Welcome to the June 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 Resource Centre of
our web site www.actcda.com. Please feel
free to forward this to your
colleagues.
IN THIS ISSUE:
1. EDITORIAL COMMENT
2. MASTERCARD NORTH AMERICA PRESIDENT DELIVERS
STATE OF THE UNION ADDRESS
3. GO TRANSIT ISSUES ERG'S SMART CARD FARE
COLLECTION SYSTEM
4. HONG KONG GOV'T TO USE INFINEON'S CHIP
CARD FOR SMART ID
5. VISA TRIES TO JUMP-START SMART CARD LOYALTY
6. HOTEL CHAINS USE SMART CARDS FOR LOYALTY
7. CATHERINE JOHNSTON & KENNETH WONG
TO KEYNOTE ICMA'S 11TH ANNUAL CARD
MANUFACTURING EXPO
8. CUBIC WINS EDMONTON TRANSIT SYSTEM CONTRACT
9. SCTN & CEO ANNOUNCE PRODUCT DEVELOPMENT
AGREEMENT
10. MASTERCARD & DATACARD SIGN STRATEGIC
ALLIANCE FOR SMART CARD SOLUTIONS
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ACT CANADA WOULD LIKE TO THANK OUR NEW &
RENEWING MEMBERS:
PRINCIPAL
Visa Canada Association
GENERAL
American Express Canada
Tillsmith
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ACT CANADA - REGISTER OF ACHIEVEMENTS
BUILDING MARKET AWARENESS
With the RCMP and Office of Critical Infrastructure
Protection & Emergency
Preparedness (Gov't of Canada) we worked
this month to raise awareness of
e-terrorism and the role that smart card
applications play in minimizing
your risks. ACT Canada members will have
electronic access to these
presentations.
Catherine Johnston continues this awareness
building as the June guest
speaker for the International Trade Club
of Toronto.
PRIVACY LEADERSHIP FROM ACT CANADA
Bruce Phillips, the former Privacy Commissioner
of Canada, talked to June
symposium attendees about smart cards in
relationship to protecting your
privacy. He applauded ACT Canada as an industry
leader, for work in the
area of privacy and card technology. Mr.
Phillips now works with the
Neufeld Group to help companies better understand
privacy and its
implications in this new business-consumer
culture. Professor Andrew
Clement, University of Toronto, reminded
delegates that card users must be
involved in the early stages of application
design if they are to embrace
new products and services.
ACT Canada members will also have access
to presentations on the National
Infrastructure Forum and Privacy Impact Assessments
for Multi-Application
smart cards.
That procedure has recently been introduced
to the US Department of Defense,
GSA and other American organizations. Developed
by the office of the
Information and Privacy Commissioner Ontario
and ACT Canada, this ground
breaking procedure helps issuers design privacy
protection for their card
systems for increased consumer confidence
and, in some cases, to meet legal
requirements.
BUILDING MEMBER VALUE
ACT Canada has negotiated for its members
a 25% discount for advertising in
two IT Business publications; InfoSystems
& Technology in Government.
We are working with CardTech/SecurTech to
build a special offer for the 2003
conference in Orlando. We have strengthened
our relationship with the Smart
Card Alliance and will soon announce other
strategic associations that will
benefit our members.
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1. EDITORIAL COMMENT
Source: Catherine Johnston, President &
CEO, ACT Canada (06/26)
It could, and should be said, that those
who think it can't be done should
get out of the way of those who are doing
it. This is true of smart and
laser card applications.
For example, the US government has launched
an impressive number of advanced
card applications and can clearly identify
the benefits for both the issuer
and cardholder. Their focus is clearly on
the applications, as it needs to
be. How can our government(s) leverage these?
In some cases, the US is
willing to give applications to other governments.
They will share their
knowledge and experiences, saving us time,
expense and effort. In turn, we
can help them in areas where we have developed
expertise, such as with
privacy, PKI and biometrics.
To succeed we must focus on the value our
applications will deliver, and
then work backwards to determine what the
application needs to reach the
pocket of the cardholder. NOTHING starts
with the technology, a point we
have proven painfully over the last thirty
years. On the upside, the market
is growing quickly in terms of cards sold
and shipped, so there are a lot of
opportunities from which to learn.
