Stakeholders Driving Payment Evolution and Digital Identity

March 2008 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment
2. Profiting from Mobile Payments in Canada
3. ACI Worldwide Advances Product Strategy For Retail Payments
4. Chip And PIN Reduces UK Fraud, But Overseas Fraud Increases - Members Only Access
5. CIBC Launches New Chip Card Technology
6. Gemalto Rolls Out Electronic Social Security Program Nationwide In Algeria
7. National Bank Of Canada To Offer The PayPass
8. INSIDE Wins Visa Certification For Micropass Payment Platform
9. New Report Predicts 25 Million Will Pay By Mobile Phone In 2011 - Members Only Access
10. Infineon Sets Yet Another New Trend: Lowest-Cost Mobile Phone Platform For Internet-Based Telephony
11. CPI First To Receive MasterCard PayPass Approval For Cards Using INSIDE Micropass 4003
12. Biometric Financial Accounts Coming To India - Members Only Access
13. Cetecom And Integri Link Up And Launch New Test Solution For German Payment Market
14. Gemalto Electronic Health Cards Successfully Tested By German Authorities

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

Gemalto ~ member since 2005

GENERAL

Canadian Banknote Ltd.~ member since 2003
Integri Americas ~ member since 2006

SME

Entrac Technologies Inc. ~ new member

CALENDAR OF EVENTS

CTST
May 12-15, 2008
Orlando, FL, USA
http://www.ctst.com
CTST is the premier advanced payments and security event in the Americas, bringing together 2000+ industry professionals to discuss solutions in smart cards, pre-paid cars, mobile payments, biometrics and more. The 4-day, 6-track event is produced in association with Cards and Payments Magazine and the Smart Card Alliance. ACT Canada members receive a 10% registration discount, please contact Andrea McMullen - 1 905 426-6360 ext 24 or andrea@actcda.com.

ACT Canada is pleased to present:

Cardware 08 - Government Focused Event
June 19, 2008
Ottawa, ON, Canada
&
Cardware 08 - Financial/Merchant Focused Event
October 8 & 9, 2008
Kitchener Waterloo, ON, Canada

Exhibit & Sponsorship information will be available in the event section of our web site as of March 1st. ACT Canada members receive discounts for this event. For additional information ,please contact Andrea McMullen - 1 905 426-6360 ext 24 or andrea@actcda.com.

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (03/31)

Talking: 1 - Email: 0

This week I attended Visa Canada's third annual security symposium, as well as an Internet Law conference. I was struck by how valuable these meetings can be. It's not just the information you hear, but the sharing of ideas and the differing perspectives offered. The words, "I hadn't thought of that" or "Now that you say that, it makes me think…" are indicators of value.

It's easy for any of us to say that we can't afford the time to attend external events, but the synergies that come from a group of people with common objectives or obstacles can lead to the very outcomes we seek.

One of the statistics we heard was that up to 90% of email is spam and that is true for me. Think about what that costs you. Either you spend time updating spam filters, checking predictive spam folders for legitimate email, waiting while email downloads through spam filters or just plain paying the price of losing legitimate email that never made it to you or to the person you sent it to.

The greater price is what we lose in creative, collaborative thought; the type that happens when one person hears something and responds verbally. You just can't do that in email, in part because by the time the response reaches you, you have moved onto another task or thought and lost the thread of the conversation.

There is a place for email, but too many people no longer answer their phones, unless they see from caller ID that it is their boss or client. As a result, what could be accomplished in a 2 minute phone call takes a series of emails, sometimes spread across hours or days.

No doubt, time is the scarcest commodity we have in our day to day lives and deciding how we spend it is challenging. We've all been to meetings that accomplish little. We have all been on pointless phone calls and spent hours of a day dealing with email and text messages.

Success will be measured in how well you balance all these forms of communications. Each has a strength and weakness, so if you limit your interactions to just one or two, you will deny yourself the benefits of the others.

My thanks to Visa Canada for a remarkable day of information and interaction.

