December 1, 2003
Welcome to the November/December edition of ACTion News. This complimentary service is provided by ACT Canada; "building an informed marketplace". It is also available in the Resource Centre of our web site. Please feel free to forward this to your colleagues.

This newsletter has been sponsored by ACT Canada's 2003 Partner:

A Coinamatic Company

IN THIS ISSUE:
1. Editorial Comment
2. ISCAN Broadens Role & Elects New Vice Chair
3. TSA Awards Airport Access Control Pilot Program (AACPP) to Unisys
4. 3-D Secure Technology Continues to Gain Momentum as JCB Adopts Global Industry Standard for Internet Authentication
5. Scotiabank & Paymentech Score Another Payment Technology First
6. Korea: Smart Cards to Replace Credit Cards Beginning Next Year
7. HP & ACI Will Enable Rahaxi to Meet Requirements of EMV Compliance
8. MasterCard Records Sharp Increase in Smart Card Programs Worldwide
9. International Expansion Takes Retail Logic Down Under
10. Visa Enables Swift, Secure, and Simple Migration to EMV Chip with Visa Smart Program
11. Linxx LLC. Combines Knowledge and Resources to Accommodate Evolving Plastic Card Industry
12. Cyberpro Reorganizes
13. Human Resources

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

GENERAL:
DST Output ~ member since 2001
ICC Solutions ~ new member
LaserCard General ~ member since 1999

ASSOCIATE:
Osler, Hoskin, Harcourt LLP ~ member since 2002

UPCOMING EVENTS
Visit ACT Canada at the Inside ID Mega Show, December 8 - 10, 2003, Washington Convention Center, Washington D.C.
For more information about the event please visit their web site at http://www.insideid.com
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (12/01)
Do you remember the killer app? It was going to launch millions of smart cards and from there infrastructure and other applications would flow into the North American market. A lot of money and resources were invested in finding that killer app. Now we know that the driver is not one application, but a need for more security and a desire for more convenience across a broad spectrum of applications. We have seen proof of that in Canada this year as the financial, government and transit sectors all moved forward with smart and optical cards.

Internationally, over 1.8 billion smart cards were shipped, and for the first time the number of microprocessor cards accounts for almost 50% of the shipments and are forecasted to surpass memory cards next year. Eurosmart announced that a milestone was reached in November when the number of smart cards shipped equalled the global population.

At Cartes this year, there was a much higher level of enthusiasm on the exhibit floor than last year, as attendees and exhibitors alike talked about current business, not just future plans. The same was true here at the ACT Canada fall roundtable. Next week, more than a 1,000 people will meet at InsideID in Washington to look at the very real issues of identity management. They will explore the role that several technologies, including advanced cards, could and should play.

What does all this mean for the market and the industry? Apart from good news, there are still significant challenges to be faced in the areas of standards and interoperability. Global Platform has done groundbreaking work resulting in much of the current market activity. ICAO has established standards for travel documents. EMV has become a strong global standard in the financial sector. The next step as new applications emerge, is to find testing and certification methods that will provide for consumer confidence and safety, while meeting everyone's desire for low cost cards, readers and overall systems.

Another challenge (or perhaps more accurately - opportunity) is to share information globally on best practices and lessons. This too can have a positive effect on lowering costs. Both these were discussed at the most recent meeting of ISCAN, the international smart card associations network and plans put in place (see ISCAN article, this newsletter).

We are ending the year on a good note, arguably the best in 10 years. I thank you all for your support and encouragement. Starting next year, we will make several changes to this newsletter to provide you with more information. From all of us at ACT Canada, we wish you the very best of the holiday season and the year ahead.
2. ISCAN BROADENS ROLE AND ELECTS NEW VICE CHAIR
 Source: Catherine Johnston, President & CEO, ACT Canada (12/01)
ISCAN, the international smart card associations network was founded in 2002, to facilitate information sharing and is now moving into a new phase of research. At the third meeting, which took place at Cartes in November, Randy Vanderhoof, Executive Director of the Smart Card Alliance agreed to continue as Chair and Catherine Johnston, President & CEO of ACT Canada was elected Vice Chair.

