Stakeholders Driving Payment Evolution and Digital Identity

April 2010 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment - Are Payments Really Global?
2. Canadian Government Tables New Code Of Conduct For Payment Cards
3. Canada To Get ePassports In 2012
4. 100,000 TD Customers Have An "App"Etite For Mobile Banking
5. Starbucks, Target Buck NFC In Mobile Payments - Members Only
6. VanCity Selects Xpressi Instant Card Issuance Solution From NBS Technologies
7. Hypercom Has Broad Plans For iPhone POS Payment Device
8. Open NFC API For Android(Tm) Now Available
9. TTC May Opt For 'Open' Electronic Fare Payment System
10. Apple's Mobile-Pay Vision Cuts Banks Out Of The Picture - Members Only
11. Alberta Looks At Biometric IDs For Homeless
12. Cash No Longer King - Cards Rule High St
13. Pakistan Eyes Smart IDs That Double As Debit Cards
14. Cards Touted For Redeeming Mobile Coupons - Members Only

ACT Canada Partners

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.

 Visa

Visa operates the world's largest retail electronic payments network and is one of the most recognized global financial services brands. Visa facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities.

ACT CANADA THANKS OUR NEW & RENEWING MEMBERS

PRINCIPAL

Chase Card Services ~ member since 2009

GENERAL

Capital One ~ member since 2008
CPI Card Group ~ member since 1999

SME

Moneycell ~ new member

GOVERNMENT

Ontario Financing Authority ~ new member

ASSOCIATE

Lifecycle Integrity ~ member since 2005

CALENDAR OF EVENTS

Smart Card Alliance 2010 Annual Conference
May 17 - 20, 2010
The Camelback Marriott Resort and Spa
Scottsdale, AZ, USA
http://www.smartcardalliance.org

B2PS/Collis Open EMV Training
May 26-27, 2010
Visit http://www.b2ps.com/training2.html
ACT Canada members receive a 15% discount

Cardware 2010: Payment Insights
ACT Canada presents Cardware 2010: Payment Insights
June 22-23, 2010
Sheraton Fallsview, Niagara Falls, ON, Canada
50% of the booth space is now reserved
http://www.actcda.com/calendar

1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (04/29)

Are Payments Really Global?

These days I think nothing of leaving for an extended trip with nothing more than credit and debit cards in my wallet, but I can remember when it wasn't that easy. As a young consultant, I had to get an expense cheque, cash it at the bank and carry that cash with me. I wouldn't want to go back to that.

But, that doesn't answer the question. Some payments are intrinsically global; for example, major credit cards. Others are global, but only after you have taken a step to convert it for use in another country, such as cash and traveler's cheques. Both of these scenarios could change because of chip.

If the US does not move to EMV standardized chip, other countries will have to make decisions about continuing to accept magnetic stripe based cards. Will the rest of the developed world settle for a risk model that accommodates mag, or will they consider a chip only model, leaving US card holders at a disadvantage when they travel?

On the other hand, will chip change cash, allowing the power of the chip to handle foreign conversion at the point-of-sale?

I've just returned from a conference in the states, where I heard two options for payment. The first was to bypass chip by equipping all cell phones with a bar code image that could be displayed and read by a scanner when you want to trigger a payment. The second was to have a mag stripe on both sides of the card to increase storage space that could be used for security.

There are already more than 944 million EMV cards deployed globally. To consider that financial institutions around the world would abandon these standards and the investment made by all the stakeholders, to pursue another global standard, is beyond my imagination. I can only believe that we will move forward and leverage chip to provide applications that go beyond secure payment. Whether those chips will be embedded in plastic, cell phones, fobs or even jewelry remains to be seen. Join us for a lively discussion on these and other issues at Cardware 2010: Payment Insights.

2. CANADIAN GOVERNMENT TABLES NEW CODE OF CONDUCT FOR PAYMENT CARDS
Source: ICMA Industry News (04/26)

The Honorable Jim Flaherty, Minister of Finance, released a Code of Conduct for the credit and debit card industry in Canada, which promotes fair business practices and ensures that merchants and consumers understand the costs and benefits associated with credit and debit cards.

