January 22, 2003
Welcome to the January 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 http://www.actcda.com. Please feel free to forward this to your colleagues.


IN THIS ISSUE:
1. Editorial Content
2. 'Smart Card' For Crossing Border Urged By CEOs
3. Driving Solutions Roundtable
4. Electronic Identity Card For Belgian Citizens
5. ERG Selected For Major Washington DC, Maryland & North Virginia Transit Fare Collection Project
6. New England To Adopt Smart Cards
7. American Express Puts Its Chip Card's Chip To Work
8. Visa To Issue Passwords Through Canadian Banks
9. U.S. Smart Cards: Loyalty Will Have To Pay Off
10. Keycorp Earns Turkish Delight With 3-Year Agreements
11. Continental Airlines Tests Registered Traveler Smart Card
12. LBHR & ePaymentsnews Network Launch Career Centre


ACT CANADA WOULD LIKE TO THANK OUR NEW & RENEWING MEMBERS:

GENERAL
Hitachi ~ member since 2001
LaserCard ~ member since 1999
Xebec ~ member since 2001
ATTENTION ACT CANADA MEMBERS:
Network & Education Program Survey:
ACT Canada is in the process of rebuilding their Network & Education Meeting Program and is requesting your feedback. Please take a moment to answer a brief survey (8 questions) to help develop a program which better suits your needs. Please click on the link below to complete the survey.

http://www.surveymonkey.com/s.asp?u=87699156284

In the past the Network & Education Meeting Program provided an opportunity for professionals to network at a luncheon meeting featuring a guest speaker. These presentations focused on topics pertinent to the industry and market place. Your feedback is important whether or not you have attended these meetings in the past.

If you have any questions or would like to further discuss this program, please contact Andrea McMullen at 905 426-6360 ext.24 or email andrea(AT)actcda.com.

Upcoming Events:
We have negotiated additional discounts for our members at CardTech/SecurTech 2003, May 12 - 15, Orange County Convention Center, Orlando.

Register early for CTST 2003 & save:

Before March 1 - save 35%: CDN$935 or US$594.25
Before April 1 - save 25%: CDN$670 or US$424.25
After April 1 - save 15%: CDN$400 or US$254.25

For more information about the CTST 2003, please visit their web site at http://www.ctst.com. Please contact Andrea McMullen for a link to the CTST 2003 discounted registration form - andrea(AT)actcda.com.

CIT 2003 - Spain's 6th annual payment, loyalty and smart card tradeshow - is offering a 2 for 1 registration deal for all international delegates. CIT 2003 takes place in Madrid, February 25 - 27, 2003. For more information please visit their web site at http://www.iir-cit.com/indexIngles.asp.

ACT Canada members are also entitled to a 50% discount at our February 17th, 2003 Driving Solutions Roundtable. For more information visit http://www.actcda.com/calendar/symposium.htm.

The Smart Card Alliance mid-winter meeting - "Identity: Technology and Policy Issues of Trust", will take place February 12-13 at the Salt Lake City Center Hilton. For more information, please visit http://www.smartcardalliance.org/alliance_activities/next_meeting.cfm.
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (01/21)
It is a new year and a different market. This month we will look at several new initiatives and lead off with a call from the Canadian business community to use smart cards to support a "new security and economic coalition". (see #2 Smart card for crossing border urged by CEOs).

When companies first advocate and adopt the use of new technologies to support their business plans, a corner is turned. It is crucial that we move quickly to take all necessary steps to prepare for rollouts. ACT Canada, over the past two years, has been at the forefront of this work and invites you to join us for our next roundtable, February 17th (details in #3 Driving Solutions Roundtable).
2. 'SMART CARD' FOR CROSSING BORDER URGED BY CEOS
 Source: National Post, Michael Higgins (01/15)
Canadian business leaders are calling for a North American identity card that could be swiped for quick passage between Canada and the United States.

The voluntary "smart card" would allow for the free flow of people and goods, a move seen as necessary by the Canadian Council of Chief Executives to develop a new security and economic coalition.

"Basically, what we are talking about is reinventing the border," said Tom d'Aquino, president of the council, which represents 150 of Canada's largest corporations.

Denis Coderre, Canada's Immigration Minister, is exploring the idea of a national identity card for citizens with such biometric identifiers as a fingerprint or optical scan.

His move came after Colin Powell, the U.S. Secretary of State, said in Canada last November that Americans were interested in talking with officials about how to improve the security of Canadian passports, including a requirement for biometric information.

However, George Radwanski, the Privacy Commissioner, has said a national card is "completely unjustified" and would open the door to situations in which Canadians are stopped by police and asked: "Your papers, please."