Over the coming months ISCAN intends to broaden its membership and invites all card associations to contact us. There is no fee to belong to ISCAN, but members are expected to contribute information concerning their market and participate in research or other initiatives of the Network. For more information, please email catherine@actcda.com or rvanderhoof@smartcardalliance.org.

The network has initiated research on terminal accreditations. A survey will be distributed to association members in January, to help us understand and scope the current accreditation processes. The next ISCAN meeting will take place at CardTech/SecurTech, April 2004.
3. TSA AWARDS AIRPORT ACCESS CONTROL PILOT PROGRAM (AACPP) TO UNISYS
Source: Unisys (11/20)
Unisys Corporation announced that the Transportation Security Administration (TSA) awarded the company a 20-month, cost-plus, fixed-fee contract with a ceiling of approximately $17 million. The initial task order placed under the contract has an estimated value of $8 million. The contract is for the evaluation of technologies that could mitigate security vulnerabilities at airports. The Airport Access Control Pilot Program (AACPP) will allow Unisys to identify the operational benefits achievable through increased use of biometric, surveillance and other security measures.

As the systems integrator for this pilot program, Unisys will coordinate the testing of biometric technologies that likely will include fingerprinting, facial recognition and iris scanning. Also included in the program are surveillance cameras at entry points to secure areas, which could prevent people without credentials from entering a secure area on the heels of someone with credentials, according to TSA.

The AACPP task order was awarded by TSA's Office of the Chief Technology Officer. Unisys has worked with TSA for more than a year on the performance-based, information technology managed services (ITMS) contract to provide technology infrastructure for the nation's 429 commercial airports. ITMS is overseen by TSA's Office of the Chief Information Officer.

Unisys is a member of ACT Canada. For more information please visit their web site at http://www.unisys.com.
4. 3-D SECURE TECHNOLOGY CONTINUES TO GAIN MOMENTUM AS JCB ADOPTS GLOBAL INDUSTRY STANDARD FOR INTERNET AUTHENTICATION
Source: Visa (11/24)
3-D Secure, the technology that powers the Verified by Visa Internet authentication service, continues to be embraced by the payments industry as the global standard for payment authentication. JCB CO. LTD., an international payment brand, has announced its intention to adopt 3-D Secure for Internet payment authentication, joining Visa and other international payment brands as they endorse a technology standard for secure Internet payment.

"JCB's recent commitment to 3-D Secure reinforces the importance of the e-commerce marketplace and 3-D Secure as the Internet authentication standard of choice," said Philip Yen, EVP, e-Visa International.

The Verified by Visa program has been adopted by more than 8,000 Visa payment card issuers from around the world, millions of cardholders, and thousands of merchants worldwide. More than 100 vendors currently support Verified by Visa today and 40 have passed Visa's 3-D compliance test program and can offer 3-D compliant solutions to merchants and issuers around the world.

Visa has always supported the development of global, open standards and recognizes that a global authentication standard is critical to continuing the growth of e-commerce. The 3-D Secure technology is an open standard that can be used by any payment system without fees or royalties. Visa continues to work with other industry leaders to accelerate the global adoption of 3-D Secure and welcomes industry participation in further expanding the global deployment of the 3-D Secure specification for Internet security and authentication.

Visa Canada is a member of ACT Canada. For more information about either of the above listed companies please visit their web site: http://www.visa.com & http://www.jcbusa.com
5. SCOTIABANK & PAYMENTECH SCORE ANOTHER PAYMENT TECHNOLOGY FIRST
Source: Canadian Newswire (11/12)
Beginning this November, Scotiabank will launch the first VISA cards in Canada containing a "chip" that is both protected by a Personal Identification Number (PIN), and will provide customers new and convenient payment options.