"Businesses have voiced real concerns about the lack of choice they have had in accepting debit and credit card payments, and about the costs involved. These added business costs are borne by merchants and may be passed onto consumers, which makes this an issue of importance to all Canadians," said Minister Flaherty. "The Code of Conduct encourages choice and competition. It gives merchants the freedom to choose which card networks they use, helps them control their costs, and allows them to pass on savings to their customers."

Under the Code, merchants will be:

  • Provided with clear information regarding fees and rates.
  • Given advance notice of any new fees and fee increases.
  • Able to cancel contracts without penalty should fees rise or new fees be introduced.
  • Given new tools to promote competition, and in particular, will have the freedom to accept credit payments from a particular network without the obligation to accept debit payments and vice versa.

The Code of Conduct is the result of extensive consultations with merchant and consumer associations, debit and credit card networks, payment processors and credit card issuers across Canada. The credit and debit card industry will have until May 17, 2010 to review and adopt the Code of Conduct.

"Payment card networks, credit and debit card issuers, and payment processors are now being invited to adopt this Code," said Minister Flaherty. "We are confident that they will do so voluntarily. Our Government has, however, taken steps in Budget 2010 to ensure that we have the legislative authority to regulate the industry if necessary."

"The Government has listened to the concerns of Canadian merchants and consumers," said the Honourable Josée Verner, Minister of Intergovernmental Affairs, who joined Minister Flaherty for the announcement. "The Code will help ensure accountability; prevent unfair business practices in the credit and debit card market; and help protect businesses from rising costs that may be passed onto consumers."

On March 29, 2010, the Government introduced legislation in Parliament to implement certain provisions of the Budget. The legislation enacts the Payment Card Networks Act, which would give the Minister of Finance the power to regulate the market conduct of the credit and debit card networks and their participants, if necessary.

Legislation tabled would also expand the mandate of the Financial Consumer Agency of Canada to supervise payment card network operators to monitor their compliance with the Code of Conduct and with any regulations introduced under the new Act.

3. CANADA TO GET EPASSPORTS IN 2012
Source: SecureID News (04/08)

Passport Canada has announced plans to launch contactless ePassports by 2012, according to cbc.ca.

The new passports will come embedded with an electronic chip bearing information about the traveler, including name, gender, date and place of birth, and even a digital portrait of his or her face.

Canadians will also be given the option of receiving a passport valid for ten years, instead of the traditional five.

Passport Canada is asking citizens to fill out an online questionnaire on its website by May 7 in order to aid in the development of the new passport and its fees.

4. 100,000 TD CUSTOMERS HAVE AN "APP"ETITE FOR MOBILE BANKING
Source: Canada Newswire (04/26)

Since the launch of the TD mobile app for iPhone and iPod touch devices, the app has been averaging more than 10,000 downloads per day.

"In just over a week, more than 100,000 customers are now ready to bank on the go, wherever and whenever they want," said Joan Dal Bianco, Vice President, Online Channel, TD. "The TD mobile app not only allows customers access to everyday banking at their fingertips, but also delivers the ease and convenience to contact TD Waterhouse to get a quote, place a trade or to reach TD Insurance for help with insurance needs."

Launched on April 14, 2010, the TD mobile app gives personal and small business banking customers the ability to securely bank on-the-move, and insurance and wealth management clients the ability to easily contact TD all through one app. In addition, a North American TD Locator makes it easy to find TD in both Canada and the U.S. - where customers can access their TD accounts without incurring any ATM fees at more than 5,000 TD ATMs on both sides of the border.

TD is a member of ACT Canada & TD Merchant Services is a Cardware 2010 sponsor; please visit http://www.td.com.

5. STARBUCKS, TARGET BUCK NFC IN MOBILE PAYMENTS - 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.

6. VANCITY SELECTS XPRESSI INSTANT CARD ISSUANCE SOLUTION FROM NBS TECHNOLOGIES
Source: NBS (04/30)

NBS Technologies announced that Vancouver City Savings Credit Union (Vancity) has selected NBS' instant issuance solution, Xpressi™ software, for deployment to their branch network.

"Xpressi instant card issuance solution from NBS Technologies will enable Vancity to be the first financial institution in Canada to instantly issue Chip & PIN cards to its members right at the branch," says Ramesh Ajitaprasad, General Manager, UbiQ Software, NBS Technologies' software design business unit.

