Thank you for the comments we've received
over the past year. Starting this month we
are shifting our focus to stories that will
impact on the Canadian market. Many of our
stories will now carry editorial notes from
our Executive Editor, Catherine Johnston,
President & CEO of ACT Canada.
In the coming months, we will add frequently
asked questions & answers related to
privacy as our new Privacy workgroup is launched.
Business case tips will also be added as
the Business Case workgroup gets underway.
Both of these new workgroups are open to
ACT Canada members.
Canada has emerged as a testing ground and
the gateway to the North American advanced
card marketplace. While we have many similarities
to the Australian and United Kingdom financial
and government sectors we are also acutely
aware of differences to the US banking environment.
We thank you for your support & look
forward to your comments.
IN THIS ISSUE:
1. Market Update From ACT Canada
2. US Dept. of State Orders Multi-Biometric
ID Cards
3. Aviation Security to Receive Big Boost
in R&D Funding
4. Stockholm 1st to Use E-Signatures
5. Websmart Enters Benefits Program Agreement
With National Car Rental
6. CIBC & Amex Launch Canada's 1st National
Smart Credit Card
7. Ontario Cuts `Smart Card' System After
Spending Millions
8. Kingston BIA & Scotiabank Introduce
Smart Loyalty Program
9. SCTN & CEO Announce Cross Licensing
Product Partnership
10. ACT Canada Launches 2002 Membership Drive
& Everyone Wins!
1. THE TIPPING POINT - A MARKET UPDATE FROM
ACT CANADA
Source: Catherine Johnston (01/22)
In Malcolm Gladwell's brilliant and groundbreaking
book, "The Tipping Point, the New Yorker
writer looks at why major changes in our
society so often happen suddenly and unexpectedly.
Ideas, behavior, messages, and products,
he argues, often spread like outbreaks of
infectious disease. Just as a single sick
person can start an epidemic of the flu,
so too can a few fare-beaters and graffiti
artists fuel a subway crime wave, or a satisfied
customer fill the empty tables of a new restaurant.
These are social epidemics, and the moment
when they take off, when they reach their
critical mass, is the Tipping Point. (Source:
The Tipping Point)
When we look back several years from now,
January 2002 will be seen, not as the point
where smart cards reached critical mass,
but where societal changes tipped North Americans
to seeking out this technology as the solution
for many different security and privacy problems.
On January 9th, 3 seemingly separate items
appeared in the Canadian news; CIBC and American
Express announced their new Entourage credit
card line, a man was found guilty of identity
theft in Quebec and The Computer Science
& Telecommunications Board reported the
need for much better corporate data security.
What is common to all three is a growing
awareness that things we deem to have value
are vulnerable and that smart and other advanced
card technologies provide security. Add to
that Microsoft's stated shift to security
and privacy over yet more functionality and
the imminent release of the ICAO standards
for travel documents, and you can start to
plot the timeline to the tipping point.
The CIBC entourage American Express Card
will be Canada's first smart chip credit
cards available nationally which provides
for greater security for online shopping.
Initially, the smart card technology will
be used to enhance the security of purchases,
particularly for shopping on the Internet.
Additional functions can be added over time,
such as applications for managing loyalty
programs or conducting electronic banking
activities.
There is value in reaching all those in the
market who want more security before they
will shop online.
The Computer Science and Telecommunications
Board (part of the US-based National Research
Council) warn of the growing threat to corporate
bottom lines from viruses and other cyber
attacks. They estimate US corporations spent
$20 billion (Cdn) to clean up damage last
year and predict that 2002 could be worse.
They point to smart cards used with a pin
or a biometric as providing much better security.
Corporate and government data has value and
there is significant cost when it is attacked.
A Quebec court sentenced a man to 4 years
for theft of identity. He scammed $300,000+
using 22 stolen identities. The judge said
he would have doubled his sentence except
the man had fully co-operated with police
after his arrest. The court's recognition
that identities have value sends a signal
to governments that they must provide more
counterfeit resistant forms of ID. This would
include birth certificates, driver's licenses,
health cards, passports & all other government
issued forms of identification.
This is significant as it indicates that
the Canadian judicial system recognizes that
an identity has value and therefore, should
be protected.
ICAO, the International Civil Aviation Organization
is releasing new standards for travel documents.
They provide support for credit card sized
plastic cards that would support an issuing
country's choice of smart, optical, bar code
and hybrid technologies.
These standards could form the basis for
governments and other major issuers that
want to allow flexibility of choice when
advanced card technologies are employed,
but at the same time, promote speed to market.
