Engaging, Enabling and Evolving Commerce in Canada since 1989

November-December 2010 ACTion Newsletter

IN THIS ISSUE

1. Editorial - Mobile Payment - 15 years later
2. Mobile Market Brief Released by ACT Canada's Mobile Strategic Leadership Team
3. Scotiabank & RBC First to Put Interac Flash in Customers' Wallets
4. CPI Card Group Breaks a Record This Month Producing Its 100 Millionth Contactless Card
5. Global M-Payments Market to Reach $264.8 Billion by 2015 - Members Only Section
6. Gemalto Launches Payment Card with Online Banking Security Functionality
7. Visa Paywave to Pump Up Speed & Convenience at Petro-Canada Locations
8. Banks Have Complete Control of Card Personalization & Management with Online Service Platform from G&D
9. Interac Debit on the Menu at Tim Hortons
10. Why Wait? Mobile Payments Move Ahead Without New Hardware - Members Only Section
11. Canadian Tire Customers Can Now Scan Barcodes with Smartphones to Access Product Information & More
12. Capital One Acquires GE Capital's Hudson's Bay Company Card Business
13. Verifone to Acquire Hypercom
14. China Mobile Commercially Launched Mobile Proximity Payment Using SIMpass Technology
15. NXP's MiFare to Add NFC Support to SIMS
16. New Display Cards from G&D Offer Enhanced Security for Online Banking & Online Payments
17. Next Year's BlackBerries will be NFC-Equipped

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

SME

Payments Business ~ new member

CALENDAR OF EVENTS

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 (11/29)

Mobile Payment - 15 years later

Before EMV was ever talked about in Canada, way back when we called them "smart" not "chip" cards, many enthusiasts told me we would never use chip for payment, but would go straight to mobile.

I heard the same last month in the US. Mobile payment offers a rich future and enthusiasts are passionate about its potential. I, too, believe in the inevitability of mobile commerce and payment, but I don't believe it will eliminate other form factors, nor do I believe we will see global adoption in the near future.

I believe that great work is being done on both technical and business issues. I believe we are making progress and am pleased that ACT Canada has brands, issuers, carriers and now merchants at the table discussing issues and opportunities unique to the Canadian market.

Over the past 15 years, technology has not been the impediment. Relationships and business issues are still the roadblocks, so I encourage you to join in the dialogue. Bring your enthusiasm and a desire to collaborate. This only works when there is a win-win scenario for all the stakeholders. Contact us for more information on our Mobile Strategic Leadership team.

We know that there is a market for mobile. Over 15 years that market has grown far faster than the progress in stakeholder engagement. Let's change that!

2. MOBILE MARKET BRIEF RELEASED BY ACT CANADA'S MOBILE STRATEGIC LEADERSHIP TEAM
Source: ACT Canada (11/30)

The mobile commerce landscape continues to mature and several major announcements over the past year suggest the pace of change is heating up. The industry press is full of stories about mobile commerce solutions targeting digital content, mobile banking and bridging the digital and physical worlds, allowing consumers to pay for real goods and services using their mobile device.

Executives in the telecom, payments, and retail industries are all looking at ways to adjust their strategies as it is clear that significant changes are imminent for their markets. Like it or not, many of the incumbent players are going to find that they will no longer be able operate in the same capacity as they have in the past and that new, technologies will potentially bring with them a host of new market entrants.

This brief describes some of the potentially disruptive forces that are positioned to impact the mobile market and a summary of the threats and opportunities associated with each. Managers of affected companies need to consider what the near future will bring in the mobile commerce space and in order to best position their products and services in the new mobile world. This document was jointly compiled by members of the ACT Canada Mobile Strategic Leadership Team (MoSLT) and is part of the library of work completed by ACT Canada's MoSLT, whose mandate is to advance mobile commerce in Canada and abroad.

This report is available to ACT Canada Members in the Members Only section of the ACT Canada web site - MoSLT_Market_Brief.pdf.

3. SCOTIABANK & RBC FIRST TO PUT INTERAC FLASH™ IN CUSTOMERS' WALLETS
Source: ICMA Industry News (11/17)

Interac Association announced that Scotiabank and RBC will be the first banks to add Interac Flash, the new contactless enhancement of Interac Debit and Canada's first contactless debit payment option, to their customers' bank cards in summer 2011. Interac Flash gives cardholders the choice of paying for smaller value items faster than ever before by simply 'flashing' an Interac chip debit card at a reader that supports Interac Flash, rather than inserting the card and entering a PIN. This increased speed also helps merchants improve customer throughput at point-of-sale by spending less time processing payments, particularly handling cash.

