Stakeholders Driving Payment Evolution and Digital Identity

July 2008 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. Tourism Industry, Security Experts Divided On Proposal For High-Tech Driver's Licences
3. Visa Upgrades payWave To EMV Standard
4. Giesecke & Devrient and Aveso Partner To Produce Hot Laminated Electronic Display Cards
5. Barclays Claims Card-Reader Has Eliminated Fraud
6. MasterCard & Bank Asya Launch One Of The World's Most Versatile & Advanced Chip Cards
7. Canadians First In Online Bank Usage - Members Only Access
8. Soaring Customer Satisfaction For French M-Payments Scheme
9. Hypercom Artema Modular Unattended Payment Terminal Receives Interac Device Certification
10. NFC Phones To Generate $75bn Worth Of Payment Transactions Within 5 Years - Members Only Access
11. Citi Hong Kong Brings Credit To Octopus Card Scheme
12. Registered Traveler Set To Go Nationwide - Members Only Access
13. Major Health Insurance Fund Awards Contract For E-Healthcare Cards To Giesecke & Devrient
14. Aconite Buys Datacard's Affina Enterprise Smart Card Management System
15. Compliance Does Not Guarantee Security - Members Only Access
16. GFI Solutions Continues Canadian Expansion, Establishing A Presence In The Greater Toronto Area

ACT Canada is pleased to announce our new Partner - Collis

Collis
Collis is a leading provider of EMV, e-ID, and e-Passport test tools, consulting, and training in Canada. Contact us for EMV training and test tools for every step of the EMV Transaction life-cycle - Cards, Terminals, Acquiring host and Authorization host. Collis America at 1-651-925-5410.

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

GENERAL

Aconite ~ rejoining
Collis ~ member since 2006
GFI Solutions ~ new member
Hypercom ~ new member
Ingenico ~ member since 1990
YESpay International ~ new member

GOVERNMENT

Treasury Board of Canada ~ new member

ASSOCIATE

GFH Group ~ member since 2007

CALENDAR OF EVENTS

ACT Canada is pleased to present:

Cardware 08 - Securing ID
September 23, 2008
Ottawa, ON, Canada
&
Cardware 08 - Securing Payments
October 8 & 9, 2008
Kitchener Waterloo, ON, Canada

Additional information is available at http://www.actcda.com/calendar/symposium.htm. ACT Canada members receive discounts for this event.

Loyalty World 2008
September 23-26, 2008
London, England
http://www.terrapinn.com/2008/lw08/

Smart Card Alliance 7th Annual Smart Cards in Government Conference 2008
October 22-24, 2008
Washington, DC, USA
http://www.smartcardalliance.org

CARTES & IDentification 2008
November 4-6, 2008
Paris, France
http://www.cartes.com

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (07/29)

Congrats to the Federal Government and our New Board

The Government of Canada issued a request for information related to Credential and Authentication services this week. It has wide spread implications for banks, online retailers, provinces, territories and federal government organizations. This preliminary step could lead to a strategic plan to, "implement a next generation portfolio of credential, authentication, and identity and access management services."

This could leverage Secure Channel which needs to evolve to meet the broad needs of all stakeholders. As other countries implement e-government services, we must not fall behind. Not only is there the matter of supporting our citizens and businesses who transact with government, but there is also the very serious matter of security.

Authentication is a highly complex issue when dealing with employees or customers, but it is more so when dealing with both of these across multiple delivery and communication channels. Soliciting information from the private sector is a commendable step, and ACT Canada members have extensive international experience in this area. Following through with a strategic plan, and implementing it in a timely fashion, will be a testament to the resolve of our government to be a world leader in e-government.

On September 23rd, ACT Canada is in Ottawa presenting Cardware 08: Securing ID across Organizations and Jurisdictions. This is a timely opportunity for all stakeholders to come together to focus on this subject. For more information, please visit www.actcda.com.

Challenges for the new ACT Canada board.

Our new board was recently elected. Richard Adamson, who skillfully guided us into a new market phase, will serve as Past Chairman. Nino Di Teodoro of Citi Cards Canada takes on the roles of Chairman and Treasurer. Paul Zatychec of EWA Canada steps up as Vice Chairman. Sharon Fisk of ATB will serve as Corporate Secretary. Returning as directors are Sharon MacAlpine of HSBC and Allen Wright of Interac Association, joined by Didier Serra of Inside Contactless. Their challenge is to guide ACT through a period of growth and increasing demands for our time and resources. To assist, the President's Advisory Council will meet prior to board meetings, starting in October. The council (to be named next month) will provide their input on matters going to the board. On behalf of all of us, our thanks to Michele Davies and Peter Macaulay for their stewardship while on our board.