The US Government is already issuing cards.
We're committed to it; we're big fans of
smart cards," says David M. Wennergren,
the U.S. Dept. of the Navy's deputy chief
information officer for e-business and security,
and chair of the Department of Defense smart
card senior coordinating group. The Defense
Dept. is leading the U.S. government's smart
card charge, with 70,000 chip cards already
issued. The agency plans to distribute cards
over the next 18 months to 4.3 million military
and civilian personnel and outside contractors.
(Source: CardTechnology December 2001)
This shows the move to providing identification
on a platform that is counterfeit resistant
and capable of securing the data on the chip.
It provides a strong model for other issuers.
January 2002: mark this date, because there
is no going back.
~~~~~~~~~~~~~~~~~~~~~~~
2. DREXLER GETS $10.4 MILLION ORDER FOR MULTI-BIOMETRIC
ID CARDS
Source: BUSINESS WIRE (01/23)
Drexler Technology Corp. received a record-setting
$10.4 million order for its LaserCard multi-biometric
ID cards, under a U.S. government subcontract
through Information Spectrum, Inc.
This is part of an $81 million government
procurement program for optical memory cards
used for U.S. Immigration and Naturalization
Service (INS) "Green Cards" and
U.S. Department of State (DOS) "Laser
Visas." Under the five-year U.S. government
subcontract, awarded to the Company in June
2000 for up to 24 million LaserCard(R) optical
memory cards, approximately 9,020,000 cards
have been ordered thus far, including this
order.
U.S. Dept. of State "Laser Visa"
cards are used by frequent visitors from
Mexico for crossing the border into the states
of Arizona, California, New Mexico, &
Texas. Currently Mexico is the only country
designated by the DOS to utilize the "Laser
Visas."
LaserCard is a member of ACT Canada. For
more information, please visit their web
site at www.lasercard.com.
Executive Editor's Note: Laser (optical)
cards are one of the advanced card technologies
supported by the new ICAO standards for travel
documents. They are capable of carrying 4+
Mbytes on a standard card. Drexler has received
its 3RD US patent for inventions pertaining
to hybrid smart cards and related optical
data storage methods for achieving counterfeit-resistant
cards for secure on-line transfer of data
or cash.
~~~~~~~~~~~~~~~~~~~~~~~
3. AVIATION SECURITY TO RECEIVE BIG BOOST
IN RESEARCH FUNDING
Source: Air Safety Week/PBI Media via COMTEX
(01/21)
A substantial increase in R&D funding
is in the offing for aviation security, but
the program outlined last week was criticized
for ignoring simple solutions and for sidestepping
some of the major potential threats.
From now through 2006, some $50 million per
year will be devoted to furthering a number
of R&D projects to tighten aviation security.
The program was "shaped," as it
were, by more than 1,300 suggestions that
were submitted in response to a Federal Aviation
Administration (FAA) request following the
Sept. 11, 2001, terrorist attacks to the
general public for ideas. They have been
considered and distilled into a program that
addresses a broad range of security issues.
According to the FAA's Steve Zaidman, "By
Feb. 17 the department has to start awarding
security R&D grants" per the mandate
in the Aviation & Transportation Security
Act of 2001. Another $20 million provided
for security R&D by the Dept. of Defense
will augment the $50 million per annum funded
through the Dept. of Transportation. The
combined $70 million sum dwarfs the money
devoted to R&D of aircraft wiring more
than tenfold.
John Klinkenberg, chairman of the gov't-industry
aviation security R&D advisory committee,
presented the broad outlines of the committee's
findings, one of which being:
* A pilot program is needed featuring "smart
credentials" to identify what might
be called "trusted passengers."
These individuals (e.g. frequent flyers)
would be subjected to security checks but
would by allowed to bypass more intensive
security protocols. As Klinkenberg explained,
a background check would be used to establish
trust that the individual does not pose a
threat, and biometric data would be used
to establish identification. "This must
be a voluntary program," Klinkenberg
cautioned. Be that as it may, the "smart
ID" would interface with the Computer
Assisted Passenger Prescreening System (CAPPS)
that, Klinkenberg added, will be "taken
to the next level."
The notion of "smart ID" generated
considerable discussion. Committee member
John Kern had in mind some sort of a fast
track, or an express lane, for trusted people
and, indeed, for trusted cargo. Paul Busick,
associate FAA administrator for aviation
security, raised the issue of the public's
acceptance of "smart ID." He held
up his plastic embossed FAA pass, and pointed
out that it featured a photograph of the
wearer and a magnetic strip with additional
identifying information. However, the identity
pass did not include biometric information
(e.g., fingerprint, retinal picture, etc.).
