May 29, 2003
Welcome to the May 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.

If you would prefer to receive this newsletter in plain text please send your request to andrea(AT)actcda.com.


IN THIS ISSUE:

1. Editorial Comment
2. MasterCard & Visa To Release Joint EMV Smart Card Personalization Specs
3. First EMV Deployment In South Africa
4. Loyalty Vendors To Share Patents & Establish Interoperability
5. Gemplus To Deliver Nationwide ID Smart Card Program In UAE
6. MasterCard Paypass™ Continues To Build Momentum
7. Sun & EDS Address Demand For Heightened Information Security With Smart Card Solutions For Canadian Gov't
8. Officials Sign Smart-Card Pact
9. Giesecke & Devrient And Siemens Business Services Win Larry Linden Award
10. Lasercard Gets $1.8 Million Order For Canadian Permanent Resident Card Program
11. Maximus Awarded $3.8 Million Smart Card Project By TSA


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

GENERAL
Canadian Payments Association ~ member since 1998
Interac Association ~ member since 1995
TDCT ~ member since 1996


UPCOMING EVENTS

Integrated Mobility Systems - Moving the Economy in conjunction with ACT Canada present:
The New Mobility Industry Forum
June 10 & 11, 2003
Toronto, ON, Canada
http://www.movingtheeconomy.ca/
ACT Canada members are invited to attend the June 11th cross industry briefing on the status of the IMS-MTE Consortium

EMEX Systems presents:
Getting Ahead of the Curve - Meeting Privacy Regulations and Managing Your Wireless/Mobile Exposures
June 24, 2003
Toronto, ON, Canada
If you would like to be sent a brochure please send an email to info(AT)actcda.com.

EMV Briefing Roadshow
July 7 - Toronto - Ontario Bar Association Conference Centre
July 9 - Ottawa - Courtyard Marriott (Byward Market location)
July 10 - Montreal - Le Centre Sheraton
http://www.actcda.com/calendar/symposium.htm
ACT Canada members receive complimentary passes & a 50% discount on additional registrations

Smart Card Alliance "Smart Cards in Government"
July 15 - 17, 2003
Arlington, VA, USA
http://www.smartcardalliance.org/
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (05/29)
On May 7, 2003, the Ontario government earmarked $40-million to help transit systems around Toronto create an integrated electronic fare system. Just last month we talked about the upcoming transit and transportation sector's New Mobility Forum and Cross Industry briefings to be held June 10th & 11th. (see http://www.movingtheeconomy.ca/ for the forum or contact ACT Canada re the briefings).

GO Transit and nine other transit systems, including York Region, Mississauga, Hamilton and Burlington, Brampton, Oakville, Oshawa, Whitby and Ajax/Pickering will replace their aging fare collection equipment with "smart card" readers connected to a central computer system that transfers money electronically.

The investment follows up on advice from the Central Ontario Smart Growth Panel that traffic gridlock can be avoided by making regional transit more convenient, Transportation Minister Frank Klees said as he announced the plan.

This follows years of planning, which is true of other projects in Canadian public and private sector pipelines. This suggests that we will see more progress and hear more announcements as the year unfolds.

With the growth in the Canadian market, ACT Canada also announced our Partnership and Sponsorship Program. The program was launched as of April 30 at which time AmenityOne, formerly known as Coinamatic, signed as our first partner.

This program allows key players in the market to increase their profile through ACT Canada's events, newsletter, web site and miscellaneous activities. With upcoming activities such as the IMS-MTE cross-industry briefing; government cross-industry meeting; EMV Briefing Road Show; and annual conference, this program provides an unprecedented level of exposure to multi-industry decision makers interested in advanced card technology.

For more information about ACT Canada and our activities, please visit our web site at http://www.actcda.com/.
2. MASTERCARD AND VISA TO RELEASE JOINT EMV SMART CARD PERSONALIZATION SPECIFICATION
Source: MasterCard (05/13)
MasterCard International and Visa are jointly working together to develop a common standard for the personalization of EMV applications such as MasterCard's M/Chip and Visa Smart Debit/Credit (VSDC). The standard is known as the EMV Card Personalization Specification and is expected to be published next month under the auspices of EMVCo.

