July 29, 2003
Welcome to the July 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. Italian Gov't Places $2.4 Million Order For Digital National ID Cards
3. American Express Expands Availability Of New "Contactless" Payment Product
4. Coinamatic Appointed Cdn. Distributor Of CALE Pay & Display Parking Devices
5. Inside ID Conference Announces Advisory Board:
6. CPI Ready To Support Visa Canada Member Institutions As They Migrate
7. Public Roll Out For E-Ticketing System On London's Transport
8. Gemplus Partners On EMV Card Personalisation In Turkey
9. ICAO Looks To The EMV Experience
10. Schlumberger To Provide EMV Smart Cards To National Australia Group Europe

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

PRINCIPAL:
Visa Canada Association ~ member since 1995

GENERAL:
ACI Worldwide ~ member since 1998
CGI ~ member since 2000
EDS ~ member since 2001

GOVERNMENT:
Treasury Board Secretariat ~ member since 2002

ASSOCIATE:
Canadian Life and Health Insurance Association

ATTENTION ACT CANADA MEMBERS:

As part of the Department of Foreign Affairs and International Trade, the Canadian Trade Commissioner Service is a network of more than 500 business professionals working in Canadian embassies in 140 cities worldwide. Trade Commissioners find international opportunities for Canadian companies and help international buyers find Canadian products and services. More than 20 trade commissioners from around the world will be on site at COMDEX Canada 2003. Drop by the Trade Commissioner Service booth anytime during the show or register for the Export Café, which will take place on the morning of Wednesday, September 17, 2003. To register, contact Pooja Shah at (416) 973-1909 or email shah.pooja(AT)ic.gc.ca
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (07/29)
In the weeks since the Visa Canada announcement we have seen a number of other announcements from acquirers and suppliers, indicating broad support for a move to chip. At the ACT Canada EMV briefings in Toronto and Ottawa, participants heard about conversions in England, Europe, Asia Pacific and other areas. The panel of international speakers showed that we will be able to leverage those experiences as we move forward.

They also talked about fraud migration. We started to track this when France first moved to chip in the early 90s. The pattern is consistent. Fraud starts to migrate when issuers announce a move to more secure cards. This often results in a shift of fraud to another issuer, or a geographical shift to a bordering country. In Canada, we need to watch for increased fraud related to social benefit cards that can be counterfeited and sold on the black market. This is already a source of criminal revenue, as evidenced by the cards found whenever law enforcement agencies conduct raids on illegal card "factories".

Governments in Canada are increasingly concerned with counterfeit cards and the role they play in identity theft. We strongly encourage them to pass all necessary legislation to make this fraud a crime in Canada. To help all levels of government, ACT Canada is forming a workgroup focused on identity protection. Members from all levels of government are invited to work with key industry experts to understand the impact of emerging global standards; the opportunities afforded by emerging infrastructure and discuss the implications of multi-jurisdictional programs to benefit all Canadians. They are also invited to participate in the newly formed government business case workgroup, where we are looking at international government card programs and components of business cases/rationales for federal, provincial and municipal governments in Canada. Both work groups will report to the ACT Canada National Issuer and Infrastructure Committee. For more information, please email melissa(AT)actcda.com.

In the past week, a story surfaced about our Maple Leaf Card, Citizenship and Immigration Canada's card for permanent residents. The platform for this card is a laser (optical) track, an advanced card technology. The story alleged that counterfeits have been made, but that is misleading. We understand that someone has printed a card that looks like the surface of the Maple Leaf card, but that doesn't mean they have been able to compromise the security of the technology and the application. Each of us needs to question such reports. Advanced card technology has been proven to provide significantly higher levels of security than paper, plastic or mag stripe cards. We need to challenge those who imply otherwise, while at the same time ensuring that the technology and application(s) have been used to take advantage of the security they can provide.

If governments are to protect citizens and corporations protect customers, they must always move toward more security. For anyone to suggest that we wait for a perfect technology that will never be broken, is very short sighted at best and dangerously foolhardy at worst. The protections we enjoy today, ranging from door locks to the security features that allow us to enjoy the convenience of a world-class debit system, all have been introduced incrementally. Our objective in Canada must be to continue to raise the bar and minimize risks. The Maple Leaf Card replaces paper ID, significantly raising the bar.

In this past month we have also announced version 1.1 of the Privacy Impact Assessment Procedure for Multi-Application Smart Cards. The new version is based on the lessons we learned when WorkOne International first used the PIA in the field. We are currently in discussions with a federal ministry to use the new version in their card system design and development.