2. TOURISM INDUSTRY, SECURITY EXPERTS DIVIDED ON PROPOSAL FOR HIGH-TECH DRIVER'S LICENCES
Source: TheStar.com (07/17)

Ontario residents concerned about a new security card being created to meet tighter restrictions at the Canada-U.S. border should add their voices to a debate on the issue, the province's privacy commissioner says.

"The measure that we are seeking is that it must be as secure and as efficient as the passport," said Ann Cavoukian.

"If you have problems with this or any aspect of this, let your officials know what you are thinking." Cavoukian was speaking at a public information forum held at the University of Toronto to discuss Ontario's proposed Enhanced Driver's Licence (EDL). Tourism officials are calling the card a convenient way to boost cross-border spending.

Privacy advocates are calling it a potential security risk. The proposed high-tech driver's licence will have a Radio Frequency Identification (RFID) tag containing citizenship information and will be used as an alternative to passports when driving or travelling by water to the United States after June 2009.

The card is a voluntary option that will be offered to Canadians seeking an alternate way to meet stringent border requirements as set out by the U.S. Western Hemisphere Travel Initiative (WHTI) which requires travellers visiting the U.S. to provide a valid passport or secure document.

When a cardholder approaches the border, their information would be picked up from antennas possessing the ability to read the card from a distance of up to 10 metres.

Catherine Johnston, president of ACT Canada, said her primary concern is that the technology embedded in an EDL can be read at a great distance without the owner's knowledge. "Right now, in theory, there is no personal identifying information on that card. However, it is the key to all of your information that is held in a database," she said.

Cavoukian said the federal government has requested the province create a database of citizenship information for people born outside the country. It presents a serious security risk, she said. "It's absurd that they would expect us to create that information when it resides in Ottawa."

Canadians can find information and add their voice to the debate at http://www.Idforum.ca.

Need to learn more about e-drivers licences, identity management & government card projects?
Join us at Cardware 08 - Securing ID, September 23rd in Ottawa

3. VISA UPGRADES PAYWAVE TO EMV STANDARD
Source: Contactless News (07/02)

Visa has announced new global specifications for its payWave platform based on based on the international EMV standard. The company says the new global spec, called Visa Contactless 2.0, will ensure customers can use their contactless cards worldwide, while still offering the flexibility for customization to meet local market needs.

The new spec provides additional security options and enhanced performance for faster transaction processing. According to Visa, the spec also supports a variety of payment platforms - credit, debit and prepaid - and can be embedded in mobile devices.

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

4. GIESECKE & DEVRIENT AND AVESO PARTNER TO PRODUCE HOT LAMINATED ELECTRONIC DISPLAY CARDS
Source: PRNewswire (07/02)

Aveso, Inc. and Giesecke & Devrient announced they have partnered to produce hot laminated electronic display cards featuring Aveso's rugged display technology. The companies will introduce products to meet the global demand for one-time password (OTP) authentication cards used to protect online information in the enterprise, banking and consumer markets. OTP cards place one-time password authentication into a convenient credit card form factor.

Under the partnership, the companies will leverage Giesecke & Devrient's (G&D) smart card technology expertise and global secure card manufacturing infrastructure to produce high quality OTP display cards that feature an Aveso display embedded together with a battery, circuit and button in a standard credit card form factor.

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

5. BARCLAYS CLAIMS CARD-READER HAS ELIMINATED FRAUD
Source: ZDNet UK (07/18)

The UK's third-largest bank said that it has distributed the card reader, made by Gemalto, to more than one million customers, and that none have been hit by fraud. Takeup of the devices has been higher than expected, exceeding 30 percent of the online user base, Barclays said. The bank chose PINsentry because of its similarity to chip and PIN, rolled out in 2006 across UK retailers.

Barclays began distributing the authentication devices in the second half of last year, initially sending out 500,000 units, becoming the first UK bank to distribute end-user chip and PIN terminals. Any user wishing to set up an online transfer to a new third-party account, other than a standard supplier such as a utility company, is required to use the system.

Barnaby Davis, director of electronic banking at Barclays, said last year that the arrangement was intended to limit the damage that could be caused by someone using stolen bank details. Barclays digital banking director Sean Gilchrist said the system was designed to be easy to use and highly secure. "Adoption of the PINsentry reader by one million cardholders in one year is a clear demonstration that we made the right choice," he stated.

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

How can Canadian banks and merchants deal with e-banking and online payment issues?
Join us at Cardware 08 - Securing Payments, October 8 -9 in Kitchener-Waterloo

6. MASTERCARD AND BANK ASYA LAUNCH ONE OF THE WORLD'S MOST VERSATILE AND ADVANCED CHIP CARDS
Source: Smart Card Trends (07/03)

MasterCard and Bank Asya have launched Asyacard DIT - a multi-application chip and PIN card, combining the power of MasterCard EMV OneSmart features with an integrated municipal toll and transit application to create one of the world's most versatile and advanced chip cards. The card also offers the additional benefits of MasterCard PayPass contactless technology.