Smart card personalization represents a significant cost component in the production of EMV smart cards. This initiative was undertaken to standardize the process, allowing one consistent process to be used for both M/Chip and VSDC making it more efficient and thereby reducing the overall costs of chip migration.

The combined volumes of MasterCard's M/Chip and Visa's VSDC smart cards utilizing a common data preparation and personalization infrastructure are expected to result in reduced costs through economies of scale. The complexity of the personalization process is reduced, thereby lowering the initial cost and on-going maintenance of personalization systems. New product releases can be brought to market quickly and easily with a minimum of set up time. Card issuers are likely to have more data preparation and personalization suppliers to choose from and will find it easier to switch between suppliers who have adopted these specifications.

According to Jim Lee, senior vice president, Emerging Technologies, Visa International: "There has been an outstanding financial industry requirement to standardize and streamline EMV smart card personalization. The EMV Card Personalization Specification brings a new level of consistency to the personalization aspects of migration from magnetic stripe to smart card technology. "

Simon Pugh, vice president, Infrastructure & Standards, MasterCard International, said, "The EMV Card Personalization Specification is a major step forward in facilitating standards for smart cards, thereby simplifying implementations for financial institutions."

Compliance to the specification will be recommended rather than mandated, but it is anticipated that these specifications will be broadly adopted by EMV smart card issuers and personalization providers because of the benefits offered to all parties involved.

Both MasterCard and Visa are members of ACT Canada. For information about any of the above listed organizations please visit their web site: http://www.emvco.com/; http://www.mastercard.com/; and http://www.visa.com/.
3. FIRST EMV DEPLOYMENT IN SOUTH AFRICA
Source: Ingenico (04/29)
First National Bank, the main acquiring banking institution in South Africa with more than a third of the South-African market representing an installed base of over 130,000 terminals, has selected Ingenico as the sole supplier for its EMV deployment program.

This agreement will allow Ingenico to install up to 10,000 terminals during the next twelve months with potential orders of 30,000 to 40,000 terminals.

Since 1998, Ingenico has been on the South-African market where electronic payment and secured transactions are particularly developed and fast growing.

Other banks but also loyalty transaction or GSM prepayment operators should follow. Four You Pty company, for instance, ordered 4,000 terminals for GSM telephone prepaid card downloading, which will be installed this year.

Ingenico is a member of ACT Canada. For more information, please visit their web site at http://www.ingenico.com/.
4. LOYALTY VENDORS TO SHARE PATENTS & ESTABLISH INTEROPERABILITY
Source: BUSINESS WIRE (05/22)
Catuity, Inc., Visa USA, Visa International and Welcome Real-time announced they have entered into a patent cross license agreement that will increase the availability of interoperable systems for smart-card based loyalty rewards at the point of sale.

By creating the conditions for access to multiple providers, this agreement will let Visa Members and partners benefit from best of breed components and systems to deploy smart-card based loyalty solutions.

Under the Visa Loyalty Program Patent Agreement, Catuity, Visa and Welcome will cross license existing and future patents for Visa smart loyalty programs. This cross license will be worldwide and royalty-free until the last patent expires. The cross license will extend to all Visa affiliates, members and merchants. Participants will develop and promote interoperable loyalty solutions by integrating the Visa interoperability toolkits within their platforms. These toolkits allow cards with one technology to be used in terminals connected to a different loyalty platform, and for data from different loyalty processing centers to be aggregated to enable customer service activities.

This agreement is designed to benefit all users of Visa loyalty programs on smart cards and is an important step in achieving more rapid expansion of the market for loyalty programs using smart cards. Parties to the agreement are licensing their patent portfolio and committing to developing, marketing and deploying interoperable solutions.