"We are extremely pleased that Scotiabank and RBC have committed to offering Interac Flash to their customers," said Mark O'Connell, president and CEO, Interac Association. "With Interac Flash, we are putting Canada's first contactless debit solution in the hands of customers and bringing a new value proposition to market. The decisions by Scotiabank and RBC represent strong endorsements of Interac Flash."

This innovative new enhancement to Interac Debit allows cardholders to choose either the standard chip Interac Debit or the contactless Interac Flash feature of their bank card to make everyday purchases using funds withdrawn directly from their bank account. Interac Flash builds on the security of global EMVTM standards; existing chip debit infrastructure; strong consumer protections and other features unique to Interac Association; as well as leveraging the trusted Interac brand. Cardholders are protected from unauthorized transactions under Interac's existing Zero Liability Policy and merchants continue to receive the benefits of secure and non-refutable transactions associated with PIN-based Interac Debit.

"Interac Flash is a welcome and needed addition to the Canadian retail marketplace," said Diane J. Brisebois, president & CEO of Retail Council of Canada. "Merchants will now be able to provide customers with a faster and more convenient check-out experience while reducing the costs of handling cash. Interac Flash is also an economical payment solution, providing a win-win for merchants and their customers across Canada."

Following a series of successful in-market Interac Flash trials that have taken place in Toronto, TD Merchant Services will be providing merchants with the choice of Interac Flash starting early in 2011. "Merchants participating in the trial told us that Interac Flash is value-added innovation that they can rely on to help improve their business operations and customer experience," said Jeff van Duynhoven, president, TD Merchant Services.

Interac, Scotiabank and TD Merchant Services are members of ACT Canada; please visit http://www.interac.ca, http://www.scotiabank.com & http://www.tdmerchantservices.com.

4. CPI CARD GROUP BREAKS A RECORD THIS MONTH PRODUCING ITS 100 MILLIONTH CONTACTLESS CARD
Source: ICMA Industry News (11/24)

CPI Card Group announced the production of the 100 millionth contactless card in its Colorado facility. Demand for contactless cards in the financial payment card market has increased significantly over the past several years. For retailers or merchants, contactless cards offer lower costs and faster transaction time. Leading financial brands such as Visa, MasterCard and Discover have adopted contactless payment technology to offer increased security, convenience and speed for consumers when making purchases. CPI Card Group is the largest global manufacturer of contactless cards and is a leader due to the investment made years ago in automated systems and contactless smart chip technology.

CPI Card Group has delivered contactless cards for the leading financial payment card issuers in the U.S. and Canada including Barclays, U.S. Bank, Capital One and others.

CPI Card is a member of ACT Canada; please visit http://www.cpicardgroup.com.

5. GLOBAL M-PAYMENTS MARKET TO REACH $264.8 BILLION BY 2015 - 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. GEMALTO LAUNCHES PAYMENT CARD WITH ONLINE BANKING SECURITY FUNCTIONALITY
Source: Gemalto (11/10)

Gemalto launched the industry's first credit card to combine one-time password security capabilities with standard payment. This innovation allows banks to provide a single card that delivers both payment and increased security for online transactions. The new Gemalto Ezio product is immediately available in the United States.

The card's online secure password feature is activated by pressing a button on the face of the card. A one-time code is digitally generated and displayed. The card becomes a second factor of authentication, allowing the user to enter this unique and non-reusable numeric code on a Web page, in addition to their user name and password.

As part of the solution, Gemalto provides a turnkey platform that is plug and play with existing banking systems, for online verification. The server verifies user authentication for online transactions and account access. Products within Gemalto's Ezio eBanking security range are already being used by over half a million online customers globally.

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

7. VISA PAYWAVE TO PUMP UP SPEED & CONVENIENCE AT PETRO-CANADA LOCATIONS
Source: Scottrade (10/29)

Visa announced that Petro-Canada, a Suncor Energy business, has joined a growing roster of Visa payWave contactless payment enabled merchants. Canadians will soon be able to purchase gas and other items at Petro-Canada locations by simply waving their Visa payWave-enabled chip card in front of a contactless terminal.

All paypoints - including gas pumps and in-store check-out counters - at Petro-Canada's approximately 1,500 locations across Canada will be equipped with Visa payWave enabled terminals by late December 2010. All Greater Toronto Area Petro-Canada locations will be equipped with Visa payWave by the end of October 2010.

Suncor Energy and Visa Canada Inc are members of ACT Canada; please visit http://www.suncor.com & http://www.visa.ca.