The MasterCard OneSmart program helps banks to develop new chip-based added value applications quickly and easily. Using the AsyaCard DIT, Bank Asya customers can pay using MasterCard PayPass contactless technology with a simple tap. The card also includes MasterCard Chip Authentication Program (CAP), a secure two-factor authentication technology, which allows customers to securely access online account information. The PC-connected version of the CAP personal card reader for AsyaCard DIT also enables cardholders to securely top-up offline balances for PayPass payments and to securely interact with public transport applications.

Bank Asya's innovative approach of putting toll and transit functions onto contactless smart cards has allowed them to seize the opportunity offered by the Kahramanmaras Public Transportation Project, a municipal initiative in Eastern Turkey. AsyaCard DIT owners can also use their cards on the tolls on motorways and bridges, including the two bridges over the Bosphorus Straight in Istanbul that connects Europe and Asia. With the full support of MasterCard and using the leading edge technologies offered by Turkish payment software provider, SmartSoft, Bank Asya issued a unique card that has this many built-in features for the first time. AsyaCard DIT holders can also receive their cards immediately in the banks' branches (instant issuance), avoiding the usual wait for a card to arrive.

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

7. CANADIANS FIRST IN ONLINE BANK USAGE - Members Only Access

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.

8. SOARING CUSTOMER SATISFACTION FOR FRENCH M-PAYMENTS SCHEME
Source: Finextra.com (07/02)

The Payez Mobile pilot - overseen by the French "Secure Electronic Transactions" (TES) cluster in Lower Normanday - was launched in November 2007 to test customer satisfaction and interoperability among systems provided by different suppliers.

Around 1000 customers and 200 sales outlets in the cities of Caen and Strasbourg were recruited to participate in the pilot. Participants can make payments of less than EUR20 by tapping their handsets against specially designed terminals.

The consortium that launched the pilot includes French banks BNP Paribas, Groupe Crédit Mutuel-CIC, Crédit Agricole and LCL, Groupe Caisses d'Epargne, La Banque Postale and Société Générale as well as mobile operators Bouygues Telecom, Orange and SFR.

MasterCard and Visa are involved in the programme, along with handset manufacturers LG, Motorola and Sagem and eftpos vendors Ingenico and Sagem Monetel. Gemalto, along with Oberthur Card Systems, was chosen to provide SIM cards and an application management platform for the pilot.

Gemalto is reporting a new contract with the consortium following the early success of the project. Gemalto says studies by the consortium show that customers cite an "all-in-one approach" and "ease of use" as the most popular features of the mobile payments system.

When launching the Payez Mobile trial, the group said the mobile payments system would contribute "to the definition of an international standard within the future single euro payments area (Sepa).

Earlier this week the European Payments Council (EPC) said it will work with GSMA - an international trade group of mobile operators - to accelerate the deployment of mobile payment services in Sepa.

Gemalto, Ingenico, MasterCard Canada & Visa Canada are members of ACT Canada; please visit http://www.gemalto.com; http://www.ingenico.com; http://www.mastercard.ca & http://www.visa.ca.

M-payments & NFC: Now, Near or Never? Find out what you need to know about emerging payments.
Join us at Cardware 08 - Securing Payments, October 8 -9 in Kitchener-Waterloo

9. HYPERCOM ARTEMA MODULAR UNATTENDED PAYMENT TERMINAL RECEIVES INTERAC ASSOCIATION DEVICE CERTIFICATION
Source: Hypercom (07/22)

Hypercom Corporation and MSC, a wholly owned subsidiary of Moneris Solutions, announced that Hypercom's Artema Modular unattended payment terminal with MSC's PIN Pad API has received Interac Association Chip 2.0 PED Device Certification for use within the Interac Direct Payment (IDP) network. The new certification from Canada's leading electronic payment association means that integrators can use the device securely in all types of indoor and outdoor vending and ticketing machines, and multi-media kiosks.

The Artema Modular has already received several other international certifications including PCI PED, EMV Level 1 & 2 and ZKA and is compliant with the European Union's RoHS (Restriction of Hazardous Substances) requirements. The terminal incorporates a complex, multi-layered security system to ensure sensitive data is protected throughout the transaction, as well as a metal keypad and card reader bezel that provide top level protection against vandalism.

Hypercom Corporation and Interac Association are members of ACT Canada; please visit http://www.hypercom.com & http://www.interac.org.

10. NFC PHONES TO GENERATE $75BN WORTH OF PAYMENT TRANSACTIONS WITHIN 5 YEARS - Members Only Access

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.

11. CITI HONG KONG BRINGS CREDIT TO OCTOPUS CARD SCHEME
Source: ePaynews.com (07/25)

Citibank has teamed up with Hong Kong's Octopus Cards reward scheme to launch a combined transit, reward, contactless, and credit card. The Octopus Citibank credit card is co-branded with the established Octopus card which previously offered contactless prepaid, reward and transit.

