Welcome to the April edition of ACTion News.
Our newsletter is distributed
each month in order to keep you up to date
with events in the advanced card
industry. This complimentary service is provided
by ACT Canada; "building
an informed marketplace". It is also
available in the Industry Information
section of our web site www.actcda.com. Please
feel free to forward this to
your colleagues.
IN THIS ISSUE:
1. Editorial Comment
2. MasterCard Unveils Global Smart Card Solutions
3. Belgian Multinational Bank Licenses Multiapplication
Software
4. Infineon to Supply Taiwan Health Smart
Cards
5. Fraud Continues to Grow in UK
6. Oberthur to Provide Multi-Application
Cards in Australia
7. National Roll Out of Smart Cards for Dutch
Public Record Offices
8. Infineon to Create "Watermark"
for Chip Cards
9. All-Purpose Chips are Finally in the Cards
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
ACT CANADA WOULD LIKE TO THANK OUR NEW &
RENEWING MEMBERS:
GENERAL
Canadian Payments Association
CGI
CPI Card Group
DataCard (new)
Synercard (upgrade)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. EDITORIAL COMMENT
Source: Catherine Johnston, President &
CEO, ACT Canada
We see a growing global trend toward government
issued identification that
uses chip based platforms to provide more
security and privacy protection
for their citizens, as well as to deliver
more services. Fraud continues to
push the financial community toward the security
of chip, where the platform
is then used to support additional products
and services.
In this issue of our e-news, we are focusing
on these advancements. We are
currently seeing activity in the Canadian
marketplace that should lead to
pilots and building foundations for national
rollouts.
As the technology community gathers in New
Orleans this month at
CardTech/SecurTech, we wonder how many industry
players will be able to stay
the course until these projects move forward.
The past five years have been
very difficult and costly for the industry.
We recognize that issuers would
like to defer the investment in chip as long
as possible; but 9/11, identity
theft and card counterfeiting are wake up
calls. If Canadian business and
government do not move to protect our interests
and if fraud moves here as
other countries migrate to chip, what price
will Canadians pay? Perhaps the
most critical question is what state the
industry will be in by the time
issuers decide to call upon them. ACT Canada
is aware of the activity at
the front of the pipeline and is encouraged
by the prospects, but recognizes
that the industry needs more than the promise
of a profitable future.
ACT Canada - Register Of Achievements
Starting this month we will report on advancements
we have made on behalf of
our members. We invite you to join us so
that we can ACT on your behalf.
The National Infrastructure Forum met and
moved another step closer to
identifying core standards for a sharable
national chip infrastructure. They
identified five issues related to chip card
migration and outlined steps to
be taken to overcome them.
ACT Canada highlighted the risks of identity
theft and the role chip will
play in reducing those risks through our
March Symposium on Secure ID. All
three major television networks covered the
event, as well as 680 News
Radio. Since then we have continued to do
TV and radio shows on this topic
and are beginning to work with print media
as well. Our next Symposium will
be June 14th and will focus on Privacy, -
who is putting our personal
privacy at risk and what steps can we take
to protect ourselves. Bruce
Phillips, the former Privacy Commissioner
of Canada will be among our
speakers. Watch for news of our second topic
for that day.
These are just two of the actions we took
on behalf of our members last
month.
We invite you to visit ACT Canada in the
Supporting Organizations Pavilion
at CardTech/SecurTech 2002, Morial Convention
Center in New Orleans, April
23 - 25.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
2. MASTERCARD UNVEILS GLOBAL SMART CARD SOLUTIONS
Source: ICMA Daily News (04/08)
MasterCard International launched "OneSMART(TM)
MasterCard(R)," a
comprehensive approach to smart cards designed
to give MasterCard's member
financial institutions around the world the
technology choices, marketing
support and critical flexibility they need
to succeed.
With OneSMART MasterCard, all of MasterCard's
global smart card solutions,
technical expertise, and marketing support
are being consolidated under a
new banner.