In November, a COMPAS poll showed 57% of Canadians were in favour of carrying a high-tech identity card, with 30% saying it was a bad idea.

Mr. d'Aquino said Canada and the United States should examine four areas of co-operation -- borders, the military, economic efficiencies, such as regulations, and the security of resources, for example telecommunications, electricity, oil and gas. A joint commission could be established to help govern the four areas.

Mr. d'Aquino said technology should be employed to open up the border between the United States and Canada, and suggested a North American identity card.

"Those that wanted to cross the border would have a North American identity card with the necessary encryption so that if you wanted to cross at Niagara or Windsor or wherever, you just flash that card at the receptor or whatever's available and away you go," Mr. d'Aquino said.

Acting now and putting forward the proposals to Washington would ensure there was no loss of sovereignty to Canada, he added.

The proposals were debated by the CEOs during a two-day meeting in Toronto.

Paul Martin, the front-runner for the Liberal leadership, addressed the meeting on Monday but said a border should continue to exist between the two countries. "There will always be a border. There's going to be a border between our two countries and there ought to be," he said before the meeting. However, he did agree the border should not be a barrier to economic growth and job creation.

In 2000, the federal government dismissed consideration of a national identity card to replace the Social Insurance Number because of public concerns about privacy and a potential cost approaching $3.6-billion.
3. DRIVING SOLUTIONS ROUNDTABLE - FEBRUARY 17, 2003 - TORONTO
Source: ACT Canada (01/21)
ACT Canada has committed to bring vested parties to the table and help them identify solutions to shared problems through our series of working roundtables. Our first, last October was the sold-out. The unprecedented number of organizations and broad range of sectors that met in October indicate not only a readiness to move forward, but also the willingness of issuers and suppliers to work together to drive solutions.

Join us on February 17th 2003 to continue this process and Drive Solutions into the Market. Information about this event is contained in the events section of our web site at http://www.actcda.com/calendar/symposium.htm.
4. ELECTRONIC IDENTITY CARD FOR BELGIAN CITIZENS
 Source: SchlumbergerSema (01/16)
SchlumbergerSema announced its participation in the Belgian Personal Identity Card (BelPIC) - the first large-scale deployment of electronic identity cards in Europe. This smart card will give Belgian citizens simpler, faster and more secure access to administrative procedures from the first half of 2003.

Approximately 11 million cards will be produced and distributed to Belgian citizens over the next five years, with an initial phase covering 11 municipalities spread throughout the country, due to begin in the 2nd quarter of 2003. This new card can be used with a card reader connected to a PC - for example in people's homes - in public kiosks installed in towns, in local authority buildings and in other institutions.

Citizens will be able to access numerous e-government services, such as:
- Access to electronic voting (e-voting), and in particular local consultation by e-referendum
- Tax returns
- Changes of address
- Obtaining civil records
- Declaration of household employees
- Declaration and management of birth certificates

With its ICitizen Crystal operating system and its microprocessor, certified EAL5+, SchlumbergerSema offers identity card holders the advantage of a high security system for protection of their personal information. Every cardholder will have a pin code, which he or she will keep secret, and the card will generate a legally valid electronic signature for declarations and administrative procedures.

SchlumbergerSema is a member of ACT Canada. For more information please visit their web site at http://www.slb.com/smartcard.
 
5. ERG SELECTED FOR MAJOR WASHINGTON DC, MARYLAND & NORTH VIRGINIA TRANSIT FARE COLLECTION PROJECT
 Source: ERG Group (01/20)
ERG Group along with Northrop Grumman Information Technology has been selected by the Washington Metropolitan Area Transit Authority (WMATA) to install and operate a new Regional Customer Service Centre for its smart card based fare collection system, known as SmarTrip®.

The WMATA project will begin a new era of integrated transit in the Washington DC area, Maryland and Northern Virginia allowing passengers to use a single smart card to pay fares across 17 transit systems. The SmarTrip system is expected to grow to a card base of more than one million over a five-year period.

The project involves the establishment and operation of a smart card customer service centre, card management and the clearing and settling of smart card transactions across 17 transit. The new system will interface with existing installed hardware such as gates and readers. WMATA has managed the tender and evaluation process on behalf of the participating transit agencies.

ERG will be responsible for the management of smart cards and operation of the data processing system incorporating clearing, settlement and financial management.

The initial five-year contract, worth approximately US$20 million, comprises the supply, installation and operation of the system. Northrop Grumman IT will be responsible for the distribution of smart cards and operation of the customer service centre in the Washington DC area as a subcontractor and partner to ERG. Work is expected to commence on the project during the first quarter of 2003.