2. Profiting from Mobile Payments in Canada
Source: ACT Canada (03/31)

If you want to know:

The Canadian consumer's appetite for mobile payments
Stakeholder strategies for mobile payments: banks, credit card companies, mobile operators, handset manufacturers, merchants
Opportunities for revenue generation along the value train
Which business models are destined to survive in the Canadian marketplace
Potentially disruptive issues? Which emergent strategies will position stakeholders for success?

Contact ACT Canada to learn more about this research study, due to start soon - Eileen Cassidy at 1 905 426-6360 ext 22 or eileen@actcda.com.

3. ACI WORLDWIDE ADVANCES PRODUCT STRATEGY FOR RETAIL PAYMENTS
Source: ACI Worldwide (03/25)

ACI Worldwide, Inc announced that its BASE24-eps solution is live in more than 30 customer sites, managing electronic payment devices, acquiring transactions, and performing high-volume switching, routing and authorization services. ACI has launched a global effort to help users of its earlier products migrate to BASE24-eps, outlining release and support strategies to help customers plan their migration to ACI's next-generation solution.

BASE24-eps provides all the key functions of ACI's previous retail payment engines, deployed in a modern object-oriented style using service-oriented architecture (SOA) principles. The software features a scripting engine that allows for easy customization of business processing logic to enhance service levels or improve risk management.

BASE24-eps is available on a variety of platforms, including IBM System z. System z represents ACI's reference platform, where BASE24-eps is being fully integrated with fraud detection, settlement and other back office solutions to offer an end-to-end payments hub for retail banking. ACI's end-to-end solutions are optimized for System z to take full advantage of the platform's database, middleware and security capabilities.

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

4. CHIP AND PIN REDUCES UK FRAUD, BUT OVERSEAS FRAUD INCREASES - 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.

5. CIBC LAUNCHES NEW CHIP CARD TECHNOLOGY
Source: CNW (03/25)

CIBC announced the introduction of chip technology on CIBC Visa cards. CIBC Visa cardholders in Kitchener-Waterloo, Ontario began receiving their chip enabled credit cards as part of an industry market trial. The increased security that comes with chip technology is timely - March is the industry's Fraud Prevention Month.

The Kitchener-Waterloo market trial will give CIBC customers and employees an opportunity to use new CIBC chip cards and PINs and provide feedback on the experience. CIBC debit cards will be joining the market trial in the spring. During 2008, CIBC plans to start to roll out chip credit and debit cards to all customers. Already, all CIBC bank machines are chip enabled.

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

6. GEMALTO ROLLS OUT ELECTRONIC SOCIAL SECURITY PROGRAM NATIONWIDE IN ALGERIA
Source: SecureID News (03/26)

Gemalto announced that it has started the nationwide roll-out of Algeria's first electronic healthcare project. Following the success of the pilot phase comprising 700,000 cards in five regions, this pioneering healthcare program in Algeria is poised for nationwide roll-out over the coming two years. This timetable is in line with the deadline set by CNAS (the Algerian national health insurance authority) under the terms of the contract won by Gemalto in 2006. Gemalto is prime contractor for the program, handling end to end implementation of the system for issuing and managing the seven million smartcards used by healthcare beneficiaries and providers.

Gemalto's solution enables healthcare institutions to manage patient records securely and to verify patient benefits, while maintaining data confidentiality. For healthcare beneficiaries, this new social security smart card (known as Chifa) simplifies administrative procedures and eliminates paperwork from the submission of claims to the authorities. The high level of transaction security and faster reimbursement represent additional advantages for smartcard users.

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

7. NATIONAL BANK OF CANADA - TO OFFER THE PAYPASS
Source: ICMA Daily News (03/20)

National Bank is pleased to announce that it will integrate the contactless PayPassTM payment option into smart credit cards issued as part of a pilot project taking place in Kitchener-Waterloo, Ontario and Saint-Jerome, Quebec in 2008.

With this new feature, National Bank MasterCard cardholders will now have three payment options, depending on the technology offered by the merchant:
Contactless PayPassTM payment can be used as an alternative to cash for low-value purchases by simply tapping or brushing the credit card against a reader
Smart card technology, which enhances the security of transactions as clients must authorize the purchase by entering their personal identification number (PIN)
Merchants who do not yet offer PayPassTM or smart transactions will continue to swipe cards and ask clients to sign the sales slip, thus ensuring that cards can continue to be used wherever MasterCard is accepted.