He described this standard U.S. gov't pass
card as one being used in a "closed
system," that is by government civilian
and military agencies. Gaining public acceptance
in a civilian "open system" may
be another matter entirely, Busick intimated.
Paul Hudson of the Aviation Consumer Action
Project (ACAP) suggested in no uncertain
terms that the use of "smart cards"
to identify trusted passengers could lead
to a false sense of security. "The use
of smart cards issued to millions of passengers
could reduce security. We urge a universal
in-depth screening system," he said.
"Several of the Team Reports and comments
favor the use of ID cards with biologic identification
information encoded in them ('smart cards').
The basic problem is they are only as good
as the methods used to initially establish
ID and there is no real-time capability to
check names against databases such as terrorist
watch lists.
"Accordingly, smart cards must not be
issued to passengers ... because smart terrorists
will be able to obtain them and use them
to bypass most or all security [emphasis
in original]. We know that the U.S. is faced
with smart terrorists who often have good
ID, that terrorists and many criminals are
adept at identity theft (the most notorious
terrorist in U.S. custody is suspected of
having stolen the identity of a British resident),
document forgery, and the creation of fictitious
identities.
"The Sept. 11 hijackers are reported
to have had generally clean criminal history
records ... Some had U.S. driver's licenses,
Social Security Cards, pilot licenses, frequent
flyer cards and bankcards. The reputed leader
also had a graduate degree in city planning
...
"Other master terrorists have often
had engineering backgrounds, some like the
Pan Am 103 terrorists were foreign airline
security personnel [Libyans], others like
the Air India bombers were respected businessmen
(Sikhs who were long-time residents of Vancouver,
Canada), or decorated ex-U.S. military personnel
(e.g., Timothy McVeigh). Barring some legally
questionable profiling and discrimination
based on national origin, religion, age,
sex, educational background, etc., the typical
smart aviation terrorist of today would qualify
for and probably obtain a smart ID card to
avoid airport security checks ... the risk
of giving smart terrorists little or no security
checks is far too great."
Executive Editor's note: there are two issues;
trusted registration and counterfeit and
tamper resistant identification cards. We
cannot break the cycle of people stealing
identities and forging IDs until we stop
issuing ID cards based on non-secured technology.
Real time databases may not exist but there
is ample technology to support them. Security
for these databases, as well as policies
and procedures to maintain security after
cards are issued would be a part of any sound
security plan. To suggest we not move to
more secure platforms for ID because it may
lull us into a false sense of security is
not in our best interest.
~~~~~~~~~~~~~~~~~~~~~~~
4. SIGN ON: CITY OF STOCKHOLM FIRST TO USE
E-SIGNATURES
Source: PRIMEZONE via COMTEX (01/21)
The City of Stockholm has purchased FormPipe
from Sign On. The city will offer companies
and local residents the opportunity of fully
electronic communication using signatures.
"We have found a good solution which
not only gives our local residents the opportunity
to sign and send in forms and documents but
also to receive direct confirmation that
this has taken place," says Stefan Svensson,
City of Stockholm.
Anyone wanting to sign and send something
to the City of Stockholm will be able to
complete and send in applications and registrations
to the City via the Internet using a process
that is simple and intuitive. Local residents
will need to use an electronic ID document,
e.g. a smart card.
Since 1 January 2001 Swedish and European
legislation has provided that electronic
signatures shall be given the same status
as conventional signatures in pen.
"We at Sign On already have 40 or so
Swedish towns and cities using our Form Archive
Service, which allows local residents to
download, complete and print out forms. We
are in discussion with several of these as
well as several towns and cities outside
Sweden concerning the possibility of using
FormPipe," finishes Halvarsson.
Swedish Cabinet Minister Leijon stated, "all
information and services which can be supplied
electronically, while maintaining or improving
cost effectiveness, should be supplied in
this way". Sign On and the City of Stockholm
are the first to use a broad electronic-communication
solution to serve the public - a first step
towards a 24-hour authority!
Executive Editor's note: Canadian provincial
governments and municipalities should study
this program for suitability to our needs.
~~~~~~~~~~~~~~~~~~~~~~~
5. WEBSMART ENTERS AN AFFINITY & ASSOCIATION
BENEFITS PROGRAM - AGREEMENT WITH NATIONAL
CAR RENTAL (CANADA)
Source: Market News Publishing via COMTEX
(01/18)
WebSmart announced it has entered into an
Affinity and Association Benefits Program
Agreement with National Car Rental (Canada)
Inc., based on their integrated acoustic
smart card solutions, value added benefit
programs and authentication services "WebPass".