ERG Group is a member of ACT Canada. For more information, please visit their web site at http://www.erggroup.com.
6. NEW ENGLAND TO ADOPT THE SMART CARD
 Source: E-Smartransaction Issue 6, Volume 1 (01/17)
One county in each of the six participating states (Connecticut, New Hampshire, Maine, Massachusetts, Vermont and Rhode Island) has been selected to participate in this 21-month pilot (which is to start in August of 2004) in which cardholders will use their cards to purchase health services and food through the U.S. Department of Agriculture's Women, Infants and Children (WIC) program, the Immunisation program and Head Start.

The chips will store such info as immunization and health records (cutting the need to fill out forms when visiting different clinics) as well as approved foods (for the WIC program) which cardholders can purchase from the grocer's.

There are to be 10,000 participants as well as over 600 POS terminals at some 90 retailers and over 20 clinics participating. Hitachi has won the contract for supplying these hybrid smart/mag-stripe cards, providing 32 Kilobyte chips for the cards, which are to be manufactured by Giesecke & Devrient.

Hitachi and Giesecke & Devrient are members of ACT Canada. For more information about either organization, please visit their web site at: http://www.hitachi.com and http://www.gdai.com.
7. AMERICAN EXPRESS PUTS ITS CHIP CARD'S CHIP TO WORK
 Source: CardTechnology (01/07)
American Express is promoting an Internet convenience add-on for its Blue card that takes advantage of the little-used chip on the AmEx smart card. Consumers can download ID Keeper software to the Blue card and use it to store their favorite Web sites, user name and password combinations, credit card numbers and billing and shipping information, and other data. American Express quietly began offering ID Keeper through the Blue card Web site last month.. More recently, AmEx began e-mailing Blue cardholders encouraging them to sign up for the free software. AmEx has e-mail addresses for 4.5 million of the 6 million consumers with Blue cards, according to an industry source. An American Express spokesperson called the December introduction of ID Keeper a "soft launch," with a formal announcement expected within a few weeks. AmEx became the first U.S. credit card issuer to launch a smart card when it introduced Blue in late 1999. However, cardholders have shown little interest in the Internet-security features that AmEx developed for the smart card chip. A survey last year by Atlanta-based Brittain and Associates found fewer than 1% of Blue cardholders were using the chip card to secure online purchases.

American Express Canada is a member of ACT Canada. For more information please visit their web site at http://www.aexp.com.
8. VISA TO ISSUE PASSWORDS THROUGH CANADIAN BANKS
 Source: IT Business, Neil Sutton (01/13)
Visa Canada will be taking steps later this year to combat consumer concerns about shopping online by providing Internet passwords through issuing banks.

Visa Canada's "Verified by Visa" program will be introduced in April. It is a joint effort on behalf of Visa, the card-issuing banks and the online retailers. Visa Canada is asking participating merchants to install a small piece of software on their sites. If a consumer makes a purchase on a participating site, a message is sent to the issuing bank which responds with a pop-up window requesting the password.

To encourage merchants to sign up, Visa Canada will protect them from disputed charges. " It's kind of a chicken and egg," said Susan MacKeown, the director of e-Visa, Visa Canada's online division. "We need both merchants and card holders. It's hard to entice merchants if they have to wait until the card holders are all signed up before they get any benefit for it."

The program has been operating with Visa's U.S. customers for a year, but it's too early to tell what the impact has been on their spending habits, said MacKeown. She added that other card issuers like MasterCard and American Express have shown interest in using the core technology behind "Verified by Visa" called 3-Domain Secure, which works with the Secure Socket Layer (SSL) incorporated into most browsers.

Visa released holiday season online shopping statistics (covering Oct. 1 to Dec. 31, 2002) that say the number of Internet purchases in Canada doubled over the previous year. But "there's a lot of room for growth yet," said MacKeown.

A November 2002 survey conducted by Maritz: Thompson Lightstone for Visa Canada revealed that 85% of Internet users said they were not planning to purchase gifts online.

"Far and away, security and fraud concerns were the top issues. A lot of surveys simply say, 'Yes, I'm concerned,' but these are people saying, 'I am not shopping because of security and fraud concerns,'" said MacKeown.

The study went on to state that 48% of Canadian consumers would feel more comfortable shopping online if a password program was introduced.

While security concerns have dissipated somewhat over the last few years, some consumers still have qualms about Internet purchases, said Peter Stange, analyst in the Toronto office of the Boston Consulting Group.

"I think a password system can alleviate some of those fears, but perhaps not all of them," he said. "It's probably a step in the right direction in terms of providing reassurances to consumers."

MacKeown said all Canadian Visa-issuing banks should be on the program within a year.