The stored-value, rechargeable Octopus card has been issued in Hong Kong since 1997. There are now 17 million Octopus cards in circulation and 50,000 installed readers.

The 2,000 service providers which accept the Octopus card include public transport authorities, parking sites, retailers, vending kiosks, schools, and leisure facilities. The cards are also used for access control to residential and commercial buildings.

The Octopus Citibank Credit Card is the first credit card in the market with the Octopus function, Citi says. It comes in a Platinum and a Gold Card version. Automatic reload for the Octopus feature is set up on the card as a default feature.

Cardholders earn a minimum cash rebate of 0.5 percent on eligible credit card spending. This rebate is credited against reloads for the Octopus prepaid feature. The cash back is in addition to the existing Octopus rewards scheme, Citi says.

Citi Cards Canada is a member of ACT Canada; please visit http://www.citicards.ca.

12. REGISTERED TRAVELER SET TO GO NATIONWIDE - Members Only Access

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.

13. MAJOR HEALTH INSURANCE FUND AWARDS CONTRACT FOR E-HEALTHCARE CARDS TO GIESECKE & DEVRIENT
Source: ICMA Daily News (07/16)

Giesecke & Devrient (G&D) has won a contract from the German health insurer Kaufmännische Krankenkasse (KKH) and 28 corporate health insurance funds to manufacture and supply around ten million electronic healthcare cards. The delivery scope includes optical and electronic personalization of the smart cards with individual data relating to the insured persons and their insurers. G&D will also be dispatching the new insurance cards to the insured, with roll-out scheduled to start in January 2009.

The electronic health insurance card will initially store the policyholder's basic data, such as their name, address, date of birth and health insurance fund, along with details of insurance coverage and the person's status regarding supplementary charges. A photo of the cardholder provides additional protection against misuse of the card. The new smart card will in the first instance be used for electronic prescriptions and is already designed to store a qualified electronic signature that legally and technically replaces the need for users to sign by hand. This feature would make it possible for holders of an electronic healthcare card to identify themselves to authorities in areas such as e-government applications.

Insured persons have the option of ordering a "PIN Home Package" from the KKH. This contains a special card reader and software for connection to a home PC. It allows insured persons to check their current basic data or emergency information voluntarily stored on the card at any time.

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

Need to learn more about e-healthcards, identity management & government card projects?
Join us at Cardware 08 - Securing ID, September 23rd in Ottawa

14. ACONITE BUYS DATACARD'S AFFINA ENTERPRISE SMART CARD MANAGEMENT SYSTEM
Source: Wireless News Via Acquire Media NewsEdge (07/21)

Datacard Group and Aconite jointly announced that Aconite will acquire Affina Enterprise Smart Card Management System from Datacard.

Under the terms of the agreement, Datacard transfers intellectual property rights, support and development staff for Affina Enterprise to Aconite in return for an equity stake in Aconite and future royalties. Affina Issuance will remain a Datacard solution and part of Datacard Group's intellectual property; however Aconite will become an authorized distributor of the issuance side of the Affina solutions. Additionally, Datacard Group will become a global non-exclusive reseller for Aconite solutions including EMV Transaction Enabler, EMV Script Processor, Contactless PrePaid solutions as well as the Affina Enterprise Smart Card Management System.

Affina Enterprise Smart Card Management System allows issuers to manage their entire portfolio of smart chip enabled cards, down to the individual cardholder level. Affina Enterprise manages multi-application smart cards by acting as the database and system of record to track changes and overall status of issued cards. In a single application card environment, Affina Enterprise is very well suited to allow issuers to manage and track changes made to the transactional characteristics of a card, the company said.

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

15. COMPLIANCE DOES NOT GUARANTEE SECURITY - Members Only Access

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.

16. GFI SOLUTIONS CONTINUES ITS CANADIAN EXPANSION, ESTABLISHING A PRESENCE IN THE GREATER TORONTO AREA
Source: GFI Solutions (07/07)

GFI Solutions inc., announced that it has established a presence in the Greater Toronto Area with the opening of an office in Markham. Operating from this new location, GFI Solutions will be positioned to meet the needs of members of the electronic payment solutions industry based in the rest of Canada. With the boom in this sector in recent years, and particularly in light of the migration to smart cards among banks and the deployment of new payment technologies, GFI Solutions is committed to sharing its expertise in this field with the entire Canadian industry.

Under the direction of Brent Smith, Senior Regional Business Development Manager, the Markham office will focus its activities exclusively on the various aspects of electronic payment solutions, including development of applications, payment systems management, transaction platforms, and card-management systems.

GFI Solutions is a member of ACT Canada; please visit http://www.gfisolutions.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.