Stakeholders Driving Payment Evolution and Digital Identity

June 2010 ACTion Newsletter

IN THIS ISSUE

1. Editorial Comment - Collaboration and Competition: Friends or Foes?
2. ACT Canada 2010 Award Winners Announced at Cardware Conference
3. Interac Flash Introduced To Market
4. INSIDE Contactless First With Dual-Interface Processor For Interac Flash-Enabled Debit Cards
5. Asia Pacific Leads Strong Growth In Mobile Payments - Members Only Access
6. INSIDE Contactless and CPI Card Group Receive Discover Certification For Mobile Payment Sticker
7. Apps For Everyone! TD Expands Mobile Offering With Blackberry and Android Apps
8. New Jersey and New York Transit Agencies Partner With MasterCard On Tap & Go Payment System
9. Visa Improves Security For Online Transactions
10. NFC In Select Nokia Smartphones Next Year - Members Only Access
11. KDDI Selects Gemalto To Collaborate On NFC Pilot In Japan
12. YESpay To Reduce Card Fraud In The USA By Providing Merchants EMV Card Payments Services
13. CIBC To Acquire $2.1 Billion Canadian MasterCard Portfolio From Citigroup
14. Oberthur Technologies Delivers A Turnkey Issuance System For The First Georgian Electronic Passport
15. U.K. National ID Cards Scrapped Within 100 Days

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

EWA-Canada ~ member since 2004
Visa Canada ~ member since 1995

GENERAL

Apriva ~ member since 2009
Deloitte ~ member since 2007
Direct Cash ~ new member
FIME ~ member since 2006

GOVERNMENT

Royal Canadian Mint ~ member since 2005

ASSOCIATE

M. Blair Consulting Inc. ~ new member

CALENDAR OF EVENTS

Smart Card Alliance 2010 Government Event
November 16-19, 2010
Washington, DC, USA
http://www.smartcardalliance.org

CARTES & IDentification 2010
December 7-9, 2010
Paris-Nord Villepinte Exhibition Centre
Paris, France
http://www.cartes.com

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

Collaboration and Competition: Friends or Foes?

How do you compete? It's an interesting question because it relates not just to you personally, but also to how you help your organization compete. Do you work at expanding your network? Likely you do. Does your organization? Likely it doesn't.

At ACT Canada we are networked with close to 1,000 organizations and more than 5,000 individuals around the world. We are dismayed by how often organizations rely on their employees' networks while isolating themselves from both their stakeholders and competitors.

Is that because we have a flawed definition of "competition"? Do we confuse "competitor" with "competition"? I think we do and it is to our detriment.

Most of our members are competitors with other members, but they face common issues and share common needs. This is true in both the public and private sectors.

Let's take the time to redefine competition, because it is fundamentally important in any market. But having said that, many things that competitors do are not related to their competitive edge. These are areas where collaboration can help open, grow or sustain a market.

For 21 years, ACT Canada has practiced this philosophy and our members have benefitted from it. If you are not at the table, you're missing this key benefit.

2. ACT CANADA 2010 AWARD WINNERS ANNOUNCED AT CARDWARE CONFERENCE
Source: ACT Canada (06/30)

We are pleased to announce the following winners of the 2010 ACT Canada awards:

Lifetime Achievement Award - Ed Gresham

International Innovation for Banking/Finance Service - Oberthur Technologies for SmartPIN
Smart PIN is the first service anywhere that allows issuers to securely deliver card PINs via the SMS channel direct to the card holder's mobile handset

International Innovation for Banking/Finance Technology - CPI Card Group for the NFC Pilot for Vancouver Olympics
EMV personalized MicroSD's to enable Near Field Communication ("NFC") phones to US Olympic athletes. This solution uses the industry standard MicroSD interface built into the smart phones to add plug-and-pay active contactless capability to mobile devices.

International Innovation for Business Model Service - Oberthur Technologies for EMV in a Box
EMV-In-A-Box is a fully integrated EMV Migration solution and management program. It is a fully flexible turnkey solution based on Oberthur's expertise adapted to the technological framework and project criteria of the issuer.

Hero's Award - Geoff Bowen

Canadian Innovation Award for Banking/Finance Application - CPI Card Group for their Bio Degradable Dual Interface MasterCard
CPI - Canada with MasterCard has introduced a product that is compliant with all security specifications commanded by EMV standards, offers the benefits of contactless speed-of-transaction and caters to the environmentally conscious consumer in Canada.

Canadian Innovation Award for e-Transaction Application - STJ Retail for EFT Plus Lite
EFT Plus Lite is an EMV certified software solution that, when coupled with the appropriate services, will allow STJ Retail to offer a turnkey retail payments solution for multinational retailers.