Aneace Haddad, President and CEO of Welcome Real-time said, "Adoption of a common interoperability platform immediately removes barriers to the deployment of value-added services for smart cards. Card issuers and merchants can mix and match software products from different vendors, which we believe will encourage innovation and accelerate the development of a dynamic industry. We deeply appreciate Visa's active encouragement of the industry's common adoption of this interoperability platform."

Visa Canada Association is a member of ACT Canada. For more information on any of the above listed companies please visit their web site: http://www.visa.com/; http://www.catuity.com/; and http://www.welcome-rt.com.
 
5. GEMPLUS TO DELIVER SMART CARDS FOR NATIONWIDE ID PROGRAM IN THE UNITED ARAB EMIRATES (UAE)
Source: Gemplus (04/30)
Gemplus International SA announced it will deliver smart card technology and related services to the United Arab Emirates (UAE) for its nationwide ID program. The contract involves the issuance of over two million smart ID cards to the entire UAE population beginning summer of 2004.

Gemplus acts as a sub-contractor delivering smart cards, software, and services from its "ResIDent" secure ID solution, while Sagem is the prime contractor providing advanced biometrics technology with the AFIS (Automated Fingerprint Identification System) and system integration. The UAE nationwide ID program marks the second successive contract win in the Middle East for the Sagem-Gemplus partnership, which was formed earlier this year. The first contract was in the Sultanate of Oman, scheduled to rollout end of 2003.

The core objectives of the UAE ID program are to enhance national identification procedures throughout the country by providing better, faster, and more accurate public services for its citizens, and to address identification issues through a higher level of authentication by using smart card-based biometrics. The UAE Ministry of Interior has invested in a modern system that utilizes open Java CardŌ technology, in order to deliver a flexible ID solution capable of easily accommodating future e-government applications.

Once the program rolls-out, citizens and residents of the UAE will be able to securely and conveniently store their personal identity credentials on the cards. Over time it is possible to extend the functionality of the card by adding applications such as driver's license, border control, and emergency medical data. The ID cards combined with biometric recognition can be checked through both portable terminals and automatic electronic validation.

Gemplus is a member of ACT Canada. For more information, please visit their web site at http://www.gemplus.com/.
6. MASTERCARD PAYPASS™ CONTINUES TO BUILD MOMENTUM AS "THE SIMPLER WAY TO PAY"
Source: MasterCard (05/13)
MasterCard International announced that its innovative "contactless" payment initiative, MasterCard PayPass™, continues to build momentum. Now in its fourth month, the Orlando, Florida MasterCard PayPass market trial has 16,000 cardholders and nearly 60 merchant locations participating. Additionally, MasterCard recently began working with Nokia to incorporate MasterCard PayPass into mobile phones. A Nokia market trial currently taking place with retailers in the Dallas, Texas area allows consumers to tap or wave their phone to make payments simpler.

"MasterCard is pleased with how PayPass has grown since we launched our market test four months ago. We're already evolving PayPass to meet growing consumer needs that have resulted from the Orlando pilot," said Art Kranzley, EVP and chief e-Business officer, MasterCard International. "Over the next few months, MasterCard will continue to lead the industry in introducing additional PayPass-related innovations, delivering to consumers more convenient payment solutions to make their everyday purchases."

Orlando Trial Update
In January, MasterCard began working with leading financial institutions - Chase, Citibank and MBNA - to trial MasterCard PayPass within the Orlando, Florida area. The trial is designed to test the real-world application of a contactless payment card and the operational reliability, interoperability, and cardholder and merchant experiences of MasterCard PayPass.

In the Orlando trial, several innovations in radio frequency (RF) technology have led to the installation of several creative solutions at the point-of-sale. Customized solutions for gas pumps, theatre box office windows and drive-thrus were among the innovations installed at participating Orlando PayPass retail locations. These solutions are available at significantly lower costs than previously available radio frequency offerings and required little or no software modifications at the point-of-sale.