8. BANKS HAVE COMPLETE CONTROL OF CARD PERSONALIZATION & MANAGEMENT WITH THE ONLINE SERVICE PLATFORM FROM G&D
Source: Giesecke & Devrient (11/29)

The Convego Service Online Portal from Giesecke & Devrient (G&D) enables banks to provide a better debit and credit card service to their customers. Financial institutions can use the online platform to check the processing status of cards, ascertain the current stock position and actively control production processes (e.g. canceling cards) quickly and simply at any time. This gives banks complete control of the personalization process. The online service platform is an open, non-proprietary solution to which non-G&D personalization centers can also connect.

In addition to security and quality, the service delivered is an increasingly important factor for payment products. For example, the end customer may want to have a particular design on their card. Or they urgently need a new credit card and are given preference as a VIP client. The bank will need to know the current processing status of card personalization, whether the personalization center has already sent out the finished card and how many card bodies are still in stock.

The online service platform functions independently of G&D, which means that non-G&D personalization centers can also connect to the portal. The advantage for banks is clear: They now only need one central system to retrieve and process status information on all aspects of card personalization.

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

9. INTERAC DEBIT ON THE MENU AT TIM HORTONS
Source: Canada Newswire (11/23)

Canadians can now benefit from the convenience and flexibility of paying with their Interac debit cards at approximately 90 per cent of Tim Hortons' over 3,000 Tim Hortons restaurants nationwide. Tim Hortons' customers in Ontario, Québec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador now have the choice to use Interac Debit when purchasing their favourite Tim Hortons items in restaurants and at drive-throughs that offer electronic payments. Interac Debit has been accepted at participating restaurants in Western Canada since 2003.

"Canadians enjoy the convenience and simplicity of making everyday payments using funds directly withdrawn from their bank account with Interac Debit, and now they have more opportunity to do so at one of Canada's favourite restaurants, Tim Hortons," said Mark O'Connell, President and CEO, Interac Association. "With Tim Hortons' expansion of Interac Debit acceptance, customers will no longer need to worry if they have cash in-pocket when they buy their morning coffee, breakfast wraps for the kids after hockey practice or donuts for the office."

"Tim Hortons' hospitality focuses on continuous improvement and fast, friendly service, whether it's new product innovation or the introduction of new payment methods such as Interac Debit," said Roland Walton, Chief Operations Officer, Tim Hortons. "Tim Hortons is proud to partner with a world-class Canadian payment network like the Interac network to bring more value and the speed and convenience of debit payments to Canadians coast to coast."

Interac is a member of ACT Canada; please visit http://www.interac.ca.

10. WHY WAIT? MOBILE PAYMENTS MOVE AHEAD WITHOUT NEW HARDWARE - 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. CANADIAN TIRE CUSTOMERS CAN NOW SCAN BARCODES WITH SMARTPHONES TO ACCESS PRODUCT INFORMATION & MORE
Source: Canada Newswire (11/29)

Canadian Tire launched a free mobile application (app) for iPhone, BlackBerry and Android smartphones which allows customers to scan product barcodes in stores and instantly access product information including price, reviews and availability. Customers can also locate the nearest Canadian Tire store, based on their current location, search for products on canadiantire.ca and browse the Canadian Tire flyer on their smartphones.

Developed by Simply Good Technologies, the Canadian Tire mobile app combines the best of image capture and upload capabilities, and GPS location mapping to allow smartphone users to:

Locate the nearest Canadian Tire store based on their current location
Search for products, information and pricing currently available on canadiantire.ca
Use barcode scanning to instantly access a wide array of product-specific information
View the Canadian Tire weekly flyer, and current sales and discounts

Canadian Tire is a member of ACT Canada; please visit http://www.canadiantire.ca.

12. CAPITAL ONE ACQUIRES GE CAPITAL'S HUDSON'S BAY COMPANY CARD BUSINESS
Source: Capital One (11/09)

Capital One Canada and GE Capital Retail Finance announced a definitive agreement under which Capital One Canada will acquire and service GE Capital's Hudson's Bay Company credit card portfolio and related assets, with outstanding receivables of approximately $1.3 billion USD.

"Hudson's Bay Company's storied and trusted brand makes it an attractive partner for Capital One as we seek to expand our suite of credit card products in Canada," said Rob Livingston, Capital One Canada's President. "This is a compelling opportunity for Capital One to increase our presence in the Canadian market. We will leverage our unparalleled underwriting and analytics to help enhance and drive growth within the Hudson's Bay Company credit card portfolio. We also look forward to providing exceptional value and service to loyal Hudson's Bay Company cardholders."

Capital One is a member of ACT Canada; please visit http://www.capitalone.ca.