Canadian Innovation Award for Mobile Application - EnStream LP for Zoompass
Zoompass is a breakthrough mobile money transfer and payment service that offers Canadians a fast and convenient way to send, receive and request money instantly and securely from their mobile phone.

Our congratulations to all the nominees and we look forward to celebrating next year's achievements.

3. INTERAC FLASH INTRODUCED TO MARKET
Source: Interac (06/17)

Interac Association, Canada's leading payment network, has successfully carried out a series of contactless debit transactions using Scotiabank debit cards and TD Merchant Services' point-of-sale terminals. The new contactless enhancement of Interac Direct Payment, called Interac Flash, increases the functionality of Interac branded debit cards by leveraging dual interface chips that give cardholders the ability to carry out a point-of-sale debit transaction using the contact or contactless feature of the card.

"The successful transactions that have taken place bring us closer to a national roll out of Interac Flash," said Mark O'Connell, President and CEO, Interac Association. "From delivering exclusive functionality to providing a strong value proposition to the market, Interac Flash is a win-win. We leveraged our intimate understanding of the Canadian marketplace to design innovative and unique contactless features that we believe will meet the needs and wants of all participants."

INSIDE Contactless developed the dual interface chips for Interac Flash. Interac Flash builds on the security of global EMV standards; existing chip debit infrastructure; strong consumer protections and other features unique to Interac Association; as well as the trusted Interac brand. The dual interface chip that will reside on Interac debit cards will allow cardholders to choose either the standard chip debit or contactless feature of the card to make everyday purchases.

"Responding to our customers' needs is important to Scotiabank, and they have told us that they want to be provided with innovative products and services to help simplify their everyday banking and shopping experiences," said Brent Currie, Managing Director, Day to Day Banking, Scotiabank.

These successful in-market transactions took place at select merchants in downtown Toronto.

"We are focused on providing superior customer service. To us that service includes providing innovation our merchants can depend on, like the option to improve their customers' check-out experience," said Jeff van Duynhoven, President, TD Merchant Services.

Interac Association will continue to work with key stakeholders through 2010 to ready the Interac Direct Payment point-of-sale extension of Interac Flash for national rollout on Interac branded debit cards in 2011.

Interac Association, INSIDE Contactless, Scotiabank and TD Merchant Services are members of ACT Canada; please visit http://www.interac.ca; http://www.insidecontactless.com; http://www.scotiabank.ca & http://www.tdcanadatrust.com/merchantservices.

4. INSIDE CONTACTLESS FIRST WITH DUAL-INTERFACE PROCESSOR FOR INTERAC FLASH-ENABLED DEBIT CARDS
Source: INSIDE Contactless (06/17)

INSIDE Contactless achieved a major milestone with the delivery of the first dual-interface debit card solution compliant with the Interac Flash specification. Scotiabank debit cards based on the INSIDE solution and TD Merchant Services' point-of-sale terminals have already been used to perform a series of successful Interac Flash transactions at select merchants in Toronto.

The Scotiabank debit cards use INSIDE's micropass 6008 dual-interface payment microprocessor with the resident Interac Flash application, allowing cardholders to pay using the contact or new contactless interface to make everyday Interac purchases. Interac Association is using the INSIDE micropass 6000 platform as the "reference chipset" to perform in-market testing and to prepare the payment ecosystem for national rollout of Interac Flash next year.

INSIDE has been working closely with Interac Association on the creation of Interac Flash, a next-generation contactless payment enhancement for the Canadian marketplace, and developed the Interac Flash application running on the micropass 6000 dual-interface platform.

INSIDE Contactless, Interac Association, Scotiabank and TD Merchant Services are members of ACT Canada; please visit http://www.insidecontactless.com; http://www.interac.ca; http://www.scotiabank.ca & http://www.tdcanadatrust.com/merchantservices.

5. ASIA PACIFIC LEADS STRONG GROWTH 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. INSIDE CONTACTLESS AND CPI CARD GROUP RECEIVE DISCOVER CERTIFICATION FOR MOBILE PAYMENT STICKER
Source: ICMA Industry News (06/03)

INSIDE Contactless and CPI Card Group announced they have received type approval from Discover Financial Services, LLC for mobile payment stickers based upon INSIDE's MicroPass 4002 contactless payment processor. Incorporating the Discover Zip payment application, the certified stickers contain all the functionality of a traditional Discover credit, debit or prepaid card, and enable Discover card issuers to offer their customers the additional convenience of using their mobile phones or other portable devices to make contactless payments anywhere using the Discover Zip standard.

Available now, the new Discover Zip mobile payment stickers are being manufactured by CPI Card Group. The stickers are delivered already pre-cut from ID1 card devices and pre-personalized to allow for personalization and fulfillment using traditional card processing equipment.