"Today no one has more experience with
smart cards than MasterCard. There
are currently more than 100 million MasterCard(R)-,
Maestro(R)-, Mondex(R)-,
and Clip(TM)-branded smart cards around the
world," said Art Kranzley, Chief
e-Business Officer, MasterCard International.
"What sets MasterCard apart is
that we offer our members solutions through
a multitude of choices,
flexibility and complete end-to-end smart
card support."
OneSMART MasterCard represents a comprehensive,
four-point approach for
delivering the promise of smart cards to
our members. These elements cover
every aspect necessary to launch a successful
smart card program,
integrating the key areas of consumer value
proposition, market-ready
technology solutions, end-to-end implementation
support and global marketing
initiatives.
"Consumers told us they want a card
they can control and customize as they
see fit," added Kranzley. "Equally
important, they told us they want a card
that is personal, portable, rewarding, and
secure. We took that feedback
seriously, and focused on providing our members
with a selection of
market-tested smart card applications that
meet those needs."
With OneSMART, MasterCard is enabling its
members to select the right set of
smart card features and benefits to meet
their specific program goals.
Working with MasterCard, members can choose
from a broad menu of smart card
applications, including: chip-based credit
and debit, personal data storage,
digital ID and security, loyalty, e-ticketing,
e-couponing and stored value.
MasterCard issuers can determine which applications
or services they wish to
bundle with their card programs.
Providing further flexibility, MasterCard
remains the only payment brand
actively supporting all major smart card
environments (MULTOS, JavaCard, and
proprietary platforms). Members are also
free to choose the size of the
chip, the technology platform employed, and
any enhanced security features
they wish to add to the card.
"It has become increasingly evident
to us that our members see smart cards
as a way to offer differentiated programs,"
added Kranzley. "Seen in this
light, chip is not a product, but a powerful
technology for providing truly
unique, value-added features and services.
Accordingly, there is no
pre-packaged OneSMART card program being
offered; rather, members are
empowered to choose from an expanding array
of possibilities."
By employing a variety of traditional and
non-traditional marketing tactics,
MasterCard and its members will ensure that
the benefits of smart cards are
widely understood.
"We expect to see a steady increase
of chip programs in the U.S. -- with
more than 50 million smart cards by 2005,"
said Theodore Iacobuzio, director
of consumer credit research at TowerGroup,
the Boston-based research and
consulting firm. " OneSMART, MasterCard's
flexible new approach to smart
cards, is a major step in the direction of
attaining that reality."
Executive Editor's note: We applaud MasterCard's
recognition that chip is
not a product, but a strong and timely delivery
mechanism.
MasterCard Canada is a member of ACT Canada.
For more information about
MasterCard, please visit their web site at
http://www.mastercard.ca.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
3. BELGIAN MULTINATIONAL BANK LICENSES MULTIAPPLICATION
SOFTWARE
Source: CardTechnology (03/29)
Belgium-based KBC Bank and Insurance Group
plans to issue chip-based credit
and debit cards through some of its owned
or affiliated banks in Central and
Eastern Europe, a deal that could help accelerate
the move to payment cards
that comply to international EMV specifications
in the region. KBC Bank,
which is planning to launch EMV in its home
base of Belgium using a
multiapplication smart card system developed
by Brussels-based Proton World
International, announced it had licensed
the system, called Prisma, for use
by its majority-owned CSOB Bank in the Czech
Republic and K & H Bank in
Hungary, as well as its associated Kredyt
Bank in Poland. The latter has
branches or subsidiaries in Lithuania and
the Ukraine, which could also use
the software. The banks would mainly use
Prisma to issue single-application,
EMV cards in projects that would begin as
early as this year, according to
the plans. They could later add applications,
such as loyalty or Internet
security to the cards, say Proton executives.