13. VERIFONE TO ACQUIRE HYPERCOM
Source: Hypercom (11/17)

VeriFone Systems, Inc. and Hypercom Corporation announced a definitive agreement under which VeriFone will acquire Hypercom in an all-stock transaction valued at approximately $485 million, including net debt assumed by VeriFone.

The transaction is subject to approval by Hypercom shareholders and customary regulatory approvals, and is anticipated to close in the second half of 2011. The transaction is expected to be solidly accretive to current VeriFone shareholders during the first twelve months of combined operations, excluding one-time costs.

Hypercom is a member of ACT Canada; please visit http://www.hypercom.com.

14. BANKS HAVE COMPLETE CONTROL OF CARD PERSONALIZATION & MANAGEMENT WITH THE ONLINE SERVICE PLATFORM FROM G&D
Source: Giesecke & Devrient (11/29)

The Convego Service Online Portal from Giesecke & Devrient (G&D) enables banks to provide a better debit and credit card service to their customers. Financial institutions can use the online platform to check the processing status of cards, ascertain the current stock position and actively control production processes (e.g. canceling cards) quickly and simply at any time. This gives banks complete control of the personalization process. The online service platform is an open, non-proprietary solution to which non-G&D personalization centers can also connect.

In addition to security and quality, the service delivered is an increasingly important factor for payment products. For example, the end customer may want to have a particular design on their card. Or they urgently need a new credit card and are given preference as a VIP client. The bank will need to know the current processing status of card personalization, whether the personalization center has already sent out the finished card and how many card bodies are still in stock.

The online service platform functions independently of G&D, which means that non-G&D personalization centers can also connect to the portal. The advantage for banks is clear: They now only need one central system to retrieve and process status information on all aspects of card personalization.

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

15. NXP'S MIFARE TO ADD NFC SUPPORT TO SIMS
Source: EE Times Europe (11/26)

NXP Semiconductors NV has struck a licensing deal so that its 13.56-MHz Mifare contactless smart card technology to be integrated into the Universal Integrated Circuit Card (UICC) smart card format of Gemalto NV used in mobile terminals in GSM and UMTS (European 3G) mobile communications networks.

The cooperation is aimed at spurring the use of NFC-enabled mobile devices in the Mifare infrastructure often used in transport ticketing applications, and thereby accelerating deployments of mobile contactless services.

The agreement enables Gemalto to complement its existing NFC application portfolio with Mifare DESFire and MIFARE Plus technology for its UICC security solutions. As a result, mobile operators and service providers will be able to offer a broader range of mobile contactless services. Mifare is the most widespread contactless technology worldwide and is used in public transportation, access management, event ticketing and customer loyalty programs, NXP said.

Gemalto and NXP are members of ACT Canada; please visit http://www.gemalto.com & http://www.nxp.com.

16. NEW DISPLAY CARDS FROM G&D OFFER ENHANCED SECURITY FOR ONLINE BANKING & ONLINE PAYMENTS
Source: Giesecke & Devrient (11/24)

Giesecke & Devrient (G&D) has expanded its product portfolio, adding two new display card models that make online banking and online payments even more secure. Presented in a compact credit card format, these innovative products offer the ability to dynamically generate one-time passwords for online applications at the touch of a button, with the passwords appearing on a flexible display embedded within the card. This new G&D solution gives conventional electronic payment cards an additional, innovative security function for online banking and online payments.

By deploying G&D's new display cards, financial institutions can provide their customers with additional security solutions for online banking and online payments by introducing the concept of dynamically generated one-time passwords (OTPs), which users enter in addition to their usual login name and password. Access is not granted until the OTP has been successfully verified. The additional authentication provided by a one-time password ensures that the user is in possession of the card in question.

In addition to a basic card model, which only provides the OTP authentication function, G&D also offers a display card model which incorporates additional features and payment functions. This more advanced model is capable of completely replacing existing electronic payment solutions such as traditional debit and credit cards. Users benefit from the ability to use just one card to go shopping in the high street, purchase items online, and carry out secure online banking.

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

17. NEXT YEAR'S BLACKBERRIES WILL BE NFC-EQUIPPED
Source: NFC News (11/17)

Research In Motion (RIM) is reportedly planning to equip next year's BlackBerry smart phones with NFC chips, effectively turning them into mobile payment devices, according to berryreview.com.

The news coincides with both Google's announcement that its new OS 'Gingerbread' will support NFC, and with AT&T, Verizon, and T-Mobile's recently revealed joint venture into mobile payments, 'Isis.'

In addition to contactless mobile payments, the new BlackBerries will support other NFC features, such as mobile coupons, discounts, public transit payments, and more, reports berryreview.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.