Consumer participants in the pilot will receive a chip card, which they can use at chip-enabled, point-of-sale terminals as well as the common magnetic swipe that most merchants in the Barrie area accept. When conducting credit transactions with their new chip card at participating merchants, customers will be prompted to enter a PIN, instead of signing a transaction receipt.

"Paymentech is pleased to become the first Canadian payment processor to enable the use of 'smart' credit cards through our customers' point-of-sale terminals," said Drew Brown, President of Paymentech Canada.

Scotiabank is a member of ACT Canada. For more information please visit their web site at http://www.scotiabank.com.
6. KOREA: SMART CARDS TO REPLACE CREDIT CARDS BEGINNING NEXT YEAR
Source: ICMA Daily News (11/05)
In Korea, cash and credit cards will be replaced by smart cards embedded with IC chips beginning next year. To avoid concentration of replacement on a certain year, the financial and card service organizations will replace cards on a gradual basis.

The Financial Supervisory Service said that the IC Card Introduction Promotion Council comprising executive members of banks and credit card service firms decided to replace the current cash and credit cards with IC chip-based smart cards by step over the next five years.

Financial organizations will replace cash cards with smart cards by 2005, and credit cards by 2008 after conducting a pilot replacement service in Youido, Seoul in February next year. The council also decided to adopt SEED as the standard for encryption algorithm of cash cards.

To accommodate both the established cards and new smart cards, banks will install new automated teller machines by 2005 with those that can read cards based on financial IC standard as well as international smart card standard, EMV. Credit card member stores will change card readers by 2008 in coordination with credit card service firms.
7. HP AND ACI WILL ENABLE RAHAXI TO MEET REQUIREMENTS OF EMV COMPLIANCE
Source: BUSINESS WIRE (11/25)
HP and ACI Worldwide, have signed a contract valued at approximately $1 million (including installation costs), with Rahaxi Processing Oy for upgrading their IT platform, which includes HP NonStop servers and ACI's BASE24(R) software. As a leading Northern European online credit card processing enterprise and a subsidiary of FreeStar Technology Corporation, Rahaxi Processing Oy relies on HP NonStop servers to run its mission critical applications.

Rahaxi routes credit and debit card transactions from points of sale to relevant banks and card issuers for authorization and settlement. Rahaxi operates full, on-line connectivity to all Finnish banks and Luottokunta, the local bank-established credit card company. Currently, Rahaxi provides services to more than 1,100 businesses, and the network supports more than 5,000 point-of-sale devices, generating up to 1 million transactions per month.

The upgrade evolves Rahaxi's business critical systems to the latest HP NonStop servers and BASE24(R) e-payment processing software. HP NonStop servers run 95% of the world's security transactions, making the NonStop platform the backbone for the world's most demanding and critical environments and offering Rahaxi a secure, continuously available processing platform. A vastly scalable platform, HP NonStop provides customers with the ability to achieve an adaptive enterprise by enabling them to respond quickly and easily to their changing business needs, such as managing a growing number of transactions and the need for increased capacity.

The new system will enable Rahaxi to meet the latest Visa and MasterCard standards and to pave the way for EMV (Europay/MasterCard/Visa) compliance. Rahaxi will also be able to support the latest Visa 3D Secure payment technology.

ACI Worldwide is a member of ACT Canada. For more information about either of the above listed companies please visit their web site: http://www.aciworldwide.com & http://www.hp.com.
8. MASTERCARD RECORDS SHARP INCREASE IN SMART CARD PROGRAMS WORLDWIDE
Source: ICMA Daily News (11/19)
Registering a sharp rise in global demand for smart card services, MasterCard International announced that it is now working with its customers on more than 400 individual chip implementations around the world. This figure represents more than double the number of projects active in the fourth quarter of 2002.

