEN SOLUTIONS' TECHNOLOGY PLATFORM
Source: Open Solutions (06/21)

Aldergrove Credit Union, located in the Fraser Valley of British Columbia, has selected Open Solutions Inc.'s The Complete Credit Union Solution®, as its core banking system platform. The credit union will also implement Open Solutions' financial accounting suite, its asset/liability management and budget planning product, report viewing and archiving capability and electronic signature capture. Open Solutions is a leading provider of integrated enabling technologies for financial institutions worldwide. Aldergrove Credit Union offers a full slate of financial products and services, including financial planning and wealth management.

Open Solutions Canada is a member of ACT Canada; please visit http://www.opensolutions.com.

6. CARDWARE 07 REPORT
Source: ACT Canada (06/28)

Both Toronto and Ottawa were attended by more delegates from the market than from the industry for a second year in a row and some of Canada's largest merchants attended the Merchant workshop.

The acquirers present in Toronto heard a strong message from merchants and one that was echoed by issuers, giving them an opportunity to discuss it with their merchants, and also with prospects. The payment card associations heard clearly that the communication path to merchants is not getting all the results they had hoped for and by the end of the day, conversations were being held to determine new ways for EMV stakeholders to get what they need.
In Ottawa, delegates heard many speakers talk about the need to choose the right technology for their projects. Most often referenced was the US choice of long-range RFID for a border crossing ID. At one point it was referred to as pallet technology, leaving the audience with a vision of people as walking pallets. Policy decisions, public perception and political insights were the focus of the presentations, along with updates on standards, technology and the initiatives of other governments.

At the of the day in Ottawa, participants expressed support for an ongoing Smart Card Information Network and ACT Canada will work with federal and provincial governments to determine the scope and delivery mechanisms.

Overall both Cardware events delivered insights for participants. It was a good investment of one day for busy people. Proceeding will be made available to delegates next week.

7. GEMALTO SELECTED TO PROVIDE CITIBANK TAIWAN WITH EMV TURNKEY SOLUTION
Source: ICMA Daily News (06/12)

Gemalto announced that Citibank Taiwan selected Gemalto as exclusive EMV migration launch partner and to provide over one million banking cards, personalization services and turnkey solution.

"A migration of technology of this scale, being Taiwan's largest foreign bank, is fraught with challenges, and careful planning and extra diligence is necessary," said Daniel Huang, vice president, Transaction Service Group of Citibank Taiwan. "Experience counts for a lot and having a one-stop-shop makes life easier for everyone involved. Migration to EMV microprocessor card technology is an important milestone and we believe our customers will benefit from the enhanced security provided whilst maintaining the same levels of convenience."

Citi Cards Canada and Gemalto are members of ACT Canada; please visit http://www.citicards.ca & http://www.gemalto.com.

8. FASTER PAYMENTS TO THOUSANDS OF NEW YORK TAXIS COMING
Source: Contactless News (06/12)

Visa and taxi innovation expert Creative Mobile Technologies (CMT), announced the launch of a program to enhance the payment experience for New York taxi passengers. The initiative, which started in June 2007, will equip thousands of New York taxicabs with contactless payment readers located in the back of the taxi, enabling passengers to simply pay with a wave.

Visa payWave is a new technology feature found on a growing number of Visa cards worldwide. It uses radio-frequency technology to send payment information rapidly and securely over an extremely short distance to the point of sale terminal.

New York taxis equipped with the new readers are able to accept both Visa payWave transactions as well as traditional "swipe" transactions. Passengers are able to include a tip to the price of the fare, and no signature is required for transactions under $25. Visa research shows that increasingly consumers want to use a payment card for purchases under $25 for convenience (73 percent), efficiency (44 percent) and speed (39 percent).

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

9. IT SECURITY SOLUTIONS FROM GIESECKE & DEVRIENT SUCCESSFULLY COMPLETE WINDOWS SMART CARD FRAMEWORK CERTIFICATION PROGRAM PILOT FOR WINDOWS VISTA
Source: Giesecke & Devrient (05/30)

Giesecke & Devrient (G&D) has become one of the first companies meeting the quality criteria of Microsoft's Ireland-based Smart Card Certification Center for Windows Vista with its StarSign IT security solution products. Using smart cards from the StarSign family of products, PC users can securely authenticate themselves on networks and for IT applications. The compliance with Microsoft's certification requirements confirms that StarSign lives up to the quality standards set by Microsoft.