ACT Canada has identified backbone applications,
a foundation on which all
issuers can build business cases and customer
value…but more on that next
month.
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2. MASTERCARD NORTH AMERICA PRESIDENT DELIVERS
STATE OF THE UNION ADDRESS TO
THE PAYMENTS INDUSTRY
Source: MasterCard (06/04)
"The payments industry is driving a
historical transformation in the way
business is conducted globally and the way
consumers around the world manage
their finances," according to Ruth Ann
Marshall, president, North America,
MasterCard International.
Marshall's keynote at The 14th Annual Card
Forum and Expo addressed the
current state of the payments industry, the
challenges that lie ahead and
how to prosper from them. Card Forum, an
industry event that features
discussions on the latest issues surrounding
payment cards.
Emerging Payments: Technology is Breaking
Down Barriers
"Implicit in most discussions about
the payment industry is the topic of
technology, which is breaking down the barriers
to online purchasing and
mobile commerce. The convergence of the Internet
and wireless technologies
is leading to greater innovations, opening
up new opportunities for the
industry," said Marshall.
For example, online billing is starting to
change the way consumers settle
their accounts. With more than 3.6 million
U.S. households logging on to pay
their bills, this number represents less
than one percent of monthly bill
paying, but "The potential for billers
and processors is huge, " said
Marshall. U.S. consumers receive 18 billion
statements every year. "With
traditional payment methods, billers must
lay out more than $1.00 per
invoice. When paid electronically, the cost
drops approximately to .40,
saving approximately $8 billion," Marshall
added.
New technologies are driving Acceptance in
emerging categories. In 2001,
MasterCard Acceptance grew 149 percent in
the fast food segment, yet there
is still room for growth. While most people
have a credit and/or debit card,
they continue to choose cash when looking
for a quick meal. Since old habits
die hard, payment card companies must provide
more personalized rewards and
incentive programs by leveraging new technologies.
One way to change
consumer behavior is with transponder technology.
No longer limited to gas
and tolls, fast food establishments are now
embracing this as an alternate
payment solution.
Smart Cards Gaining Acceptance
Chip cards - or smart cards - also are starting
to catch on in the U.S. The
Gartner Group expects that by 2004, more
than 4 billion smart cards will
have been distributed worldwide, and the
strongest regional growth will be
in the U.S. as consumers discover the convenience
of a single card for
credit, cash, debit, e-cash, and digital
ID.
As with smart cards today, e-commerce was
touted as the next big thing a few
years ago. "We envisioned a world where
virtually all our purchases,
including clothing, books, music, toys and
groceries could be ordered from
home with a click of the mouse, noted Marshall."
"This prediction may have
sounded far-fetched at the time, but today
e-commerce is accepted as
routine. It is a vital and growing part of
the global economy, for both
consumers and the business-to-business segment."
Person-To-Person Segment Is Evolving
After last year's e-marketplace shakeout,
many business-to-business sites
turned to trusted partners in the financial
industry to handle the payment
side, freeing them to focus on business development
and revenue growth. The
person-to-person segment is still evolving,
according to the Tower Group.
Pure Internet person-to-person payments have
yet to prove their viability as
a sole business channel, but their true value
lies within their flexibility
to serve multiple payment market needs.
Cash Is Losing Ground to Debit and Pre-paid
According to Marshall, "Debit is a growing
segment of the payments industry
with cash and checks rapidly losing ground.
Of those who don't have debit
cards, 25 percent say they would take one
if offered one."
Another emerging payment option is the payroll
card, which is a pre-paid
card that serves the "unbanked"
customer. Increasingly, these consumers are
finding it difficult to afford the fees associated
with maintaining
checking/savings account balances or in check-cashing
establishments. With a
payroll card, customers receive their net
pay on a pre-paid card allowing
them to easily retrieve their funds from
an ATM or anywhere MasterCard is
accepted.
"Yes, we have accomplished much, but
this is not the time to rest on our
laurels, Marshall said. "Opportunities
abound -- from paying taxes, to
making donations in churches, we'll be anywhere
money changes hands, with an
ever-larger presence, handling ever-greater
transaction volumes. We must
continually challenge ourselves to scale
that next peak."
