Stakeholders Driving Payment Evolution and Digital Identity

November 2007 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. RBC & Visa To Launch Mobile Phone Payment Pilot
3. BMO Adds 'Tap & Go' Convenience To Mosaik Mastercard
4. Canadians Far Exceed Us Consumers In Loyalty Activity - Members Only Access
5. Open Solutions Canada Launches Gift Card Program For Canadian Small & Medium Merchant Market
6. Oberthur Card Systems Selected For The Leading French NFC Payment Project
7. FIME & Integri Sign Test Tool Partnership Agreement
8. Shell Launches Biometric Pay At Pump Service - Members Only Access
9. Latvian Government Begins Issuing E-Biometric Passports Made By Giesecke & Devrient
10. ACI Launches Prepaid Card Management System
11. Bell ID & Collis Forge Strategic Technology Partnership
12. Gemalto Selected To Provide Colombia's First SIM-Based Mobile Banking Service
13. NXP & Sony Create Moversa, A Joint Venture For Universal Contactless Solutions
14. Canadian Firm In Mexican M-Payments Roll Out - Members Only Access
15. Hypercom & Keycorp Team To Provide Complete Pos Solutions
16. European Resident Permit Made More Secure With Smart Card Technology & Biometrics
17. Banking On Transit: Taiwan's Expensive Rollout Of Cobranded Cards - Members Only Access

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

Scotiabank ~ member since 1997

GENERAL

Smart Technology Solutions Ltd (STS) ~ new member

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (11/26)

Paris: it was the best of times; it was the worst of times…

I am writing to you from Italy, a country that used to be known for their civil strikes, but for the past three years it has been Paris that has ground to a halt.

Cartes, unquestionably the largest and most important conference in our industry, has been directly impacted the past two years. Transit strikes made it difficult, if not impossible, for people to get out to the Parc d'Exposition from downtown. Sophie Lubet, the General Manager of Cartes, managed to do the impossible, find buses that could be rented to shuttle people from Gare du Nord.

The future of Cartes is of great consequence to all of us. Along with our regional conferences where we focus on local issues and initiatives, Cartes brings together the world's stakeholders. Introductions and meetings held there result in actions at home. For example, in 2006, we met representatives of an established Canadian organization. Since then we have proposed two new product lines for them, introduced them to prospective clients and partners and helped them with research and messaging. Could we have met them in Canada? Yes, but they found us at Cartes, as do so many others. Without the Cartes Sesames awards, how would innovation be acknowledged and applauded?

Everyone who organizes conferences appreciates the backbreaking amount of work required to manage speakers, exhibitors, venues, awards, registrants, media, logistics and countless details. Congratulations to Sophie Lubet and her team, for not only doing that very well, but for also dealing with the added frustration of the strikes.

Next year Cartes will continue the tradition of being in Paris. We can only hope that the ritual of crippling strikes does not.

Let me end by thanking Benoit Guez for his help in getting us out to the Parc and for his remarkable driving skills! Merci Benoit.

2. RBC & VISA TO LAUNCH MOBILE PHONE PAYMENT PILOT
Source: ICMA Daily News (11/05)

RBC and Visa Canada are teaming up to be the first in Canada to pilot a mobile payment service that uses cellphones rather than traditional credit cards for making Visa purchases. This Ontario-based pilot is expected to be completed in 2008, and involve multiple phases including in-lab testing, an RBC staff pilot and a consumer trial.

As part of the pilot, mobile devices will be embedded with Near Field Communication (NFC) contactless chips that will enable users to make purchases using the Visa payWave feature just as they would with a contactless payment card. The functions to be tested in the pilot include secure delivery and storage of account information to the mobile device; mobile payments at retailers; storing and redeeming mobile payment coupons; and mobile account management.

RBC's launch of mobile payments in Canada is closely aligned with the country's migration to chip card technology. RBC is currently participating in the payment industry chip trial taking place in the Kitchener-Waterloo area by issuing chip cards to their clients.

As part of the chip card trial RBC will also provide many clients with the Visa payWave contactless payment feature on their chip card. This allows users to wave their credit card near a Visa payWave reader rather than having to swipe the card or insert it into a chip reader. These transactions do not require a signature or a PIN to complete the purchase.

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

3. BMO ADDS 'TAP & GO' CONVENIENCE TO MOSAIK MASTERCARD
Source: Canada Newswire (11/01)

BMO Bank of Montreal has added an innovative and convenient new payment feature called MasterCard PayPass to its Mosaik MasterCard cards. This new feature lets customers quickly pay for purchases using their BMO Mosaik MasterCard at merchants with MasterCard PayPass payment terminals without having to swipe their card - they simply "Tap & Go". There's no need to hand over the card to the cashier and in most instances, no signature is required.