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

7. APPS FOR EVERYONE! TD EXPANDS MOBILE OFFERING WITH BLACKBERRY AND ANDROID APPS
Source: Canada Newswire (06/09)

Canadians looking for a mobile app, regardless of their choice of smartphones, should look no further. TD today announced it has launched a free TD mobile app for BlackBerry and Android devices. The new apps make TD the first financial services provider in Canada with mobile apps for the most in-demand smartphones available on the market.

"Whether you're a BlackBerry, iPhone or Android fan, we're making mobile banking convenient and comfortable for everyone," said Joan Dal Bianco, Vice President, Online Channel, TD. "Now our customers, including thousands of small business owners, can pay bills, check account balances, and find a nearby TD branch or ATM, anytime, anywhere, on any of these mobile devices."

TD is a member of ACT Canada ; please visit http://www.tdcanadatrust.com.

8. NEW JERSEY AND NEW YORK TRANSIT AGENCIES PARTNER WITH MASTERCARD ON TAP & GO PAYMENT SYSTEM
Source: ICMA Industry News (06/03)

The Metropolitan Transportation Authority (MTA), Port Authority of New York and New Jersey (PATH), NJ TRANSIT (NJT) and MasterCard Worldwide announced the launch of a six month pilot program in which MasterCard PayPass will be accepted for fare payments on select train and bus routes throughout New York City and New Jersey. The announcement enables riders of the three transit systems to purchase fares and transfer between transit systems simply by tapping a single type of contactless credit or debit card or device.

The trial, which will take place June 1 - November 30, 2010, is the first payment system to link the transit agencies, replacing the need for riders to carry specific fare cards for three separate transit systems. For example, commuters transferring from a PATH train to the New York City subway will need only one type of payment device for each ride-their MasterCard PayPass card or device-to "Tap & Go", improving the overall customer experience through increased speed and convenience.

The trial program is an extension of a successful pilot of contactless payments conducted by the MTA with MasterCard and Citigroup beginning in July 2006 when contactless readers were placed in 80 fare gates at 30 stations on the Lexington Avenue train line. During this new trial, all MasterCard PayPass cards and devices will be accepted from any issuing financial institution.

Using their MasterCard PayPass or other contactless payment-enabled card or device, riders will be able to choose from a "Pre-Fund" or "Pay-As-You-Go" fare option, and on MTA and NJT services can take advantage of existing time-based fares, such as one day, weekly, bi-weekly or monthly passes, as well as discounted fares for senior citizens, disabled and student riders.

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

9. VISA IMPROVES SECURITY FOR ONLINE TRANSACTIONS
Source: ComputerWeekly (06/07)

Visa has launched a payment card in Europe to improve security for online transactions.

The CodeSure card contains a keypad and an eight-character display for showing a one-time passcode for any Visa debit or credit card.

The company has taken the step because online transactions are more susceptible to fraud as they do not use the Pin.

Online transactions often rely on information printed on the card and hackers who have these details may be able to make a purchase online.

Visa's Verified by Visa and MasterCard's SecureCode systems provide additional security, but still rely on a static password, which is vulnerable to hacker attacks.

The CodeSure card overcomes that vulnerability by displaying a unique one-time passcode after users enter their Pin using the keypad on the card.

The CodeSure card goes beyond online banking and shopping and also allows organisations to use the card in place of other online log-in systems to access, for example, corporate virtual private networks, she said.

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

10. NFC IN SELECT NOKIA SMARTPHONES NEXT YEAR - 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. SELECTS GEMALTO TO COLLABORATE ON NFC PILOT IN JAPAN
Source: ICMA Industry News (06/16)

Gemalto announced that it has been selected by Japan's KDDI-a leading mobile communication provider with over 31 million subscribers, to provide its User Identity Module (UIM) cards and Trusted Service Management (TSM) solution for their near-field communication (NFC) program. From May to December 2010, participants in this pilot can experience various types of NFC services ranging from mobile payments, transportation services, e-driver licenses, e-ticketing, as well as information acquisition from smart posters. This trial will have participation from a wide-range of leading industries including car manufacturers, airline companies, and cinema operators.

Gemalto plays an important role in this trial, entrusted with the preparation and management of sensitive user information between KDDI and other service providers, as well as the provision of multiple mobile applications to subscribers. This NFC project will be based on international standards, complying with the GSMA's Pay-Buy-Mobile specifications. GSMA is the worldwide association of Mobile Network Operators. Japan is already the world's most advanced mobile contactless market with 18% of mobile subscribers actively using mobile contactless services; and industry experts are optimistic about quick consumer pick-up.

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

12. YESPAY TO REDUCE CARD FRAUD IN THE USA BY PROVIDING MERCHANTS EMV CARD PAYMENTS SERVICES
Source: PressReleasePoint (06/01)

YESpay International Ltd has completed the EMV chip and PIN end-to-end certification of its EMBOSS card payment service with Chase Paymentech and First Data, two major card acquirers in the USA and Canada. YESpay is now working with merchants in the USA and Canada who need to upgrade their retail POS systems to EMV chip-and-PIN card payment standards: Merchants can thus process EMV Chip & PIN cards that are being globally issued including in Canada and Mexico within USA thus stopping cross-border card fraud to migrate from Canada and Mexico to USA.