WebSmart will incorporate the National Car
Rental Global Discount Program into the WebPass
and Secured Sound smart card distribution,
effective immediately. Value added benefits
offered to WebPass card holders include -
leisure and National Business Rates less
an additional, up to 25% discount on all
car rentals - including Canada, United States
and abroad.
With the use of the WebPass acoustic signature
smart card, cardholders can make direct,
secure and authenticated National Car Rental
reservations, either by telephone and/or
via the Internet, based on technology offered
by the Company.
The Program would further incorporate a direct
access "Just Click" via (IVR/Internet)
for "at source digital discount coupon"
services, provided by current and future
strategic partners and/or merchants and subsequent
transaction certification and fulfillment
will be carried out securely online/real-time,
certified by the WebPass Vocal/Authentication
Server.
WebPass is an acoustic signature technology
based smart card and is the foundation for
the loyalty/affinity card programs and associated
"value-added and bundled" sales
and marketing promotional package offerings
by the Company.
Websmart is a member of ACT Canada. For more
information on the technology and/or companies
mentioned above please refer their web sites:
www.websmart.com and www.nationalcar.com.
~~~~~~~~~~~~~~~~~~~~~~~
6. CIBC & AMEX LAUNCH CANADA'S 1ST NATIONAL
SMART CREDIT CARD
Source: CardTechnology (01/09)
Canadian Imperial Bank of Commerce (CIBC)
will launch Canada's first chip-based credit
card in partnership with American Express
Co., the two firms announced. The CIBC/AmEx
smart card will come with a 32-kilobyte chip
and a magnetic stripe.
CIBC will offer a smart card reader for CDN$50
that can be attached to a PC via the USB
port. Initially the chip can be used for
purchases at online merchants. Eventually
cardholders may be able to conduct online
banking and earn loyalty rewards, "when
consumers say they want it and it is economical,"
says Christine Croucher, CIBC EVP, card products.
The smart card is part of a line of CIBC/AmEx
cards called entourage that includes two
other cards that only carry magnetic stripes.
AmEx is also rolling out an online security
system called LockIT to guard against fraud
on the smart card. An AmEx spokesperson says
over 1,000 Canadian Internet merchants have
signed on to LockIT.
The deal with CIBC is a coup for American
Express, which only has issued 2.25 million
cards in Canada. CIBC is Canada's largest
Visa issuer, with 3.9 million cardholders.
A Visa Canada spokesperson says Visa wasn't
disappointed by the announcement, but adds,
"Anytime a customer goes to an alternative,
you wish you got that order."
American Express Canada is a member of ACT
Canada. For more information please visit
their web sites at http://www.cibc.com and
http://www.americanexpress.com.
~~~~~~~~~~~~~~~~~~~~~~~
7. ONTARIO CUTS `SMART CARD' SYSTEM AFTER
SPENDING MILLIONS
Source: Toronto Star (02/01/22)
The Harris government has quietly shelved
plans for a provincial ``smart card'' system
after spending more than 20 months and at
least $12.5 million on the controversial
initiative, the Toronto Star reported Tuesday.
The system, first touted in the throne speech
of October 1999, could eventually have placed
health, birth, driver's license and other
personal information on a single high-tech
ID card for all Ontario residents.
Called the Smart Card Project, the goal was
to improve access to public services and
reduce fraud. But privacy advocates, including
Canada's federal privacy watchdog, warned
that the cards threatened to erode personal
freedoms by giving ``Big Brother'' another
tool for electronic surveillance.
A Management Board spokeswoman said the project,
hailed by some as one of the world's most
sophisticated smart-card initiatives, has
been shelved primarily for financial reasons.
`It's financially untenable at this time,''
said Julie Rosenberg, adding it was a ``tough
decision'' to pull the plug. ``The government
decided to wind down the smart card project
and to move forward with card technology
only when it is fiscally viable to do so.''
Management Board spent $12.5 million for
research and consulting services necessary
to plan and design the card and the initial
registration process.
The Health Ministry will use the research
to help ``speed up the engineering of the
current health card system,'' she said. The
Ministry of Consumer and Business Services
will inherit whatever is left over.
Executive Editor's note: ACT Canada questions
what costs were included in the government's
business case. Throughout the research stage,
the government frequently said it had not
determined which applications would be put
on the card or at what stage. This would
make it difficult to establish fiscal viability.