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

8. INSIDE WINS VISA CERTIFICATION FOR MICROPASS PAYMENT PLATFORM
Source: Contactless News (03/11)

INSIDE Contactless announced it is the first to market with a Visa-certified implementation of the new Streamline Online qVSDC specification supporting the global interoperability of Visa payWave. The MicroPass 4003 contactless payment card microprocessor supports the Visa Contactless V2.0.2 AC v3 specification, and also supports backward compatibility for currently deployed Visa Contactless 1.4.2 MSD contactless personalization and acquiring infrastructures.

INSIDE Contactless continues to improve the security capabilities of its intelligent payment platforms, and the MicroPass 4003 incorporates the latest security enhancements. The MicroPass 4003 offers multiple payment brands and supports multiple applications, as well as providing the industry's fastest transaction time and outstanding read distance to deliver the most reliable cardholder experience.

The INSIDE MicroPass 4003 was designed specifically to meet multi-payment brand and multi-application requirements of contactless payment markets. As an intelligent payment platform, the native operating system incorporated into the MicroPass 4003 provides fast, secure, reliable, and flexible support for Visa payWave contactless payments, along with retail/gift card, access control, transit, ID, or other emerging applications. Flexible packaging options enable manufacturers to deploy MicroPass 4003 in a variety of form factors including cards, key fobs, and stickers for mobile handsets.

INSIDE Contactless and Visa Canada are members of ACT Canada; please visit http://www.insidecontactless.com & http://www.visa.ca.

9. NEW REPORT PREDICTS 25 MILLION WILL PAY BY MOBILE PHONE IN 2011 - 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.

10. INFINEON SETS YET ANOTHER NEW TREND: LOWEST-COST MOBILE PHONE PLATFORM FOR INTERNET-BASED TELEPHONY
Source: Infineon (03/17)

For three years now, Infineon has been marketing low-cost mobile phone chips that have given new swathes of customers around the globe the chance to use phones for the first time. These innovative chips pack all the key functions onto a tiny piece of silicon. More than 50 million units had been sold by the end of last year, allowing users to make phone calls within GSM mobile networks. The problem was that call charges varied considerably depending on the country and provider. Today, Internet-based telephony (Voice over IP) is much cheaper. Up to now, however, the sophisticated technology needed for this application was only available on expensive high-end phones known as smart phones. In collaboration with Atheros, the American wireless and wireline broadband technology specialist, Infineon has therefore developed a chip platform that for the first time gives users the best of both worlds. The low-cost chip from Infineon takes care of all telephony functions in the GSM network, while the Atheros chip kicks in when data packets are used via a wireless LAN (hotspot or WiFi) for voice or data traffic over the Internet. Better still, the whole package is available at an attractive flat rate.

"The combination of our GSM chip and the wireless LAN chip from Atheros gives even more people the chance to enjoy low-cost communication," says Dominik Bilo, Senior Vice President Sales and Group Marketing at Infineon's Communication Solutions Division. "For the foreseeable future, broadband landline networks will not deliver full coverage in emerging countries such as India, China and parts of South America. By comparison, a wireless LAN and a couple of hotspots or a wireless IP cell for a small village can be set up relatively quickly and inexpensively. Billions of people can then plug into the world of unlimited communication."

Independent market researchers see significant growth opportunities for the combination of GSM and VoIP technology in mobile phones. Some 186 million units are slated to be sold this year alone, and forecasts put the figure for 2010 at 250 million units.

Infineon's contribution to the new GSM/VoIP phones is its X-GOLD™101 single chip, which packs the core functions of a mobile phone - voice processing, radio frequency management, power management, memory and so one - into a footprint of just 8 mm x 8 mm. Atheros adds its 10 mm x10 mm ROCm™ (radio-on-chip for mobile) chip. This chip too is optimized to deliver maximum functionality while minimizing power consumption. Compared to conventional solutions, Atheros halves the number of components needed for innovative wireless VoIP communication.