PayPass is currently available at a growing number of convenient locations such as Tim Hortons, Cineplex Odeon, Petro-Canada, Loblaws and affiliated stores, Rabba Fine Foods. McDonald's Canada has announced that they will begin accepting PayPass transactions in 2008 at select locations.

"BMO Bank of Montreal with our partner Giesecke & Devrient are working together to fuel the storm of contactless bankcards expected to sweep the Canadian marketplace in the year ahead. We are confident G&D is the partner to provide the quality and experience expected by BMO Bank of Montreal customers." commented Mike Kitchen Senior Vice President, Card & Retail Payment Services for BMO Bank of Montreal. (Source: Giesecke & Devrient, November 13, 2007)

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

4. CANADIANS FAR EXCEED US CONSUMERS IN LOYALTY ACTIVITY

Available in the ACT Canada Members Only section of our web site. Click on the link below to access this section.
http://www.actcda.com/members-only/members-only-news/

If you are a member of ACT Canada but do not have your login details please contact me - andrea@actcda.com.

5. OPEN SOLUTIONS CANADA LAUNCHES GIFT CARD PROGRAM FOR CANADIAN SMALL & MEDIUM MERCHANT MARKET
Source: Open Solutions (10/31)

Open Solutions Canada's Payment Solutions Group recently introduced its new gift card program that will enable small- and medium-sized merchants to compete with larger retailers in the highly successful gift card market.

Open Solutions Canada's Payment Solutions Group develops, implements and supports payment transaction processing solutions for financial institutions, retailers and third-party organizations around the world. Its independent sales organizations (ISOs) will deliver gift card programs to their Canadian merchants through Open Solutions Canada's agreement with Secure EFT.

Through this agreement, Open Solutions Canada will use Secure EFT's innovative technology platform to provide merchants with an easy-to-use and affordable gift card program that can assist in increasing customer visits and enhance revenue.

Payment Solutions Group General Manager Mike Kelso, said, "We are pleased to add gift cards to the suite of products and services our ISOs can offer to their merchant clients. Consumer and merchant demand for gift cards continues to rise in Canada and our gift card program enables small-business owners to enter this market space at a reasonable cost." Kelso continued, "Open Solutions Canada is delighted to work with Secure EFT and its industry-leading partners to deliver this program to the Canadian market."

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

6. OBERTHUR CARD SYSTEMS SELECTED FOR THE LEADING FRENCH NFC PAYMENT PROJECT
Source: Oberthur Card Systems (11/12)

Oberthur Card Systems is one of the industrial players chosen to participate in "Payez Mobile", the cutting edge French NFC payment project. Oberthur Card Systems will work with a consortium of six large financial institutions and four mobile operators, in collaboration with Visa and MasterCard.

NFC mobile payment is one of the most talked about subjects in the field of payment innovation and mobile-related services today. With the launch of more than ten major pilots and volume deployments in different regions around the world, the demand for NFC technology is increasing at an explosive rate.

Through the largest and most advanced project in the field of NFC mobile payment, Oberthur Card Systems will demonstrate its ability to deliver a complete solution, from SIM production and personalization to OTA platform management.

Oberthur Card Systems is a member of ACT Canada; please visit http://www.oberthurcs.com.

7. FIME AND INTEGRI SIGN TEST TOOL PARTNERSHIP AGREEMENT
Source: FIME (11/06)

FIME and Integri announced the agreement to build future FIME test tools on Integri's INQ Open Platform. As part of this agreement, the INQ platform will be automatically included as part of the FIME's products line.

Integri's INQ Open Platform can easily be customized or adapted to customer needs. This makes it more straightforward to add new test suites or update test products to support new or modified specifications. Both companies have extensive experience in testing and have been working together on various test solutions for several years. The use of INQ will enable FIME to run and certify tests on a common platform, which will contain all necessary building blocks for its entire product range.

The partnership will span across the products and services provided by FIME, and will serve the increasing complexity of next generation tests for contact and contactless products.

FIME and Integri are members of ACT Canada; please visit http://www.fime.com & http://www.integri.com.

8. SHELL LAUNCHES BIOMETRIC PAY AT PUMP SERVICE

Available in the ACT Canada Members Only section of our web site. Click on the link below to access this section.
http://www.actcda.com/members-only/members-only-news/

If you are a member of ACT Canada but do not have your login details please contact me - andrea@actcda.com.