One would also question the extent of fraud
in our social programs based on the proven
ease of counterfeiting the current cards.
While infrastructure tends to be a one-time
cost, which can be phased in over several
years, fraud costs recur every year.
As for privacy, the same arguments apply
as in my earlier note about security. We
must take proper steps to provide both privacy
and security and not bow to those who would
deny us the benefits of technology.
~~~~~~~~~~~~~~~~~~~~~~~
8. KINGSTON BIA & SCOTIABANK INTRODUCE
A NEW LOYALTY SMART CARD PROGRAM
Source: Canada NewsWire via COMTEX (01/12/10)
The Downtown Kingston! Business Improvement
Association and Scotiabank announced the
launch of a new smart card loyalty rewards
program with local merchants. With their
"Downtown Kingston! Loyalty Card",
customers can now collect points when making
purchases at participating businesses and
then redeem their points for discounts on
future purchases - on one card.
All information regarding the customer's
loyalty point status is stored directly on
their card. By inserting their "Downtown
Kingston! Loyalty Card" into the smart
card terminal, the computer chip on the card
is read and adjusted as points are accumulated
or redeemed.
"We are pleased to be a part of this
innovative program in downtown Kingston,"
says Albert Wahbe, CEO of e-Scotia and Scotiabank's
EVP of Electronic Banking. "At Scotiabank,
we are committed to developing the latest
technologies to offer Canadians greater choice
and convenience when banking and shopping."
Scotiabank is a member of ACT Canada. For
more information, please visit their web
site at http://www.scotiabank.com.
~~~~~~~~~~~~~~~~~~~~~~~
9. SCTN & CEO ANNOUNCE CROSS LICENSING
PRODUCT PARTNERSHIP
Smart Chip Technologies and Consumer Economic
Opportunities Inc. (CEO) announced a new
partnership that allows for cross product
licensing and joint revenue sharing opportunities
with respect to each others' products. This
partnership will enable both companies to
deliver one of the most unique and valuable
smart card products available on the market
today - CREDITZ™.
The CREDITZ system will be integrated with
SCTN's smart card based loyalty system "e-llegianceT"
and "LoyaltyCentralT." CEO will
enhance the CREDITZ system by adding e-llegianceT
and LoyaltyCentralT to its mix of product
benefits. CEO will also provide SCTN's clients
with customer lifetime management capabilities
and consumer privacy solutions, which abide
by USA, Canadian and EC privacy laws.
The CREDITZ system is currently being deployed
with both national and regional merchants
in Canada throughout 2002. CEO had initially
projected installing the system for 2,400
merchants within 24 months. The company now
projects that it will exceed their original
forecast by 10-fold.
Smart Chip Technologies is a member of ACT
Canada. For more information about either
company, please visit their web site at http://www.sctn.com
and http://www.creditz.com.
~~~~~~~~~~~~~~~~~~~~~~~
10. ACT CANADA LAUNCHES 2002 MEMBERSHIP DRIVE
& EVERYONE WINS!
ACT Canada has reclassified membership levels
to Principal General (formerly Platinum)
and General (formerly Gold) members, Government
& Associate.
To introduce the new benefits, the Board
of ACT Canada unveils the "Smart Talk"
contest. You can win from $100 to $1000 for
referring new members. All you have to do
is talk about us!
Tell us who could benefit from ACT Canada
membership. Send us an email; we only need
a company name and contact information (including
name/phone number/title & email address
of a contact. Tell us why you think they
should be members. We will follow up with
them and if they join you will get $100.
BONUS: Your name will entered into a draw
for $1000. Every 10 new member, we will draw
for the thousand-dollar prize.
Best of all, YOU win the prizes, not your
company. New members win from the benefits
of membership. We all win by having a strong
association to promote advanced card technologies.
In the case of multiple submissions for the
same potential member, the prize is awarded
to the first submission. Please address all
emails to info(AT)actcda.com with a subject
line of Membership Contest.
For a copy of our value proposition &
membership benefits, please visit our web
site or email info(AT)actcda.com.
~~~~~~~~~~~~~~~~~~~~~~~
ACT Canada would like to thank our new &
renewing members:
PLATINUM
MasterCard (upgrade)
GOLD
American Express
CUETS
LaserCard
MIST
Ministry of Consumer & Commercial Relations
Pace Integration
SILVER
Xebec
==========================
Andrea McMullen
ACT Canada
tel: 905 426-6360 ext. 24
fax: 905 619-3275
email: andrea(AT)actcda.com
web: www.actcda.com
mail: 85 Mullen Drive, Ajax, ON, L1T 2B3