Smart card adoption continues to gather force in most regions of the world. Smart card activity has been particularly strong in the Asia/Pacific region, where the number of EMV smart cards has continued to double each year - to 14.5 million cards today. The same basic trend holds true in Latin America/Caribbean, South Asia and Middle East Africa and especially Europe, which continues to lead the world with more than 200 chip migration programs now underway.

This widespread technology shift has helped to guide recent decisions by MasterCard's regional boards in Asia/Pacific, Europe, Latin America/Caribbean, and South Asia and Middle East Africa, who have all recently enacted intra-regional liability shift policies calling for the full-scale adoption of smart cards and chip terminals in the 2005 and 2006 time period. Migration incentives are already in place in most of these regions as well.

MasterCard is a member of ACT Canada. For more information please visit their web site at http://www.mastercard.com.
9. INTERNATIONAL EXPANSION TAKES RETAIL LOGIC DOWN UNDER
Source: Retail Logic (11/26)
Retail Logic has signed a reciprocal marketing agreement with Keycorp. The agreement signals a major step in Retail Logic's international expansion plans in Asia-Pacific, with Keycorp starting to roll out the complete range of Retail Logic products and services in Australia.

Alison Greensmith, Sales Director of Retail Logic, "The addition of Retail Logic's products to Keycorp's existing offerings will benefit large retailers who are looking for integrated retail systems, and assists our move into the rapidly growing Asia-Pacific region."

"Retail Logic has an impressive array of products that have gained market leadership in the UK," adds Bruce Thompson, Chief Executive Officer of Keycorp. "This alliance will significantly enhance our offering across the whole Asia-Pacific region at a time when retailers are acting to secure their payment infrastructure against rising levels of fraud."

Both Keycorp and Retail Logic are members of ACT Canada. For more information please visit their web site: http://www.keycorp.net & http://www.retail-logic.com.
10. VISA ENABLES SWIFT, SECURE, AND SIMPLE MIGRATION TO EMV CHIP WITH VISA SMART PROGRAM
Source: Visa (11/18))
Visa International announced the launch of Visa Smart, a comprehensive program that enables members and merchants to swiftly, securely, and simply migrate to EMV chip. Visa smart cards and acceptance devices are already gaining significant momentum worldwide with 28 countries now processing Visa EMV chip payments.

"In many markets, EMV smart cards and chip-enabled acceptance devices are moving from "if" to "when" technologies, with many countries already committed to EMV chip," said Ed Kountz, senior analyst, Emerging Technologies at TowerGroup. "Visa has spearheaded efforts to ease market-driven transitions to smart cards; from the development of the EMV and VIS specifications through to the formation of GlobalPlatform and now Visa Smart. Visa has outlined a logical, step-by-step migration strategy with Visa Smart to assist not only Visa members, but the industry as a whole."

"The phenomenal success of the card payment industry is based on value, innovation, choice and interoperability," said Stephen Schapp, EVP, Global Product Platforms, Visa International. "Visa has worked on behalf of its members to create the foundation for EMV chip for over 10 years. Designed to complement Visa's regional innovations, our work on global standards, systems, infrastructure and solutions is now integrated under the Visa Smart umbrella. This ensures that members are supported through every aspect of EMV chip migration and takes us a step closer to achieving our vision of "u-commerce", whereby payment transactions can take place anywhere, at anytime, and in any way."

Visa Smart is built on four key pillars that reflect Visa's commitment to provide unique value to its members. These include:
- Developing open standards and specifications that deliver freedom and choice to members.
- Facilitating building a chip infrastructure through partnerships with leading industry smart card, terminal, personalization and other chip support vendors.
- Utilizing Visa's internal technical expertise to develop platforms and solutions that enable Visa members to deliver a wealth of value-added products to their customers, such as the Visa Small Ticket and Offline solutions.
- Providing the services and support globally and locally to facilitate the market adoption of EMV chip via project management, documentation and educational seminars

In every region of the world, Visa members are implementing EMV chip programs, opening new markets and customer segments with more secure and flexible payment products. Notable milestones include:
- By the end of 2003, the number of Visa EMV chip cards issued is estimated to reach 100 million, a more than 50% increase over 2002.
- More than 40,000 smart card acceptance devices have been sold through the Visa Smart Breakthrough Acceptance Device Program.
- Nearly two million terminals are expected to be capable of accepting EMV chip cards by the end of 2003.