Infineon is a member of ACT Canada; please visit http://www.infineon.com.

11. CPI FIRST TO RECEIVE MASTERCARD PAYPASS APPROVAL FOR CARDS USING INSIDE MICROPASS 4003
Source: Contactless News (03/26)

CPI Card Group has received approval from MasterCard to produce PayPass cards using the new MicroPass 4003 intelligent payment platform from INSIDE Contactless. T0hese new contactless payment cards meet the MasterCard Mag Stripe Technical Specification version 3.2 and are available for immediate card production orders from bank card issuers and bureaus. The CPI MicroPass 4003 has already received the MasterCard PayPass Letter of Approval and Chip Assessment Security Testing (CAST).

Bob Clarke, CPI's Vice President of Sales and Marketing said, "INSIDE's certifications for its MicroPass 4003 were a tremendous help to us in obtaining final approvals from MasterCard to produce these cards, and our customers will also appreciate the superior cardholder experience made possible by the MicroPass 4003."

CPI Card Group and INSIDE Contactless are members of ACT Canada; please visit http://www.cpicardgroup.com & http://www.insidecontactless.com.

12. BIOMETRIC FINANCIAL ACCOUNTS COMING TO INDIA - 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. CETECOM AND INTEGRI LINK UP AND LAUNCH NEW TEST SOLUTION FOR GERMAN PAYMENT MARKET
Source: Integri (03/04)

Integri and CETECOM ICT Services announce a collaboration and launch joint solution for the functional testing of German Network Service Providers (NSP).

With the GICC NSP Test Suite, German Network Service Providers can test a correct data exchange of their GICC1 connection to acquirers such as First Data, Citibank, American Express and B+S. Acquirers accept or refuse credit card transactions at stores and point-of-sales and it is therefore imperative that connections between the different players are running faultless. To guarantee optimal functioning, acquirers have defined host type approval test cases to which network operators should comply.

CETECOM will use the PC-based tool in their test laboratory to certify German network service providers prior to connection to an acquiring host. The Network Service providers can use the tool's acquirer host simulator to prepare for official approval tests in laboratories such as CETECOM. Zentraler Kreditausschuss (ZKA), the German Bank Association, which is responsible for regulating electronic payment applications in Germany, qualified the test bench.

The solution, onto which CETECOM ICT Services built the respective test suite for the GICC NSP Testing, is based on Integri's open INQ platform and thus customizable and future-proof. The simulator is adaptable and can be configured to any specific requirements. Besides, more than 1000 possible test scenarios, covering all possible circumstances, are readily available and included. Additionally, it is easy to run a test environment in automated mode ensuring a considerable gain of time. Integri has developed the simulator whilst CETECOM built the different host type approval test cases.

Integri is a member of ACT Canada; please visit http://www.integri.com.

14. GEMALTO ELECTRONIC HEALTH CARDS SUCCESSFULLY TESTED BY GERMAN AUTHORITIES
Source: Gemalto (03/27)

Gemalto announced that its German electronic health cards have been successfully tested in pilot regions. Taking place in different regions of Germany, these trials test the infrastructure and components of the Gemalto solution before the nation-wide roll out in 2009.

The implementation of the smart health card is actually the most important project for the modernization of the public health system in Germany and also the largest project based on Public Key Infrastructure (PKI) technology in the world. It involves 80 million patients, 188.000 doctors and dentists, 2,200 hospitals and 21,000 pharmacies.

Gemalto was awarded the tender by AOK in July 2007 to supply and personalize 35 million e-health cards for their insured in Germany.

The pilot region of Ingolstadt in Bavaria is one of seven regions in Germany in which tests started to check the interrelation of the e-health card (eGK) with other components of the extensive telematic infrastructure. In this test in Ingolstadt, up to 10.000 insured, 30 doctors, 16 pharmacists and two hospitals are actually participating and the tests run through several phases. The e-health card in combination with the doctor's health professional card works as a key function once the eGK enables the access to medical data securely stored in the system. Thanks to the e-health card, the German health system will be updated with the latest information and communication technology.

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