9. LATVIAN GOVERNMENT BEGINS ISSUING ELECTRONIC BIOMETRIC PASSPORTS MADE BY GIESECKE & DEVRIENT
Source: Giesecke & Devrient (11/26)

Latvian citizens began receiving their new biometric passports on November 20, 2007 - the first business day after Latvia's main national holiday. In January 2007, Latvia's Interior Ministry hired Giesecke & Devrient (G&D), a Munich-based security technology group, to produce and deliver 1.1 million electronic passports over the next five years. Being the prime contractor, Giesecke & Devrient is responsible for system integration, from data capture to document personalization. In the beginning, the chip in the electronic passport (e-passport) will store the digital passport photo as a biometric feature for facial recognition. In 2008, two fingerprints will be added.

In the course of the year, G&D in cooperation with selected subcontractors upgraded Latvia's former machine-readable ID system to a highly secure system with biometric features that conformed to the requirements laid out by the International Civil Aviation Organization (ICAO) and the European Union. The digital passport photo used for facial recognition will first be stored on the passport chip, which runs G&D's StarCos smart card operating system. In mid-2008, two fingerprints will be added to provide even more security.

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

10. ACI LAUNCHES PREPAID CARD MANAGEMENT SYSTEM
Source: ePaynews.com (11/16)

ACI Worldwide has put together a technology package to help retailers and financial institutions launch prepaid card programs.

ACI says its technology is able to automate the various business processes involved in prepaid card issuance, including authorization, account management, clearing, fraud detection and dispute resolution. The system can be implemented in its entirety or on a modular basis depending on customer requirements, the U.S.-based payments software firm says.

Customers can either license the technology or use it on an on-demand basis, with ACI hosting the software on its computers.

"The (system) represents a logical extension of ACI's traditional role as a payments solutions provider," Richard Launder, ACI global solutions' president, says in a statement. Launder says that prepaid card issuers need software that is flexible and scalable so that their prepaid programs can change in response to market developments.

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

11. BELL ID AND COLLIS FORGE STRATEGIC TECHNOLOGY PARTNERSHIP
Source: Smart Card Alliance News Summary (11/06)

Bell ID and Collis signed a global strategic partnership agreement. The partnership will integrate Bell ID's ANDiS smart Card and Application Management System (CAMS) with the Collis Card Image Editor (Collis CIE) and the Collis EMV Personalisation Validation Tool (Collis PVT). Combining both companies' EMV, CAMS and Testing expertise will provide financial institutions with faster EMV implementations, reduce costs and provide better quality results.

The ANDiS4EMV CAMS and Collis's CIE and Collis PVT are products that complement each other exceptionally well by providing real benefits to the end customers. Financial institutions will gain an easy way to define card templates and ensure higher quality standards in their EMV card production. Integrating the Bell ID and Collis products ensures a smooth certification process for the banks and significantly reduces the implementation time of an EMV project.

Both products will support each others file formats as part of the standard settings and avoid customisation during the testing phase of an EMV project. The two product combinations will be supporting mass personalisation and branch issuance personalisation processes.

Using the Collis PVT to test cards produced by the ANDiS4EMV Branch Issuance solution, which allows banks to issue cards on demand inside the bank branch in a distributed personalisation system, will provide issuers with a quality control instrument and may assist banks obtaining personalisation infrastructure certification with the credit schemes.

Collis is a member of ACT Canada; please visit http://www.collis.nl.

12. GEMALTO SELECTED TO PROVIDE COLOMBIA'S FIRST SIM-BASED MOBILE BANKING SERVICE
Source: Gemalto (11/28)

Gemalto announced the successful commercial launch of its mobile banking services with all Colombian GSM operators and Colombia's largest banking network, Redeban Multicolor. This solution from Gemalto allows the mobile subscribers to perform secure transactions on the move and access banking services, transfer money, check their account balance, recharge mobile pre-paid, and pay bills. These services are accessible through an easy- to-navigate menu and available 24 hours a day.

Gemalto's mobile Banking solution includes a secure software application stored in the SIM (Subscriber Identity Module) card, a server and software that interprets the messages that are exchanged between the banks and the SIM. The solution offers security in the entire transaction process, since the messages are encrypted in the SIM chip and decrypted at the banks' server, which translates the messages to a specific format.