Dr Chandra Patni, CEO of YESpay International said, "We are not the only company thinking along the lines of offering EMV card acceptance in the U.S.: According to an industry article published recently (Wal-Mart to support smartcard payments, Computerworld, 21 May 2010), the retail giant Wal-Mart is reportedly planning to make all its payment terminals in its U.S. stores chip-and-PIN-capable. Such a move would definitely trigger other U.S. merchants to move to chip-and-PIN transaction processing".

It is true that the imminent EMV chip-and-PIN card rollout in the USA will certainly reveal a challenge for merchants that will have to upgrade their integrated EPOS point of sale systems to accept payments with EMV chip-and-PIN cards which YESpay can provide help in.

Through EMBOSS, merchants can fast track the implementation of integrated EMV card payments acceptance solutions for in-store and unattended payment systems, as well as enhance their websites for on-line payments with minimal capital investment and low on-going services costs. It reduces business and technical issues of outsourcing payment services and helps merchants avoid lengthy timescales and high costs of EMV certification and PCI compliance of their retail environments. Fully scalable, EMBOSS can address the needs the single location merchant as well as larger chains.

YESpay International is a member of ACT Canada; please visit http://www.yes-pay.com.

13. CIBC TO ACQUIRE $2.1 BILLION CANADIAN MASTERCARD PORTFOLIO FROM CITIGROUP
Source: Canada Newswire (06/14)

CIBC announced that it is broadening its reach in the Canadian marketplace through the acquisition of a $2.1-billion credit card portfolio from Citigroup's ("Citi") Canadian MasterCard business. Through this transaction, CIBC, which had more than $14 billion in outstanding credit card balances at April 30, 2010, will become the largest dual credit card issuer in Canada.

Citi Cards Canada and MasterCard Canada are members of ACT Canada; please visit http://www.citicards.ca & http://www.mastercard.ca.

14. OBERTHUR TECHNOLOGIES DELIVERS A TURNKEY ISSUANCE SYSTEM FOR THE FIRST GEORGIAN ELECTRONIC PASSPORT
Source: ICMA Industry News (06/23)

Oberthur Technologies delivers the issuance system of the Georgian electronic passport. The first Electronic Passport has been issued April 15th 2010.

Oberthur is supplying full end-to-end e-passport, personalization solutions. The project also includes the supply of standards and interoperable electronic passports, and consumables.

Today, there are 3 centres in Georgia (Tbilisi, Kutaisi and Batumi) fully operational to deliver electronic passports, with 5 levels of delivery depending on the emergency of the demand.

Oberthur Technologies and the Civil Registry of Georgia have been working on this project in order to offer a high secure passport to the Georgian citizens. The offer endows with the latest and best electronic passport technologies with a secure chip inside the booklet, common criteria Certified EAL4+, and fully compliant with the International Recommandations of ICAO and with the latest EU Recommendations for a secure chip inside the booklet (EAC chip) and common criteria.

Oberthur Technologies is a member of ACT Canada; please visit http://www.oberthur.com.

15. U.K. NATIONAL ID CARDS SCRAPPED WITHIN 100 DAYS
Source: ICMA Industry News (06/03)

The new U.K. government announced that it is to scrap plans for identity cards for British citizens within 100 days. The National Identity Register, the database that contains the biographic and biometric fingerprint data of card holders, would also be destroyed.

Home secretary, Theresa May said, "This bill is a first step of many that this government is taking to reduce the control of the state over decent, law-abiding people and hand power back to them. With swift parliamentary approval, we aim to consign identity cards and the intrusive ID-card scheme to history within 100 days."

Deputy prime minister, Nick Clegg said, "The wasteful, bureaucratic and intrusive ID-card scheme represents everything that has been wrong with government in recent years. By taking swift action to scrap it, we are making it clear that this government won't sacrifice people's liberty for the sake of ministers' pet projects."

The Identity Documents Bill is part of a first wave of priority legislation set out in the Queen's speech on May 25, 2010. The bill invalidates the identity card, meaning that holders will no longer be able to use them to prove their identity or as a travel document in Europe.

The government aims to have the bill passed through parliament and enacted by the parliamentary recess in August, in a move that will save the taxpayer around £86 million over the next four years, once all cancellation costs are taken into account. It would also avoid around £800 million of ongoing costs over the next 10 years, which were to be recovered through fees.

The role of the identity commissioner would also be terminated. The public panels, designed to scrutinize the identity-cards scheme, have already been disbanded.

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.