Join us in October (16th/17th) as we look at advanced card case studies from around the world. Anything we want to do with cards in Canada is being done somewhere today. The technology is no longer an issue, but there are issues slowing us down. Over these two days we will look at more than 20 projects from around the world and learn how others have overcome issues to achieve benefits. For more information on "Breaking through Card Barriers", watch our web site www.actcda.com next week.

Until next month, I invite you to think about how you might take advantage of infrastructure that is emerging in Canada.
2. ITALIAN GOV'T PLACES $2.4 MILLION ORDER FOR DIGITAL NATIONAL ID CARDS
 Source: LaserCard (07/28)
Drexler Technology Corporation announced the receipt of a $2.4 million order for LaserCard optical memory cards for use by the Italian government as Italy's national ID card. Called the Carta d'Identita Elettronica ("CIE"), this digital ID card program represents the first use of a LaserCard national identification card within the European Union. Deliveries are expected to be completed during the Company's current fiscal year, which ends March 31, 2004.

These secure cards have been developed in close cooperation with various agencies of the Italian government to meet the stringent requirements as set forth in the government decree announced three years ago for the CIE card. The card is based on a secure optical memory card manufactured by Drexler Technology, which is then further processed in Italy to add an IC chip.

In addition to a 1,000-kilobyte optical memory stripe, the digitally recordable CIE card also contains a Siemens-made integrated circuit (IC) "smart chip" which the Italian government indicates may be used for "city services." This would be a separate application from the secure identification provided via the optical memory stripe that contains the citizen's identification information. The citizen's demographics, color photograph, digitized signature, and other biometrics are to be contained in the CIE card's optical memory stripe.

Under this program, it is anticipated that the central and municipal public administrations in Italy will be able to select the types of services they will offer with the CIE card. The Italian government indicates that the national services offered may include healthcare, voting, and social security, while municipal local services may include transportation and education.

LaserCard is a member of ACT Canada. For more information, please visit their web site at http://www.lasercard.com.
3. AMERICAN EXPRESS EXPANDS AVAILABILITY OF NEW "CONTACTLESS" PAYMENT PRODUCT
Source: American Express (07/16)
American Express Company announced the pilot expansion - in the greater Phoenix area - of its latest payment product, ExpressPay from American Express. ExpressPay is a fee-free, key fob (key chain attachment) powered by radio frequency technology that offers a quick, convenient and contactless way to make everyday purchases. ExpressPay, which the company began piloting last summer with its employees in Phoenix, is now available at more than 175 merchant locations in the greater Phoenix area, including all Carl's Jr. locations, and participating Dairy Queen, Kwik Kopy Printing, Quiznos Subs and Schlotzsky's Deli locations.

"ExpressPay is a powerful innovation that allows consumers and merchants to benefit from added speed and convenience," said David Bonalle, VP and general manager of Advanced Payments, American Express. "We have found in testing that consumers prefer using their ExpressPay key fob rather than fumbling for their wallets, while merchants enjoy the benefits of their customers' increased spending and reduced time at the checkout counter."

Consumers have the option of funding ExpressPay in two ways: either as a direct link for payment to an American Express® Card or as a pre-paid product linked to any major credit, charge or debit card. ExpressPay Direct Link, with a daily spending limit of $150, links to any consumer American Express charge or credit card for payment - with individual charges recorded directly on the monthly

Since the launch of the ExpressPay pilot, results show that participating merchants have seen customer spending increase by 20% - 30% compared to their cash spending, while customers have seen their checkout time reduced by 30% - 40%.

The Phoenix rollout of ExpressPay expands on the pilot the company began a year ago, when it introduced the contactless key fob to several hundred employees for use at its corporate cafeteria in Phoenix, and at a handful of area merchants. Last Fall, ExpressPay was market tested with non-American Express employees in New Jersey - at a corporate cafeteria serving multiple tenants and, separately, for making purchases at a local New Jersey fitness center. Earlier this year, the company introduced ExpressPay to the cafeteria serving a major financial institution and at American Express' headquarters cafeteria and convenience store - all in downtown New York.

American Express is a member of ACT Canada. For more information, please visit their web site at http://www.americanexpress.com/expresspay.
4. COINAMATIC CANADA APPOINTED CANADIAN DISTRIBUTOR OF CALE PAY & DISPLAY PARKING DEVICES
Source: Coinamatic (07/15)
CALE ACCESS AB, (CALE) supplier of advanced Pay & Display parking devices has appointed COINAMATIC CANADA INC., through its wholly-owned subsidiary PARKSMART INC., as its national Canadian distributor.