"The m-banking menu is already available to more than 20 million GSM subscribers in the country. Our initial expectation is that 20% of this customer base will execute at least 5 transactions per month. The service is already generating demand, balance check and pre-paid re-charge being the most required services. A few weeks after the launch, the first results show a very successful uptake of the service with more than half million transaction making an average of 6 requests, per active user, per month. To us it clearly showcases the winning combination of the solution: convenience, ease-of-use, mobility and security", says Valentin Echeverry, Technology and Operations Vice-President at Redeban Multicolor.

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

13. NXP AND SONY CREATE MOVERSA, A JOINT VENTURE FOR UNIVERSAL CONTACTLESS SOLUTIONS
Source: NXP (11/14)

NXP, and Sony Corporation announced the formation of Moversa, a joint venture (JV) that will drive global adoption of contactless smart card applications in mobile phones using Near Field Communication (NFC).

Moversa will plan, develop, produce and market a secure chip, a Universal Secure Access Module (U-SAM), that incorporates both MIFARE and FeliCa™ operating systems and applications, two of the most widely installed contactless smart card technologies in the world. The U-SAM will also support other contactless operating systems and applications based on customer requirements. Moversa will be headquartered in Vienna, Austria, and led by co-presidents Guus Frericks of NXP and Toshio Yoshihara of Sony.

When used together with an NFC chip, Moversa's U-SAM will create a universal contactless IC platform for mobile phones that can be used globally. The formation of Moversa will accelerate the adoption of NFC on a global level. Since its co-inventors, NXP and Sony, introduced the short-range wireless technology to the market in 2002, NFC has proven popular in numerous trials, opening up new opportunities for commercial mobile services around the world.

Moversa paves the way for consumers to use mobile handsets for various contactless applications such as mobile payments and transport ticketing, anytime, anywhere. The U-SAM products will provide mobile device manufacturers with the technology to design global products compatible with different contactless protocols and operating systems deployed in different countries. This enables service providers such as mobile phone operators, transportation network operators and credit card companies to accelerate the rollout of advanced contactless services to mobile phone users. First samples of the secure chip will be available by mid-2008 for solutions embedded in mobile phones. Initial commercial deployments are targeted for the end of next year.

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

14. CANADIAN FIRM IN MEXICAN M-PAYMENTS ROLL OUT

Available in the ACT Canada Members Only section of our web site. Click on the link below to access this section.
http://www.actcda.com/members-only/members-only-news/

If you are a member of ACT Canada but do not have your login details please contact me - andrea@actcda.com.

15. HYPERCOM AND KEYCORP TEAM TO PROVIDE COMPLETE POS SOLUTIONS
Source: Keycorp (11/06)

Hypercom Corporation and Keycorp Limited announced that they have entered into a strategic agreement under which Keycorp will distribute Hypercom's new countertop, mobile and multi-lane Optimum payment solutions throughout Canada as part of Keycorp's Managed Payment Services Program. Both companies will cooperate closely on joint sales and marketing opportunities. The agreement follows Interac Association Device Certification of Hypercom's new Optimum T4200 electronic payment terminals.

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

16. EUROPEAN RESIDENT PERMIT MADE MORE SECURE WITH SMART CARD TECHNOLOGY AND BIOMETRICSS
Source: SecureID News (11/14)

A regulation scheduled for adoption before the end of the year will see the European Union introducing a uniform version of the resident permit that all 27 member states issue to third-country nationals. This harmonization is intended to improve document security and make it easier to verify entitlement to residence. The new EU resident permit is expected to be a smart card-based document that stores biometric data securely.

A technical specification is due be published by 2008 that will ensure compatibility between all electronic residence cards, EU-wide. The new European resident permit will then be rolled out in all member states within a two-year period following release of the specification. The specification will include two biometric identifiers-a facial image and two fingerprints. Data stored on the chip integrated into the electronic residence card will be encrypted and can be transmitted either via the contacts on the chip surface or contactlessly. Depending on country-specific requirements, the chip can also incorporate other applications.

Scheduled for introduction from 2010, the resident permit can act as a temporary entitlement to residence, permanent residency permit, or a visa. It is estimated that 20 million people within the EU require such a permit. The new electronic resident permit will replace the labels used to date, which no longer meet increasing security demands.

17. BANKING ON TRANSIT: TAIWAN'S EXPENSIVE ROLLOUT OF COBRANDED CARDS

Available in the ACT Canada Members Only section of our web site. Click on the link below to access this section.
http://www.actcda.com/members-only/members-only-news/

If you are a member of ACT Canada but do not have your login details please contact me - andrea@actcda.com.

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.