Dallas Expands MasterCard PayPass Orlando Market Trial
MasterCard has been working with Nokia to incorporate the MasterCard PayPass feature into their mobile phones in a market trial currently taking place with retailers in the Dallas, Texas area. By enabling a Nokia mobile phone with MasterCard PayPass™, consumers can tap or wave their phone to make payments simpler. Nokia has also developed a mobile commerce messaging platform to enable retailers to better serve and communicate to their customers.

The Nokia phone SmartCover™ is embedded with a contactless chip and a radio frequency circuit. The chip has been specially programmed with pre-registered MasterCard payment account information and is compliant with the MasterCard PayPass specification. When consumers tap or wave their Nokia phones on the specially equipped PayPass readers at the point-of-sale, payment account information is transmitted to the terminal. The transaction is then processed through MasterCard's highly trusted payment network in the normal way. A system provided by JPMorgan Chase processes the payment account information. Just a few seconds after consumers tap or wave their phone, payment confirmation is received and they are on their way.

MasterCard is a member of ACT Canada. For more information, please visit their web site at http://www.mastercard.com/.
7. SUN & EDS ADDRESS DEMAND FOR HEIGHTENED INFORMATION SECURITY WITH SMART CARD SOLUTIONS FOR CANADIAN GOVERNMENT ORGANIZATIONS
Source: Canadian Newswire (05/14)
Sun Microsystems of Canada Inc. and EDS Canada announced they will collaborate to address the growing demand for smart card solutions from the Canadian public sector. The offering will focus on a comprehensive, highly secure smart card solution designed specifically for governments.

"Today's global environment demands that governments must provide secure identification and dynamic information recording methods in order to effectively meet the needs of its citizens," said Michel Brazeau, vice president, Government Global Industry Solutions, EDS Canada. "We believe that smart card technology can help government organizations become more agile and better serve the growing demands of their constituents for privacy, security and service."

"A single smart card can host multiple applications, helping to reduce costs to government agencies and simplify the lives of its employees and constituents," said Norman LeCouvie, Director, Government Business Development for Sun Microsystems of Canada. "The functionality inherent in Java Card technology securely 'firewalls' all applications on the card from each other to protect the integrity and privacy of each application."

Government agencies are currently issuing Java Card technology-based smart cards as their new identification cards to replace existing "paper" identification cards. For example, the U.S. Department of Defense is deploying Java Card technology-based Common Access Cards as their new military ID cards to 4.3 million active duty U.S. military personnel and eligible contractors.

In addition, the Government of Taiwan is issuing a Java Card technology- based smart card as its new health insurance identification card to all 24 million residents.

Sun and EDS have created a comprehensive starter bundle solution that meets the specific smart card needs of the three levels of Canadian government. The two companies have introduced the bundle, which includes cards, readers, Sun hardware, software and services, at a competitive price point to accelerate the adoption by the Canadian public sector.

EDS is a member of ACT Canada. For more information on the above listed companies please visit their web site: http://www.eds.com/ and http://ca.sun.com/.
8. OFFICIALS SIGN SMART-CARD PACT
Source: The Seattle Times (04/30)
Transit officials from throughout the Puget Sound area signed an agreement to offer a regional smart-card payment system for transit riders in 2006.

"Life needs simplicity like this," said Ron Sims, King County Executive and Sound Transit board chairman.

Sound Transit, King County Metro, Community Transit of Snohomish County, Kitsap Transit, Pierce Transit, Everett Transit and Washington State Ferries signed the pact, while Seattle monorail officials have expressed interest. Any agency in Washington, Idaho or Oregon can join later, and cards could be used to pay for highway tolls or parking fees, Sims said.

An estimated 80% of riders are expected to use the prepaid cards, which are flashed at an electronic reader as someone boards a bus or train. The deal includes a $31 million contract with ERG for machines and software, plus $33 million for the first 10 years of operations. But transit agencies could reduce some existing operating costs.