COINAMATIC's appointment was made in conjunction with CALE ACCESS's decision to purchase majority ownership of its current Canadian distributor, CALE EQUIPMENT in Quebec. CALE EQUIPMENT, renamed CALE SYSTEM INC., will operate as CALE's North American corporate office, supporting COINAMATIC's sales and service activities in the Canadian market.

CALE President, Torkel Hardeman, chose COINAMATIC/PARKSMART as its Canadian distribution partner because "Coinamatic has the scale, regional infrastructure, national sales force and service organization to deploy its Pay & Display parking solutions in converging, economically attractive markets in Canada."

Supported by COINAMATIC's national sales and service organization, PARKSMART will sell, support and install CALE Pay & Display products and services through its thirteen Customer Care Centres located in major cities across Canada. Richard Adamson, COINAMATIC President, stated: "This arrangement has all the attributes of a good marriage between two innovative organizations with strong core competencies in providing high quality service to their Clients."

Coinamatic Canada Inc (aka AmenityOne) is a member of ACT Canada and a 2003 ACT Canada partner. For more information, please visit their web site at http://www.smartcity-parksmart.com.
5. INSIDE ID CONFERENCE ANNOUNCES ADVISORY BOARD: A "DREAM TEAM" OF IDENTIFICATION EXPERTS
 Source: Inside ID (07/17)
Inside ID: The Identification Solutions Mega Show, announced the formation of the Expert Advisory Board that will help guide the development of its seminar program. The conference and trade show will be held December 8 to 10, 2003 at the new Washington, DC Convention Center.

"We are thrilled to have these acknowledged experts sharing their insight with us. This is a true ID dream team," said Conference Chair Ben Miller, who himself has more than 20 years of experience in the industry. "The evolution of the networked society presents a staggering challenge for organizations of all types to know who they are dealing with, whether it is across the counter or across cyberspace."

Members of the Expert Advisory Board are:
(please visit http://www.insideid.com/advisors.asp for more information about the credentials of the Advisory Board)

Michael Barrett - Expertise: Digital Identity and Information Security
Barry Kefauver - Expertise: Travel Documents and Credential Security
Jeffrey Kutler - Expertise: Electronic Commerce and Financial Services
Linda R. Lewis - Expertise: Identity Management Systems and Credentialing
Joel Lisker - Expertise: Identity Theft and Financial Crimes
Randy V. Sabett - Expertise: Legal and Information Security
David Temoshok - Expertise: Government Identity Policy
Ari Schwartz - Expertise: Privacy and Public/Private Policy
David Weitzel - Expertise: Digital Identity Management

The Inside ID conference will help define the emerging discipline of identity management, a critical need for all types of organizations today. The show will feature a 100-booth exhibition and three days of educational programming covering digital identity, identity theft, financial fraud and homeland security.

For more information about Inside ID, please visit their web site at http://www.insideid.com..
6. CPI CARD GROUP READY TO SUPPORT VISA CANADA MEMBER INSTITUTIONS AS THEY MIGRATE FROM MAGNETIC STRIPE TO SMART CARDS
Source: CPI Card Group (07/01)
CPI Card Group is pleased to support the recent Visa Canada announcement on the gradual replacement of magnetic stripe cards to smart chip cards. Fully certified by Visa to embed, pre-personalize and personalize chip cards, CPI Card Group has the experience and security in place to assist financial institution with this transition.

As a member of the VISA Breakthrough Program, CPI Card Group is able to offer financial institutions a very competitive price on the complete range of products supported by Visa, says Benoit Guez, VP of Smart Cards and International Accounts.

From the low end EMV VSDC card with Static authentication, to the Java Card with the highest level of security, including Dynamic authentication, and wide memory capacity, allowing multi-application on the same card, CPI has the product line in place and has worked hard to be prepared and supportive of this change.

CPI Card Group is a member of ACT Canada. For more information, please visit their web site at http://www.cpicardgroup.com.
7. PUBLIC ROLL OUT FOR E-TICKETING SYSTEM ON LONDON'S TRANSPORT
 Source: Giesecke & Devrient (07/07)
The roll out of the new electronic ticketing system for London´s public transport could see an end to the early morning ticket queues at London's Tube stations. The first customers have started using the Oyster smart card, which could remove the need for cash when buying tickets. Giesecke & Devrient (G&D) is delivering around two million of the contactless smart cards for the new ticketing system. The complete project is being implemented by the TranSys consortium, led by its two main partners Electronic Data Systems (EDS) and Cubic Transportation Systems (CTS).