Ruth Ann Marshall is president, North America
for MasterCard International,
a global payments company. Marshall, who
joined the company in October 1999,
is responsible for building all aspects of
MasterCard's issuance and
acceptance business in North America. She
is working to strengthen
MasterCard's focus on key members while preserving
the value that the
regional and product groups provide to all
members.
MasterCard Canada is a member of ACT Canada;
for more information about
them, please visit their web site at http://www.mastercard.com
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3. GO TRANSIT ISSUES ERG'S SMART CARD FARE
COLLECTION SYSTEM
Source: ERG (06/26)
The ERG Group announced today that GO Transit
has commenced operation of
Phase 1 of a new ERG "seamless"
smart card automatic fare collection system
for its commuter rail and bus network serving
the Greater Toronto Area.
The GO Transit system, which comprises seven
rail transportation corridors
and an extensive bus network, provides commuter
transit services over an
8,000 square kilometre area to approximately
5 million residents in the
Greater Toronto Area and outlying regions.
Following the successful
completion of the six to twelve month Phase
1 system demonstration project
on the Richmond Hill transportation corridor,
GO Transit intends to rollout
the system across its entire network. GO
Transit will issue up to 7,000
dual interface contact/contactless smart
cards during Phase 1, and expects
to issue over 80,000 smart cards to its regular
riders when the system is
fully implemented.
GO Transit delivers regional commuter rail
and bus services, providing about
43 million annual passenger trips and collecting
over CDN$180 million in
annual passenger revenue. The seven-corridor
GO rail system, comprising 50
stations and 330 cars, connects with the
GO bus system, Toronto Transit
Commission and local transit operators. The
extensive GO bus system augments
the rail network and serves communities up
to 60 miles from Toronto with a
234 bus fleet that is growing steadily as
ridership strongly expands.
The new ERG smart card system continues to
apply GO Transit's
Proof-of-Payment fare-by-distance rail fare
collection policies built around
point-to-point fares. On board inspectors
will use portable handheld card
readers to check the passenger smart cards
for proper canceling and for pass
validity. Cardholders can purchase and load
value on their cards at both
agency ticket offices and third party retail
outlets.
GO Transit Managing Director, Gary McNeil,
said that the initial reaction
from the 1.8 million annual customers on
the Richmond Hill line has been
good. Their continued positive support will
drive the full system rollout to
all of our customers next year.
ERG is a member of ACT Canada; for more information
about them please visit
their web site at http://www.erggroup.com.
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4. HONG KONG GOVERNMENT TO USE INFINEON'S
CHIP CARD TECHNOLOGY IN SMART ID
CARD PROJECT
Source: Infineon (06/10)
Infineon Technologies announced it will supply
secure microcontroller chips
for use in smart identification (ID) cards
being issued by the Government of
the Hong Kong Special Administrative Region
(SAR).
The new Smart Identity Card System (SMARTICS)
which will be implemented by
the Hong Kong SAR starting in July 2003,
will ultimately replace laminated
plastic photo ID cards now carried by all
citizens 11 years of age or older.
The system uses a multi-application smart
card that incorporates the MULTOS
operating system of Australian Keycorp Limited
and secure microcontrollers
manufactured by Infineon.
The SMARTICS card will be used for personal
identification and
authentication, as a drivers license, and
as a library card. Printed
information and a photo will be visible on
the card surface. The
microcontroller chip incorporated into the
card securely stores an
individual name, date of birth, and ID number.
Additionally, it will store
data on the digital characteristics of the
card holder's thumbprint. This
will allow officials to verify identity using
biometric data. This data only
includes the relative position of the fingerprint
characteristics and not
the fingerprint as a whole. This technique
eliminates the possibility of
reconstructing the original fingerprint from
this data.
Under the first phase of this project, the
Government of Hong Kong SAR has
ordered 1.2 million SMARTICS cards. Hong
Kong law requires all citizens
above the age of eleven to carry an identity
card, and the estimated total
number of cards to meet this requirement
is about 6.8 million.
Infineon is a member of ACT Canada; for more
information about them, please
visit their web site at http://www.infineon.com.