ERG Group is a member of ACT Canada. For more information, please visit their web site at http://www.erggroup.com/.
9. GIESECKE & DEVRIENT AND SIEMENS BUSINESS SERVICES WIN LARRY LINDEN AWARD
Source: Giesecke & Devrient (05/12)
Giesecke & Devrient (G&D) and Siemens Business Services were presented with the 2003 Larry Linden Award for Innovative Security Technology by CardTech/SecurTech (CTST) for the Macao Multifunction Smart ID Card.

The Larry Linden Award is given to an organization that implements an innovative, well-managed security technology. Criteria include a live program that is current and on going, superior project management, sensitivity to consumer/user needs, support of broad organizational goals, and a spirit of perseverance.

Leading e-government initiatives in Asia, the Macao Special Administrative Region in China contracted Siemens Business Services and G&D to implement a multifunction smart identification card, which is being distributed to its 460,000 residents over the next four years. The smart card currently serves as Macao's new identity card and includes a biometric application and special security features within the card body and chipset. It is aimed that the smart card will ultimately serve as a multi-application card, combining the ID card, driving license, student card, medical card, and electronic wallet.

Siemens Business Services is responsible for project management, system integration, and delivery of the registration and issuance system.

Giesecke & Devrient is responsible for supplying the central components for a complete smart card issuance system, including the Java- and Global Platform-based multifunctional smart cards and personalization system, the key and card management system and the PKI including the certificate authorities.

"Introducing the multifunction smart ID cards to Macao places us at the forefront of e-government initiatives in Asia and provides our citizens with a technologically advanced smart card that will be integral to their daily lives," said Mr. Isaac Ieng Kit Lai, Director, Identification Department, the Government of the Macao Special Administrative Region. "This Award recognizes the collaborative efforts by G&D and Siemens Business Services to bring this idea to reality."

Giesecke & Devrient is a member of ACT Canada. For more information on either of the above listed companies please visit their web site: http://www.gdai.com/. and www.siemens.com/sbs.
10. LASERCARD GETS $1.8 MILLION ORDER FOR CANADIAN PERMANENT RESIDENT CARD PROGRAM
Source: LaserCard (05/08)
LaserCard Systems Corporation has received a $1.8 million order for LaserCard® optical memory cards to be used as Canadian government Permanent Resident Cards.

The $1.8 million order calls for continuing monthly deliveries of optical memory cards in quantities to stay ahead of card personalization requirements. Including the new order, LaserCard Systems Corporation has received card and equipment orders totaling $5.8 million thus far under the new Canadian Permanent Resident Card program, which started last year.

LaserCard is a member of ACT Canada. For more information, please visit their web site at http://www.lasercard.com/.
11. MAXIMUS AWARDED $3.8 MILLION SMART CARD PROJECT BY TSA
Source: BUSINESS WIRE (05/09)
The U.S. Transportation Security Administration (TSA) has awarded MAXIMUS a 5 month, $3.8 million contract to assist TSA in field testing various technologies that will lead to a common and universally-recognized Transportation Worker Identification Credential (TWIC) that could potentially be used by 12 million transportation workers at seaports, airports, and land transportation hubs.

MAXIMUS will lead the effort to field-test various technologies that will lead to a common and universally-recognized biometric credential for transportation workers requiring unescorted access to secure locations within a transportation facility. During the evaluation phase, MAXIMUS will begin to test and evaluate different types of access control technologies at multiple facilities, across different modes of transportation at several pilot sites.

These pilot sites include the Mid-Atlantic Region of Delaware, New Jersey, and Pennsylvania, and the Los Angeles/Long Beach area in California. MAXIMUS primary team member for this project is Electronic Data Systems. Other key team members include: Information Spectrum Inc.; SEI Technology; DataTrac; ISR Solutions; ActCom; and ActivCard.

One of the key challenges of the TWIC card is to issue an easily used and recognized credential that helps improve the security of our nation's transportation infrastructure while facilitating the flow of commerce and protecting individual privacy.

For more information about MAXIMUS, please visit their web site at http://www.maximus.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. 21.
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: http://www.actcda.com/
mail: 85 Mullen Drive, Ajax, ON, L1T 2B3