Xpressi remote and branch issuance software is the NBS software solution enabling financial institutions to issue credit and/or debit (magnetic stripe, contact and contactless) instantly at the branch. Offering flexibility and ease-of-use with the assurance of centralized data security, Xpressi software coupled with Javelin printers achieves the complete instant issuance solution. However, Xpressi software is so flexible and user-friendly that it can be implemented with embossers or thermal desktop printers from any major card printer manufacturer.

"Our challenge was to implement an instant issuance solution that would integrate with our existing banking system as well as keep our current process in the issuance of debit cards at our branches," said Catherine Boivie, Senior Vice President IT at Vancity and CEO of Inventure Solutions. "After conducting a thorough vendor comparison, our search led us to the Xpressi solution from NBS Technologies."

NBS is a member of ACT Canada and an exhibitor at Cardware 2010; please visit http://www.nbstech.com. VanCity is a member of ACT Canada; please visit http://www.vancity.com.

7. HYPERCOM HAS BROAD PLANS FOR IPHONE POS PAYMENT DEVICE
Source: ISO & Agent Weekly (04/21)

Hypercom Corp. plans to use its new point-of-sale products for use with Apple Inc.'s iPhone not only to reach mobile merchants but also to target brick-and-mortar retailers that want to expedite client purchases and avoid long lines at sales registers, Stuart Taylor, Hypercom vice president of global solutions and marketing, told ISO&Agent.

The SmartPayments Mobile devices feature card swipes and attach to iPhones. Hypercom introduced the product line April 13.

The "sole proprietor business" that traditionally found accepting payment cards cost prohibitive can benefit from lower-cost, smartphone-enabled payment devices, and "then there is higher-end retail and customer service" where opportunities exist for "line busting," Taylor said.

Line busting typically involves retail employees with handheld wireless devices scanning bar codes on merchandise and accepting card payments. With line busting, customers do not have to visit the traditional checkout area and can avoid waiting in line to pay for their merchandise.

Hypercom intends to begin shipping the two SmartPayments Mobile devices in June.

Both SmartPayments Mobile products include a Payment Card Industry Data Security Standard-certified and encrypted card reader. One device, SmartPayments MobilePlus, includes a barcode scanner merchants may use to scan inventory and other forms of barcode information. The other, SmartPayments MobilePro, includes the card reader but not a barcode scanner.

"The barcode scanner is a big advantage" for merchants, said Taylor.

Both models include payment-data encryption, a built-in rechargeable battery, e-mail receipt capabilities and an opening in the product case for the iPhone camera lens. Both also encrypt all magnetic stripe card information immediately at card swipe.

Hypercom is selling the devices through its bank acquirer and ISO partners and directly to merchants, and it will direct merchants without existing merchant accounts to different payment processors, according to the company.

Hypercom will route transactions from SmartPayments Mobile devices through the company's SmartPayments Server to a credit card processor for authorization and settlement.

While no one is certain about the size of the mobile-merchant market, which may include plumbers, electricians or home-based salespeople, it exists, and it is "untapped," said Taylor, noting the iPhone increasingly is becoming a business tool.

Hypercom is a member of ACT Canada & an exhibitor at Cardware 2010; visit http://www.hypercom.com.

8. OPEN NFC API FOR ANDROID(TM) NOW AVAILABLE
Source: Marketwire (04/20)

NXP and Trusted Logic announced the release of an open source NFC Android API. This will enable mobile phone users to access a new range of contactless applications such as mobile payments, transport and event ticketing as well as data sharing directly from their Android phones.

NXP and Trusted Logic pioneered the integration of NFC technology into Android with the first versions implemented and showcased already last year. The companies are now leading the open source community to define an industry standard for the integration of NFC technology within Android. Opening this API to the community will enable application and service providers to develop their NFC applications with a standard framework as they did with the JSR 257 specification. This will drive the creation of compelling NFC applications by handset manufacturers and independent application developers alike.

The API has been released following consultation with various eco-system partners, including mobile network operators, handset manufacturers and NFC controller providers.

A second-generation NFC Android stack based on this Open NFC API is now available from NXP and Trusted Logic. It provides a complete integration into the Android framework, comparable to the Bluetooth & Wi-Fi services already integrated in Android.

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

9. TTC MAY OPT FOR 'OPEN' ELECTRONIC FARE PAYMENT SYSTEM
Source: IT Business.ca (04/19)

While participating in a Greater Toronto Area (GTA) electronic fare pilot, the Toronto Transit Commission (TTC) seems to be eyeing a different payment system from the rest of the region.