Visa Canada is a member of ACT Canada. For more information please visit their web site at http://www.visa.com.
11. LINXX LLC. COMBINES KNOWLEDGE AND RESOURCES TO ACCOMMODATE EVOLVING PLASTIC CARD INDUSTRY
Source: ICMA Daily News (11/03))
The plastic card market continues to evolve. New and more advanced applications have become available, and card manufacturers and issuers are continuing to seek lower cost and higher quality solutions. Recognizing the growing needs of this fast-paced industry, Linxx LLC has announced its debut this month. The company will offer a variety of services including sales and consulting solutions that link premier material and equipment suppliers to North American plastic card manufacturers and personalizers.

Linxx is an independent, solutions-oriented sales agency that sells materials and equipment required by plastic card manufacturers, card personalizers and issuers in the United States and Canada. According to Magnacca, the company is designed to be a time-saving, one-stop shop - acting as the liaison between suppliers, card manufacturers and issuers to help streamline operational efforts and develop new, value-added products and services.

In addition to consulting services, Linxx also offers MarketLinxx at LinxxLLC.com, an online clearinghouse designed for the purchase and sale of surplus card manufacturing materials, products and equipment. MarketLinxx offers companies the opportunity to post card manufacturing material and equipment for sale or to browse posted products for purchase. Once the appropriate form is completed, Linxx will link buyers and sellers of material and equipment for a commission fee, payable by the seller, only after the transaction has been completed.
12. CYBERPRO REORGANIZES
Source: Solutions Fides Inc (12/01)
On August 22, 2003 Cyberpro Technologies Inc. underwent a major reorganization. The technological credits, in particular the software, patents, customers, contracts of service to the customers, inventories, waiters and terminals were yielded to a new company Solutions Fides Inc, whose shareholders are GemVentures1 N.V., a subsidiary company of Gemplus, and GroupeVHN Inc.

The commercial objectives of Solutions Fides Inc are to provide development services related to consumer loyalty of customers based on smart cards, magnetic cards and other forms derived from electronic trade. The majority of the employees of Cyberpro Technologies have been integrated into the new company

Fides Solutions will continue to manage the existing programs of the customers of Cyberpro Technologies Inc such as the Stores Northern, the Association of the Toyota dealers of Quebec, Kodak Canada, Gordon Food Services, the Cora Restaurants, Restaurant-Pleasures, the Cage with the sports, Piscines Trévi, Capitole of Quebec, the Museum of Beautiful Arts of Montreal, the Antonopoulos group and the Association of the ski resorts of Quebec.

Solutions Fides, Cyberpro Marketing and PL2C have also signed an agreement of nonexclusive mutual co-operation for the maintenance of the current programs and the development of certain future programs.

Daniel Tardif will concentrate on the activities of Cyberpro Marketing Inc., a company-council specializing in marketing solutions.

Paul Lafortune, through his company PL2C Solutions Loyalty, will specialize in the development of consumer loyalty for the trade.

For more information, please contact Solutions Fides Inc., Tel. (514) 868-9944, Info@SolutionsFides.com
13. HUMAN RESOURCES
Source: ACT Canada (12/01)
ACT Canada receives resumes from skilled professionals interested in working with card technologies. We do not act as a professional referral service, but in the interests of bringing resources to this market, are happy to make resumes available to prospective employers, where possible. At this time we have a developer/ project manager looking for employment in the GTA and a sales/marketing representative seeking a position in France, as well as others seeking positions in Canada. For more information, contact Catherine Johnston at 905 426-6360 x23. Please do not email.
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