Microsoft's Smart Card Certification Center has been working closely with early adopters of the Windows Smart Card Framework to develop a certification program that balances the needs of both Microsoft and IHVs. The result of this close cooperation will be a fully fledged certification program that will award "Designed for Windows" logos for card minidrivers and smart cards that meet the Windows Vista logo program requirements for smart card minidrivers. Microsoft's Smart Card Certification Center is located in the Ireland based European Development Center.

Giesecke & Devrient is a member of ACT Canada; please visit http://www.gi-de.com.

10. GEMALTO DELIVERS 1st SMART CARD DRIVING LICENSE PROGRAM IN MEXICO
Source: ICMA Daily News (06/14)

Gemalto announces that it has successfully delivered Mexico's first smart card driving license to the city of Monterrey, Nuevo Leon state, Mexico. The contract includes 900,000 driving licenses over a period of 3 years. This new card also acts as a reliable ID document and opens up the potential for additional e-schemes like healthcare for the benefits of all citizens.

The driving license is a chip-based ID document that entitles a specific person to drive a certain category of vehicle. The microprocessor securely stores a high-resolution picture of the holder, his/her blood type, and the drivers' credentials to enable digital signature. The chip also contains the history of drivers' fines, allowing the transit authorities to easily monitor drivers' behavior on the roads and could, in the future, be used for insurance companies to calculate policy costs. Fingerprint and facial picture of the driver are encoded in the card body.

Gemalto is a member of ACT Canada; please visit http://www.gemalto.com.

11. FIME CONTINUES ITS INTERNATIONALIZATION INTO NORTH AMERICA
Source: Source: FIME (05/31)

FIME is expanding its international presence with the opening of FIME America, a leading new test centre integrated into Silicomp Canada's facilities, located in Montreal, Quebec. As of June 2007, FIME's team will offer North American local customers its technical and commercial experience. This new centre proposes the complete range of FIME test solutions for a variety of diverse sectors, including the banking, identity, transport and health markets. FIME aims to increase its testing capacity for cards and terminals through the development of the new site.

FIME is a member of ACT Canada; please visit http://www.fime.com.

12. WMATA IMPLEMENTS BASE24-EPS TO ENHANCE CARD PURCHASE PROCESSING
Source: Contactless News (06/19)

ACI Worldwide announced that the Washington Metropolitan Area Transit Authority (WMATA) has implemented BASE24-eps to enhance the processing and routing of debit and credit card transactions originating from WMATA's ticketing machines in the Washington, D.C., metropolitan area.

"The flexibility and scalability of BASE24-eps allows WMATA to easily add other transit systems to our network, such as the Maryland Transit Authority (MTA), which we plan to add later this year," said Chris Cipperly, assistant treasurer, Office of the Treasurer Department of Finance at WMATA. "Our debit and credit transactions are routed and processed much more efficiently than before."

WMATA's previous system processed record transaction volumes in recent months as the use of debit and credit cards increased. With BASE24-eps, WMATA has greater flexibility in routing and processing card payments, as well as improved real-time transaction management and monitoring. The increased online management capability of BASE24-eps enables WMATA to monitor card traffic, help detect fraudulent transactions and reduce its overall network operation costs.

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

13. EDS LAUNCHES MID-RANGE CARD PLATFORM IN BRAZIL
Source: epaynews.com (06/19)

EDS has launched a mid-range card processing platform in Brazil that is designed to allow a wider range of financial institutions and retailers to offer credit cards.

Vinnie Calo, director of global card services at EDS, says the system is designed for both banks wanting to issue credit cards and retailers seeking to enter the private-label card market in Brazil. "The credit card outsourcing market is really growing in Brazil, with the private-label sector expanding faster than the bank card market," Calo says. "There are a lot of Brazilian retailers that want to launch a store card operation, and are looking for outsourcing service providers."

EDS says the first Brazilian bank to publicly announce that it is using the U.S. firm's card processing platform is BV Financeira. The Sao Paulo-based bank has signed a six-year contract with EDS, and has already issued both Visa- and MasterCard-branded credit cards using the EDS platform.

According to EDS, BV Financeira expects its credit card portfolio to grow to around 3 million cards in the next six years.