When fully rolled out to customers Oyster will help provide faster passage through gates and onto buses for some of the six million users of London´s transport network. Smart card equipment has already been fitted on 6,000 buses and at more than 270 stations in the British capital. The new smart card will initially be available to adult annual and monthly Travelcard and annual Bus Pass customers over the internet and by telephone. Later in the summer all annual and monthly Travelcard and Bus Pass holders will also be able to get an Oyster card from station ticket offices and retail outlets. Within a year all 350,000 annual and monthly Travelcard and Bus Pass holders will be issued with an Oyster card.

The Oyster smart card has a memory microchip chip and aerial. To get access to the London transport system, customers only need to touch their card on to an electronic reader. The communication between the card-reader and the credit card-sized smart card takes less than a fifth of a second. Heiner Starp, Managing Director of G&D GB said: "As the major supplier of smart cards to the Oyster project we have contributed to something which is much more than just another smart card project or new customer relationship. It is an opportunity for frequent travellers to benefit from contactless smartcard technology which, in our experience, provides benefits for the general public and industry alike." Contactless smart cards provide greater security against fraud and forging, and they can be easily hotlisted in the event of loss or theft.

Giesecke & Devrient is a member of ACT Canada. For more information, please visit their web site at http://www.gdai.com.
8. GEMPLUS PARTNERS WITH UNIVERSAL KART FOR EMV CARD PERSONALISATION IN TURKEY
Source: Gemplus (07/04)
Gemplus and Universal Kart, part of the Teknoloji Holding Group in Turkey, announced a partnership for EMV card personalisation in Turkey. Universal Kart and Gemplus are jointly investing one million Euros in the project to offer banks a cost effective EMV card personalisation solution based on Gemplus' GemSense Pro software. An estimated six million EMV smart cards will be issued over the next four years.

Gemplus is a member of ACT Canada. For more information, please visit their web site at http://www.gemplus.com.
9. ICAO LOOKS TO THE EMV EXPERIENCE
Source: CardTechnology Magazine (07/14)
The International Civil Aviation Organization is inviting banking smart card experts to attend the next meeting of its New Technology Working Group, which is hashing out standards for new machine-readable passports and other travel documents that will incorporate biometric images stored on contactless chips. ICAO believes it can learn something from the experience of the banking industry, especially those experts involved in the worldwide rollout of chip-based debit and credit cards that comply with international EMV (Europay-MasterCard-Visa) specifications. Many banks in Europe and Asia are beginning to issue EMV cards. Although these cards do not use contactless chips, ICAO wants tips on how its member states can achieve global interoperability with the new travel documents and terminals they will be rolling out and how to keep data secure on the chips. "The banks must have a high level of security in their transactions, and there might be something to gain from the experience," says an ICAO spokesman. Experts on contactless chip technology and IT security are also invited to attend the three-day meeting, which will be jointly held with a subcommittee of the International Organization for Standardization dealing with ID cards and machine-readable travel documents. The meeting was scheduled for July 22-24 in London.
10. SCHLUMBERGER WINS CONTRACT TO PROVIDE EMV SMART CARDS TO NATIONAL AUSTRALIA GROUP EUROPE
Source: Schlumberger (07/28))
Schlumberger Smart Cards & Terminals announced that it has signed a four-year contract with National Australia Group Europe to supply over 2.5 million of its top-level security e-Galleon* cards a year.

National Australia Bank Limited ranks in the top 100 banks worldwide based on assets. The bank has a major presence in the UK and the Republic of Ireland through its ownership of Clydesdale Bank, Yorkshire Bank, Northern Bank and National Irish Bank.

The e-Galleon card from Schlumberger offers cardholders a range of features for enhanced security, comprehensive risk management and faster transaction times. "Security for our customers and eliminating fraudulent transactions is one of our highest priorities," said Brent Skeffington from National Australia Europe. "The e-Galleon smart card will be a key tool in enabling us to provide a secure service to our customers. We are looking forward to deploying these cards in our branches throughout the UK and Ireland over the next four years."

"The move to EMV cards that enable the use of a PIN rather than a signature at the point of sale is the next step in the battle against card fraud," said Howard Berg, regional director for the UK and Ireland at Schlumberger Smart Cards & Terminals. "As a worldwide smart card technology provider, Schlumberger is ideally positioned to partner with companies in the banking community, drawing on our business expertise across consulting and EMV project management to support our banking customers' global activities."
The project marks the first time Schlumberger cards will be used to support dual currency, using pound sterling for UK transactions and euros for the Republic of Ireland.

Schlumberger is a member of ACT Canada. For more information, please visit their web site at http://www.smartcards.net.
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, and are for information purposes only.
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