Prisma is based on Java Card
multiapplication software and an application
loading mechanism that complies
with specifications from the Visa-led GlobalPlatform
consortium. All told,
banks in Poland have issued about 10,000
EMV cards, with about 14,000
point-of-sale terminals deployed in the country,
according to Visa
International's Central and Eastern Europe,
Middle East and Africa region.
Proton World is member of ACT Canada. For
more information about Proton
World, please visit their web site at http://www.protonworld.com.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4. INFINEON TO SUPPLY TAIWAN HEALTH SMART
CARDS
Source: Cards Worldwide (04/05)
Infineon Technologies has reached an agreement
with TECO Electric &
Machinery Co. Ltd., Taiwan, to provide secure
microcontroller chips for use
in the Taiwan National Healthcare Chip Card
project, in which 22 million
Taiwanese residents will be provided with
a smart card between July 2002 and
the end of 2003. This card will replace existing
paper health card systems,
and will store cardholder information such
as medical records, treatment and
visit records, and administrative data.
Infineon is a member of ACT Canada. For more
information about Infineon,
please visit their web site at http://www.infineon.com.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
5. FRAUD CONTINUES TO GROW IN UK
Source: CardTechnology (03/28)
Payment card fraud in the United Kingdom
increased by 30% during 2001 to
411.4 million pounds (US$586 million), according
to recently released
estimates by major UK banking association,
the Association for Payment
Clearing Services. While still growing at
a substantial pace, the rate of
increase slowed from last year, when total
card fraud grew by 55% to 317
million pounds. Moving to smart cards and
PIN-based transactions are the
main measures against the two largest categories
of card fraud: Counterfeit
cards, which accounted for an estimated 160.3
million pounds in losses last
year, up 50%; and lost and stolen cards,
which cost banks and retailers an
estimated 114 million pounds last year, 12%
more than in 2000.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
6. OBERTHUR TO PROVIDE MULTI-APPLICATION
CARDS IN AUSTRALIA
Source: ICMA Daily News (04/09)
The French group Oberthur Card Systems has
announced that it has secured a
contract in Australia for more than 40,000
multi-application smart cards in
the context of a project launched by the
St George Bank and Worldsmart
Technology Pty Ltd. Financial details of
the project, which Oberthur
describes as "innovative in terms of
scale", have not been revealed. The
smart cards which can be used for several
applications, will permit the two
Australian companies to launch Australia's
first electronic payment project.
For more information about Oberthur Card
Systems, please visit their web
site at http://www.oberthurcs.com.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
7. NATIONAL ROLL OUT OF SMART CARDS FOR DUTCH
PUBLIC RECORD OFFICES
Source: epayments news (04/05)
The introduction of a national roll out of
smart cards for Public Record
Offices in The Netherlands has started. HSB
has signed a long term contract
with the main record offices for supplying
the total infrastructure
including card management, card production
and personalisation services,
card readers and other hardware and several
software applications to all
participating institutions.
The main goal of the Dutch Public Record
Office Card is to secure both
physically and logically the offices itself
by identification of visitors
entering their domain. Secondly, additional
services will be offered to the
visitors holding a card. In the near future
paperwork can be viewed by a
secure internet connection. The visitors
will also be offered reductions.
The public record offices in The Netherlands
expect to issue about 30.000
cards to frequent visitors before the end
of 2002.
The chip structure is designed taking international
library standards into
account. Although the Dutch libraries are
not yet participating, they are
very much interested in the chosen solution
of the public record offices.
The institutions are promoting wider use
of the "cultural" ID-card in the
future in libraries and related cultural
institutions starting in The
Netherlands.
Central in the solution is the (HSB Cards
& Card Systems) CardCare
Management System. This product collects
all requested card applications
from participating members. Visitors can
obtain a smart card by requesting a
card at a participating office. With an electronic
application form the
pictures and personal data are captured.
After completion all card requests
are collected in one centrally located card
management system. This system
checks the identity with all other existing
card holders in the database.