Visa Canada Association is a member of ACT Canada. For more information please visit their web site at http://www.visa.ca.
9. U.S. SMART CARDS: LOYALTY WILL HAVE TO PAY OFF!
 Source: E-Smartransaction Issue 6, Volume 1 (01/17)
According to IDC/Meridien Research, the success loyalty programs such as that offered by Target, are paramount to the success of the smart banking card in the United-States.

The number of smart cards issued in the U.S. (including smart card-based products such as the Speedpass) could grow from 35 million at present, to 69.5 million by 2007. But this growth rate is dependent on the success of loyalty schemes such as that offered with the Target smart visa: if the schemes aren't a success, the number of issued smart cards by 2007 would have to undergo a recount, bringing it down to 35.6 million cards.

"If [such programs] are successful," explains Aaron McPherson of IDC/Meridien Research, "we can expect other major chains to follow suit. But if they are not successful, people will say 'If Target couldn't make it work, how can we make it work?'".

The idea is obviously to show cardholders that the chip on their card gives them something. To this effect, Target (which has issued over 7 million of its smart Visa cards) plans to launch an e-coupon scheme which consumers will be able to download onto their cards from the Internet or from in-shop kiosks.

On the brighter side, IDC/Meridien predicts growth in RFID smart cards for payment (such as the Exxon Mobil Speedpass) and mass transit cards, regardless of the success or failure of smart banking cards, which should grow from 5.4 million units at present to 20.4 million units by 2007.
10. KEYCORP EARNS TURKISH DELIGHT WITH 3-YEAR AGREEMENTS
Source: ePaymentsnews Network (01/08)
Keycorp Limited has won a bid to provide a range of electronic payments solutions and services to Turkish Oyak Teknoloji (Oytek). Through Oytek, Keycorp has received an initial order for 10,000 K23 merchant terminals from Oyak Bank.

Keycorp anticipates that Oytek will deploy over 30,000 Keycorp EMV (Europay MasterCard Visa) smartcard-enabled payment terminals and more than two million MULTOS smartcards. Keycorp will also provide training, technology consultancy and a range of value-added services. It is expected that over the three-year period, the Oytek relationship will generate around $30 million in revenue for Keycorp.

Keycorp will be working with Oytek to support them in developing new applications and solutions on cards and terminals that deliver value to the end users.

Keycorp Canada is a member of ACT Canada. For more information, please visit their web site at http://www.keycorp.ca.
11. CONTINENTAL AIRLINES TESTS REGISTERED TRAVELER SMART CARD
Source: CardTechnology (01/04)
Select frequent fliers of Continental Airlines can participate in a "registered traveler" program that uses contactless smart cards storing a biometric identifier to help them get through the airport more quickly. The I@Pass program, provided by aviation systems integrator ICTS International N.V., has been tested since last April at Newark Liberty International Airport on Continental Airlines flights to Tel Aviv, Israel, according to ICTS. This month, ICTS expanded the I@Pass program to Continental Airlines flights from Newark to Schiphol Airport in Amsterdam, says the company. ICTS is using 8K contactless smart cards from Rosh Pina, Israel-based OTI Ltd. When certain passengers check in, they can enroll in the program for free, says Ohad Bashan, president of OTI's American division, OTI America. Bashan would not disclose the criteria Continental uses to choose which passengers participate, or how many are enrolled in the program. The passenger's finger is scanned and the digitized version of the image is stored on the contactless smart card, as well as personal information, says Bashan. Once enrolled, I@Pass members can check into their flights at special terminals that scan their passports and compare the live image of their fingerprint to the one stored on the smart card. ICTS chose contactless smart cards because they communicate to the reader via radio waves, which enables passengers to get through the terminal more quickly, says Bashan.
12. LBHR & EPAYMENTSNEWS NETWORK LAUNCH CAREER CENTRE
Source: ePaymentsnews Network (01/19)
ePaymentsnews Network is pleased to announce the launch of The ePaymentsnews Career Centre, an industry-focused career centre and recruitment resource for payments industry professionals. The Career Centre has been created as the result of an alliance between ePaymentsnews and LBHR International Ltd. LBHR International Ltd is an experienced Search & Selection network with a specialised focus on the Card Payment and e-payment industry sectors.

The Career Centre is geared toward financial services providers, retailers, telecommunications players and other interested parties. Ultimately our aim is to assist our subscriber base in the recruitment of key personnel but the Career Centre will also enable users to participate in discussions with the global ePayments community, as well as search a knowledge base of the answers to frequently asked questions in our sector.

For more information about the Career Centre, please visit http://www.epaymentsnews.com/modules.php?name=Careers-centre.

LBHR is a member of ACT Canada. For more information, please visit their web site at http://www.lbhr.com.
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