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5. VISA TRIES TO JUMP-START SMART CARD LOYALTY
Source: CardTechnology (06/20)
Visa U.S.A.'s smart Visa Rewards service,
due to be launched later this
year, is designed to make it easier for card
issuers and merchants to offer
rewards to consumers with smart cards. Participating
issuers will register
their cards and merchants will register their
point-of-sale terminals with
Visa. Then, issuers, merchants or Visa itself
will be able to offer targeted
offers, says Patrick Gauthier, senior vice
president of smart card
applications at Visa. For instance, Visa
smart card issuer FleetBoston could
offer a discount to cardholders who pay with
the Fleet Fusion credit card
three times this month at Target stores in
Massachusetts. Consumers will be
able to redeem rewards on the spot, saving
merchants the 8 cents to 35 cents
it costs to handle a paper coupon, Gauthier
says. Target, which also has
issued 6 million Visa smart credit cards,
is the only merchant signed up for
the Visa service so far, Gauthier says. He
says Visa research shows
consumers would like a loyalty program that
offers them rewards when they
visit three to six of their favorite retailers,
including supermarkets,
department stores and home improvement centers.
MasterCard International
officials say they have no plans to offer
a similar nationwide service.
Visa Canada is a member of ACT Canada. For
more information about Visa,
please visit their web site at http://www.visa.com.
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6. HOTEL CHAINS USE SMART CARDS FOR LOYALTY
SCHEME
Source: CardTechnology (06/14)
London-based Millennium and Copthorne Hotels
plc has launched a loyalty
scheme using smart cards at its 18 hotels
in Europe and the Middle East. "In
Europe, smart cards will replace mag-stripe
cards in payment systems in the
next few years, so we are running with new
technology rather than adopting
one which will shortly be obsolete,"
says David Curtis-Brignell, director of
leisure, partnerships and loyalty marketing
for Millennium Hotels and
Resorts. Travelers who join the Millennium
PartnerCard program receive
rebates on their meals and hotel stays at
these hotels or at its partner,
the German Maritim Hotel chain. The hotel
chain initially will issue 55,000 Millennium PartnerCards. Similar launches
will follow in the United States,
Australia and Asia, adding up to 250,000
cards by 2003, according to
Millennium and Copthorne Hotels. The chip
card, supplied by France-based
Gemplus International S.A., also has a magnetic
stripe so the card can be
programmed as a key card during the member's
stay. The card, which uses an
8K-memory chip, will store the member's profile
as well as the number of
hotel stays and expenditures. The hotel chains
have equipped their reception
areas and other points of sale with smart
card reading terminals from
Ingenico S.A. of France. Each night the hotels
transmit the transaction data
to a central database system managed by German
data processor CPS. Members
can apply to the free program at a dedicated
Web site. They will receive a
membership number, which they can use to
check their rebate status online.
Additional benefits include the ability to
reserve a room online, late
checkout, a welcome drink, a free newspaper,
airline mileage, and a
newsletter with offers and promotions.
Ingenico Canada is a member of ACT Canada.
For more information about
either of the above listed companies, please
visit their web sites:
http://www.ingenico-ca.com & http://www.gemplus.com.
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7. CATHERINE JOHNSTON & KENNETH WONG
TO KEYNOTE ICMA'S 11TH ANNUAL CARD
MANUFACTURING EXPO
Source: ICMA Daily News (06/12)
Catherine Johnston, President and CEO of
the Advanced Card Technology
Association of Canada (ACT Canada), and Kenneth
Wong, faculty member of
Queen's School of Business, Kingston, Ontario,
Canada, will each present a
keynote address at the International Card
Manufacturers Association's (ICMA)
11th Annual EXPO, themed "Card Manufacturing
at the Crossroads." The world's
premier card manufacturing and personalization
event will be held September
29 - October 2, 2002, at the Westin Bayshore
Resort in Vancouver, British
Columbia, Canada.
Johnston will deliver the morning keynote
address "Identity Theft: Are You
at Risk?" and will discuss the effects
that the events of September 11, 2001
had on the future of smart cards. Additionally,
she will provide an overview
of the impact of identity theft and secure
ID, and the global trends, issues
and opportunities related to smart, optical
and emerging card technologies.