EDS currently processes 4.5 million cards in issue and 2.1 billion card transactions a year in Brazil for its Brazilian clients.

EDS is a member of ACT Canada; please visit http://www.eds.com.

14. SMART CARD READER FROM SCM MICROSYSTEMS RECEIVES QUALIFICATION FOR USE IN U.S. HOMELAND SECURITY PROGRAM
Source: SCM Microsystems (06/20)

SCM Microsystems announced that its SCR3310v2.0 smart card reader has been approved by the U.S. Government Services Administration (GSA) as compliant with Homeland Security Presidential Directive (HSPD)-12. As a result, the SCR3310v2.0 smart card reader is now included on the GSA's FIPS 201 Approved Product List that governs which products and services may be purchased by federal agencies for the HSPD-12 program.

SCM's SCR3310v2.0 is suitable for a wide range of applications, including network security, secure logon, email encryption, home banking, e-loyalty, e-healthcare, and others. Leveraging more than a decade of experience including more than ten million readers shipped worldwide, the new USB reader complements SCM's existing reader portfolio while adding support for all relevant security standards, including support for all ISO 7816 class A, B and C smart cards (i.e., 5V, 3V, and 1.8V smart cards). Its unique and flexible architecture prevent obsolescence by allowing support for new or additional cards in the field while protecting the integrity of the product. The SCR3310v2.0 also offers the fastest transfer rate available among comparable readers.

SCM Microsystems is a member of ACT Canada; please visit http://www.scmmicro.com.

15. VODAFONE NAMES GIESECKE & DEVRIENT "SUPPLIER OF THE YEAR"
Source: ICMA Daily News (06/05)

Vodafone has presented its "Supplier of the Year" award to Giesecke & Devrient (G&D in recognition of its outstanding commitment. G&D recently received the award at Vodafone's "Global Supplier Conference" for its commitment and capability in enabling Vodafone to deliver to its global customers reliable and innovative products and services in a highly competitive marketplace. Vodafone measures supplier performance regularly as supplier performance management and the delivery of continuous improvement is a key component of Vodafone's supply chain strategy.

"This award recognizes how G&D demonstrated a spirit of true strategic partnership by understanding Vodafone's needs, then by delivering excellent service and value," said Detlef Schultz, Vodafone's Global Supply Chain Management Director.

Giesecke & Devrient is a member of ACT Canada; please visit http://www.gi-de.com.

16. FINO ADOPTS GEMALTO SMARTCARDS TO ACCELERATE MICROBANKING DEPLOYMENT IN INDIA
Source: ICMA Daily News (06/25)

Gemalto announced the successful introduction of smartcard technology with biometric authentication for Financial Information Network & Operations Ltd. (FINO) in India. The Gemalto solution conveniently and securely stores transaction records inside the smart card to enable microbanking and simplifies access to financial services for the under-banked population in rural India.

FINO provides end-to-end core banking technology solutions including smart cards to microfinance partners, banks and Non-Governmental Organisations (NGO) involved in serving low-income households in the urban and rural regions in India as business correspondents of large institutions. Currently, an estimated 500 million people in these areas are either not served or are underserved by the finance sector (source: Ananth Bindu, et. al - A blueprint for the delivery of Comprehensive Financial Service to the poor in India, Dec 2004).

Each FINO card developed by Gemalto can hold up to 15 different types of secure applications that facilitate financial services such as deposit remittances, savings, loans, insurance and e-purses.

In addition, the card acts as an electronic statement to log all transactions with the ability to store the last 150 transactions (up to 10 transactions per service). Transactions are validated using biometric authentication, which provides one of the highest degree of digital security available today. End-user transaction is approved after fingerprint information is read using low-cost readers and then verified by the card microcomputer at business correspondents facilities and at selected retail outlets and partner premises.

Gemalto is a member of ACT Canada; please visit http://www.gemalto.com.

17. 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/

BEIJING TO INTRODUCE CELLPHONE-INTEGRATED SMART CARD ON PUBLIC VEHICLES

Beijingers may soon be able to punch their mobile phones to pay for tickets on public transit…

NORDIC BANK TO DISTRIBUTE SMART CARD READERS FOR WEB BANKING, E-GOVERNMENT

Sweden-based Nordea Bank intends to begin distributing smart card readers to up to 1.1 million customers…

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.