Personalized cards are send to the new cardholder.
HSB Cards & Card Systems, is specialised
in Card Management and Biometric
application software for trusted identification
solutions.
For more information about HSB, please visit
their web site at
http://www.hsb.nl/.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
8. INFINEON TO CREATE "WATERMARK"
FOR CHIP CARDS
Source: Cards Worldwide (03/28)
Infineon Technologies, in conjunction with
biotechnology specialist november
AG, has embarked on a project to create a
coating for the gold contact
surface of the module on chip cards. The
proposed coating would enable
smart card to have unique identification
features much like watermarks on
paper currency. The coating technology will
be employed primarily for high
security controller applications, where confidential
information stored on
the chip cards is read, modified and stored
once more. The coating is also
highly resistant to abrasion, so that even
after being used thousands of
times, the security features do not lose
integrity or quality. The market
launch of the first chip card modules with
this security feature on the
contact surface is currently scheduled for
the start of 2003.
Infineon is a member of ACT Canada. For more
information about Infineon,
please visit their web site at http://www.infineon.com.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
9. ALL-PURPOSE CHIPS ARE FINALLY IN THE CARDS
Source: Globe & Mail (03/28)
Catherine Johnston has so many plastic cards
in her wallet that she can't
get it closed.
"I've reached wallet saturation,"
says Ms. Johnston, who is shopping for a
bigger purse to hold all her credit, debit
and loyalty cards.
But Ms. Johnston is confident that a better
solution is on the way for her
and the millions of others who share her
frustration with the proliferation
of plastic cards.
Soon, she and others in the industry say,
new technology will make it
possible for her to replace the more than
two dozen cards she carries with a
single smart card -- a piece of plastic carrying
a microchip that can be
used for credit, debit, electronic cash and
a host of loyalty programs.
Ms. Johnston has long been advocating for
this kind of technology in her
role as president of the Advanced Card Technology
Association of Canada -- a
body representing technology companies, financial
institutions and other
organizations with an interest in card technologies.
Now she says the vision is close to being
realized here with a new CIBC
American Express smart card and a Bank of
Nova Scotia pilot project that
will soon begin in Barrie, Ont.
The CIBC American Express card, released
earlier this year, is embedded with
an electronic security certificate that offers
consumers a way of making
encrypted on-line transactions.
And this will likely become a multi-purpose
card as new applications are
added at a later date, according to Cheryl
Longo, senior vice-president, new
ventures, for card products at Canadian Imperial
Bank of Commerce.
The Barrie pilot is expected to get under
way later this year and run for at
least six months, says Albert Wahbe, Scotiabank's
executive vice-president
of electronic banking. About 12,000 Scotiabank
customers will be equipped
with a smart card bearing a suite of applications
developed by Oasis
Technology Ltd. of Toronto and five other
companies that have joined
together in a group called the Solstice Alliance.
The alliance's other partners are: CIT, the
e-payments division of
Silverline Technologies Ltd. of Piscataway,
N.J.; Giesecke & Devrient of
Munich, which makes smart cards and smart-card
systems; and Smart Chip
Technologies Inc. of Salt Lake City, which
specializes in loyalty-card
systems and management.
"The card will have the same memory
as you had on your home computer six or
seven years ago," Mr. Wahbe says.
"It can keep track of 28 loyalty programs.
We're trying to prove that you
can use the same card as a money card, a
Visa card and a loyalty card."
Smart cards -- used in some mobile phones
and security applications, as well
as for credit cards and other financial services
-- are already popular in
Europe and the Asia Pacific region, but have
been slower to catch on in
North America.
There were 1.79 billion smart cards like
the one about to be launched by
Scotiabank in use around the world last year,
but just 2 per cent of these
were used in the United States, according
to the market-research company
Frost & Sullivan. It predicts that smart-card
sales will explode to 3.66
billion worldwide by 2004.