Following, in the afternoon, Wong will present
"Manufacturing and Marketing:
Selling What You Make and Making What You
Sell." He will examine the link
between marketing, manufacturing and customer
service, the reasons why these
areas can become uncoupled, and remedial
measures to ensure smooth
operations for businesses.
For ICMA 11th Annual EXPO 2002 exhibiting,
registration or sponsorship
information, or for information on becoming
a member of ICMA, contact Lynn
McCullough at (609) 799-4900; e-mail lmccullough@icma.com
or visit the ICMA
Web site at http://www.icma.com.
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8. CUBIC WINS $3.5 MILLION CONTRACT FROM
EDMONTON TRANSIT SYSTEM
Source: BUSINESS WIRE (06/11)
Cubic Transportation Systems has received
a $3.5 million contract from
Edmonton Transit System, in Edmonton, Alberta,
Canada, to deliver a
proof-of-payment fare collection system that
will be smart card-ready to
Edmonton Transit's 10 light rail stations
in the third quarter of 2003.
"Edmonton Transit is excited about being
a standard setter for the small-to
mid size systems wanting to capitalize on
the next-generation fare
collection technology," said Wayne B.
Mandryk, Manager of ETS. "We feel our
low-risk, turnkey solution from Cubic will
meet our management needs for a
light rail fare payment system of today,
and positions us well for the
possibility to expand to a contactless smart
card for bus as well."
For more information about Cubic, please
visit their web site at
http://www.cubic.com
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9. SMART CHIP TECHNOLOGIES & CONSUMER
ECONOMIC OPPORTUNITIES ANNOUNCE
PRODUCT DEVELOPMENT AGREEMENT
Source: SCTN (06/11)
Smart Chip Technologies (SCTN) and Consumer
Economic Opportunities Inc.
(CEO), announced a new product development
agreement.
Under this agreement, CEO will customize
SCTN's loyalty application,
e-llegiance™, so that it will run on the
Ingenico Elite 510™ dual magnetic
stripe and smart card capable point-of-sale
(POS) terminal, both as a stand
alone loyalty application and as a payment-integrated
application, including
all other necessary interfaces, such as uploading
transactions to
LoyaltyCentral™ via modem, payment switch,
or the Internet.
Additional development will include the modification
of e-llegiance™
software to conform to standard "C"
language specifications. The "C"
versions will be implemented using Ingenico's
touch screen, smart
card-capable eN-Touch 3000™ POS terminal
and on the LoyaltyCentral™ back-end
host system. The "C" versions of
SCTN's e-llegiance™ and LoyaltyCentral™
will expand the software's portability to
other POS terminals and smart
devices. According to the October 2001 Nilson
Report, Ingenico shipped 21%
of all credit/debit card authorization terminals
worldwide in 2000.
Smart Chip Technologies is a member of ACT
Canada. For more information
about either of the above mentioned companies,
please visit their web sites:
http://www.sctn.com & http://www.creditz.com.
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10. MASTERCARD & DATACARD SIGN STRATEGIC
ALLIANCE FOR SMART CARD SOLUTIONS
Source: CCNMatthews via COMTEX (06/18)
MasterCard International and Datacard Group
announced that they have formed
a strategic alliance to drive worldwide acceptance
of smart cards and
accelerate the implementation of open technical
standards. Through this
agreement, the two global smart card leaders
will cooperate on a variety of
key initiatives to support the deployment
and management of smart card
programs by MasterCard's member financial
institutions.
The multi-year agreement will provide MasterCard's
members with Datacard's
proven solutions for developing, testing,
personalizing and managing smart
cards. The solutions are specifically designed
to simplify the migration
from traditional magnetic stripe cards to
smart cards by creating and
collecting new smart card data and personalizing
the data needed on the
chip. In addition, MasterCard and Datacard
will provide MasterCard's members
with smart card security consulting services,
training and education
programs.
Both Datacard and MasterCard are members
of ACT Canada. For more
information about either company, please
visit their web sites:
http://www.datacard.com & http://www.mastercard.com.
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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.
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Please forward any comments, suggestions,
questions or articles to andrea(AT)actcda.com. If you would like to
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subject field. Please note that articles
contained in this newsletter have
been edited for length.
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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