In a statement, chair Adam Giambrone announced a TTC-hosted public information session this week on an a proposed open payment fare-collection system. Instead of the traditional fare card, the system "will allow transit riders to use credit or debit cards - even cell phones - at the turnstile or fare boxes." However, a prepaid card will also be available for riders who prefer not to use their personal cards, the statement said.

Many will welcome the TTC's move as a long-overdue step towards phasing out antiquated token and ticket fares, and modernizing the payment system.

But at least one Toronto-based technology analyst doesn't believe the change is a good one.

Reinventing the wheel - The TTC is leaning towards an electronic fare system at odds with the rest of the GTA, noted Rob Burbach, senior analyst at IDC Financial Insights', Toronto-based IDC Canada's financial advisory service. Burbach is an expert on mobile payment systems. "Why does the TTC need to reinvent the wheel?" the analyst asked. He noted that the rest of the GTA is using an integrated system - the Presto card. By implementing a different system the TTC would introduce unnecessary cost and complications, Burbach warned. "Going with another system would be a poor use of tax payers' money."

It would also negate the advantages of a seamless inter-regional contactless payment system, he said. "Rather than zipping through municipalities using one card, a rider might be required to use another payment device for Toronto."

10. APPLE'S MOBILE-PAY VISION CUTS BANKS OUT OF THE PICTURE - 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. ALBERTA LOOKS AT BIOMETRIC IDS FOR HOMELESS
Source: SecureID News (03/29)

The Canadian province of Alberta has been looking into the possibility of issuing biometric identification cards to its homeless citizens to improve their ability to better their lifestyle, according to a Calgary Herald article.

Housing Minister Jonathan Denis cites the homeless population's inability to obtain bank accounts as a good reason why such ID cards could be a help to them. Additionally, Service Alberta Minister Heather Klimchuk added that such an ID would enable social workers to vouch for their clients' identities and enable the card holder to list a homeless shelter as a proxy address.

The modes the Alberta government has been discussing include fingerprint and facial scans as well as including a photograph on the card. The news, having reached the homeless community in Alberta, is receiving mixed responses with some expecting such a card to ease their lives significantly, some others citing fingerprint scanners being unable to detect their worn fingerprints and still others railing against it as measures such as biometric data collection are not required to receive other government IDs like driver licenses.

12. CASH NO LONGER KING - CARDS RULE HIGH ST
Source: Sky News (04/18)

It seems carrying cash around is becoming more unpopular than ever as it's predicted only half of all transactions in 2015 will be made using coins and notes.

The Payments Council studied payment trends between 1999 and 2009 and has concluded that cash is "king no more".

It found payments made by cash slumped from 73% to 59% over the ten-year period.

The debit card has emerged as the most popular way of paying - quadrupling to £264bn last year.

The report also confirmed that credit card usage is dropping and cheques are declining at an increasingly fast pace.

The council predicted in 1999 that just over one billion cheques would be used by individuals in 2009, but the figure actually fell to 577 million.

The study showed around 21 billion consumer payments were in cash, but 80% of those were below £10.

But for regular commitments, such as bills, cash has plummeted from 19% of all payments in 1999, to 9% last year.

"Paying for things is more secure and more convenient now we don't have to keep replenishing the stock of paper and metal we drag around," said the council.

The council says in the future we will be using contactless cards, which allow people to pay for goods worth up to £15 without having to use a PIN number.

There are eight million cards in the UK that allow contactless payment, but this is expected to grow to 30 million by 2012.

"By 2050, contactless could well be the norm, but it is unlikely to be on a plastic card and could very well be on a mobile phone," said the report.

13. PAKISTAN EYES SMART IDS THAT DOUBLE AS DEBIT CARDS
Source: ICMA Industry News (04/26)

Ali Arshad Hakeem, the chairman of Pakistan's National Database and Registration Authority (NADRA), announced plans to issue smart ID cards that would double as contactless ATM and debit cards.

The announcement to add payment capabilities via smart chip to Pakistan's Computerized National Identity Card (CNIC) came at the inaugural session of the Pakistan Branchless Banking Conference at SBP Learning Resource Center.

14. CARDS TOUTED FOR REDEEMING MOBILE COUPONS - 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.

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.