Ms. Johnston says such smart cards will almost
inevitably find their way
into Canadian pockets and purses as well
over the next few years, because
financial institutions and credit-card associations
here have adopted the
so-called EMV global technology standard
devised by the major issuers --
Europay, Visa and MasterCard -- for the cards,
the POS devices and other
machines that read them, as well as the infrastructure
used to process
payments behind the scenes.
Replacing the magnetic stripe on the back
of today's credit cards with a
microchip is an important step for the financial-services
industry because
it will have a big impact on reducing fraud,
she says. The new cards have an
encryption feature that generates a different
identification number every
time they are used, making it next to impossible
for fraud artists to reuse
stolen credit-card numbers, Ms. Johnston
adds.
And the new microchips can replace all the
PINs that consumers now have to
punch in before using many of their cards
with a single digital certificate
embedded in the card.
That is safer and smarter, says Ms. Johnston,
because "I'm not going to have
to write them down where someone else can
get at them. Or I'm not going to
have to pick two or three numbers that I
can remember and then use them
across a myriad of applications."
This ability to generate a new number each
time it is used makes it
perfectly suited for on-line commerce, since
consumers need not worry about
their credit-card numbers being stolen and
technology is available for
merchants to verify that the numbers sent
are genuine, according to Tony
Mitchell, vice-president of public affairs
and communications at American
Express.
He says Blue, a smart card introduced by
American Express two years ago, has
gained gradual acceptance in the United States
and in various other
countries where it has been released.
It now has 2.2 million users down south and
1.8 million overseas.
Mr. Mitchell says Blue can give users an
added level of security when used
in conjunction with a smart-card reader attached
to a computer because the
technology will not allow a purchase to be
made on-line unless the card is
inserted into the reader.
But added security is just one advantage
of smart cards, says Mr. Mitchell,
who notes that they are now used to keep
track of loyalty points in a number
of promotional programs.
"We see it as an evolving card with
a lot of potential for new applications
that can be added," he says.
A smart card is an obvious boon to anyone
who wants to do business in the
electronic world, says Ms. Johnston. "It
gives you a bridge between the
clicks and the bricks."
The new smart card that the Solstice Alliance
has developed for Scotiabank
adds another key application to the mix --
the ability to process
micropayments or small change in the electronic
world.
The cards being used in the new pilot have
a magnetic stripe, as well as a
smart card, so that they can be used as debit
and credit cards in POS
devices that don't have smart-chip readers,
Mr. Wahbe says.
Also, the new cards keep track of change
from a credit-card transaction, so
that, for example, a consumer may purchase
an item for $22.50, but charge
$25 on the credit card and have the remaining
amount stored in an electronic
purse on the smart card.
When they purchase small items, payments
are made out of this electronic
purse.
While the new smart-card technology could
bring the number of cards in Ms.
Johnston's wallet down to one, she doubts
that consumers will ever let their
wallets really get that slim.
"Canadians love to have choice,"
she says. "And I don't see it going
to one
card because I don't know anyone who hasn't
ever left their card behind
somewhere."
Executive Editor's note: The Globe and Mail
article fails to mention the
sixth partner in the Solstice Alliance. It
is Cardis, an innovation and
licensing company based in Amsterdam, The
Netherlands. Cardis specializes in
advanced smart card payment systems and has
a portfolio of patented
innovations.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
ACT Canada is an international non-profit
association for the advancement of
card technologies. We work on behalf of our
members to promote the
awareness, understanding and use of all advanced
card technologies;
including optical, smart, capacitive and
emerging technologies. If you
would like to learn more about ACT Canada
membership please visit
http://www.actcda.com or contact our office
at (905) 426-6360 ext. 22.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Please forward any comments, suggestions,
questions or articles to andrea(AT)actcda.com. If you would like to
be removed from our newsletter
distribution list please reply to this email
with the word "REMOVE" in the
subject field. Please note that articles
contained in this newsletter have
been edited for length.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Andrea McMullen
AVP
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