September 30, 2004
Welcome to the September 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.

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

This newsletter has been sponsored by ACT Canada's 2004 Partner:

A Coinamatic Company

IN THIS ISSUE:
1. Editorial Comment
2. MasterCard to Introduce PayPass in Canada
3. Axalto Selected for TSA Registered Traveler Pilot Program
4. Governments Drive Modernisation & Transparency With E-Payments
5. NBS Technologies Acquires UbiQ
6. MBU Croatia Seeks Support from ACI to Aid EMV Migration
7. SCM Microsystems Introduces First Dual Card Digital TV Security Module
8. Retention Management Licenses Smart Chip Technologies' Product Suite
9. JCB's QUICpay Contactless Payment System Goes Mobile In Trial
10. Transit Chip Card Supplier Buys Parking System Company
11. LaserCard to Ship 265,000 Chip-Ready Optical Memory Cards For Middle East National ID Program
12. Additional Stories Available In Members Only Section

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

GENERAL:
A La Card ~ new SME member
ACI Worldwide ~ member since 1998
Airos Group ~ member since 2002
Keystone Manufacturing ~ member since 2003
Mint Inc. ~ member since 2003
Paymentech ~ new member
Roam Wireless ~ new member
Scotiabank ~ member since 1997

UPCOMING EVENTS:
ACT Canada Members receive discounts at the following event:

 Inside ID: The Identification Solutions Mega Show
November 15 - 17, 2004
Washington, DC, USA
http://www.insideid.com
1. EDITORIAL
Source: Catherine Johnston, President & CEO, ACT Canada (09/30)
Last week we celebrated our 15th annual conference. As you can imagine, we have seen a lot of changes in fifteen years, and I might describe the growth of the Canadian card market not as swift but as evolutionary, and in spite of the sceptics, I would add inevitable.

While we sought killer applications and national implementations, advanced cards have quietly worked their way into millions of Canadian wallets, providing convenience and security. Coinamatic has issued over 325,000 reloadable cards making laundry an easier task for apartment and university dwellers from coast to coast. St John's Newfoundland will soon issue an RFP for a multi-application smart card based transit fare card and parking. Memorial University and the downtown merchants' association have expressed interest in the card. Paul Gooderham, of the Gooderham Group, notes that this is a groundbreaking project in that it doesn't require a major investment. This scalable and affordable small system doesn't compromise security or functionality, so we can expect to see it replicated in towns and cities across Canada.

Delegates heard how government and retailers are working together to deliver electronic benefits in the United States. In Canada we need to understand how government issued ID and financial services products will co-exist at the point of sale.

Stakeholders are starting to come together to build better business cases, to leverage not just infrastructure but efforts, information and influence. There is a lot of work to be done and fences to be mended from years gone by. ACT Canada is working hard to facilitate these discussions because we have learned much from the UK EMV experiences and previous government projects. We know that stakeholders need to be working together now in order to identify the win/win business cases. The health of this market depends on it.

Please contact us if you wish to participate in the Retailer, Government or Security Stakeholder Forums. Thank you to everyone who contributed to a very successful Cardware 04 conference.
2. MASTERCARD TO INTRODUCE PAYPASS IN CANADA, PEOPLE'S TRUST & MINT TECHNOLOGY TO ISSUE AND SUPPORT CONTACTLESS CARDS
Source: Mint Inc (09/27)
MasterCard International announced People's Trust Company and Mint Technology Corp. will begin issuing and supporting MasterCard PayPass enabled cards in Canada for use over the next year as part of a program pilot. PayPass is a contactless payment option using radio frequency technology. To pay, consumers simply tap or wave their PayPass-enabled payment card on a specially equipped merchant terminal, eliminating the need to swipe a card through a reader. The new solution is ideal for quick payment environments where speed is essential, such as quick serve restaurants, gas stations, drug stores and movie theatres.

"MasterCard PayPass is a proven technology that is already expanding into real market use in the United States," said Nagesh Devata, VP, MasterCard Canada. "By taking these first steps with People's Trust and Mint Technology, we're now moving forward on making PayPass a viable solution for many Canadian businesses and contexts. The PayPass revolution has already started in the U.S. and is coming to Canada."

Mint will incorporate MasterCard PayPass RF capabilities into its product and service set. "The addition of PayPass-enabled MasterCard cards signifies new opportunities for our company, and will bring added benefits to consumers," said Frank Maduri, President, Mint Inc., "MasterCard PayPass opens additional market segments and a wide range of interesting possibilities. We see tremendous inroads for this payment method in any retail situation where speed is essential, and convenience is paramount. "

Both MasterCard and Mint Inc are member s of ACT Canada. Please visit http://www.mastercard.com & http://www.mintinc.com.
3. AXALTO SELECTED FOR THE US TSA REGISTERED TRAVELER PILOT PROGRAM IN HOUSTON, TEXAS
Source: Axalto (09/07)
Unisys has chosen Axalto to provide smart identification cards to the Registered Traveler pilot program at George Bush Intercontinental Airport in Houston. The Transportation Security Administration (TSA) recently awarded Unisys a contract to implement three of the program's five pilots. The pilots initially involve volunteer airline frequent flyers who, after undergoing a TSA-sponsored background check, will enjoy expedited security screening at their home airport.

Axalto is supplying the smart identification cards encoded with travelers' biometric identifiers and read at the airport security checkpoints. Axalto will also deliver the software needed to interface these cards to the screening systems. The credential management system will capture and encode the biometric data - fingerprints and iris patterns - that will be used to authenticate and verify the status of the Registered Travelers.

Frequent flyer programs in the United States do have approximately 20 million active members according to Frequent Flyer Services, a publisher of information on frequent flyer programs.

"TSA and the Department of Defense already employ Axalto's underlying technology, which has proven to be secure, fast and cost-effective," said Larry Zmuda, partner, Homeland Security Unisys U.S. Federal Government Group.

Over the next six months, the TSA will test the registered traveler program at five airports using about 10,000 volunteer travelers. By agreeing to background checks and identity verification through fingerprint and iris scans, frequent flyers are permitted to go through a separate Registered Traveler line for primary screening and to bypass secondary security screening if their information is accurately verified.

"In today's new reality where individuals are required to confirm their identity with increasing frequency, smart card identity solutions enhance privacy protection, guard against identity theft and increase speed and convenience for card holders," added Paul Beverly, president, Axalto Americas.

Both Axalto and Unisys are members of ACT Canada. For more information please visit http://www.axalto.com & http://www.unisys.com.
4. GOVERNMENTS DRIVE MODERNISATION & TRANSPARENCY WITH E-PAYMENTS
Source: Visa (09/27)
Efficient and effective payment systems are vital for economic modernisation and can be implemented in highly targeted and cost-effective ways, says a new paper launched by Visa International and the Commonwealth Business Council. According to the paper, the electronic payments revolution that transformed consumer spending in many countries and boosted the global economy can be expanded to provide significant benefits in developed and developing countries around the world and draw two billion unbanked citizens into mainstream financial services.

The paper, entitled "Payment Solutions for Modernising Economies," highlights key ways in which the move from cash to electronic payments can generate major returns to governments and their citizens, and it offers a primer on how to address infrastructure and institutional challenges. With a unique collection of real-world examples, the paper documents how governments can reduce costs, stimulate economic growth and strengthen local banking systems.

"Electronic payment systems have transformed our lives and boosted the global economy by giving nearly a billion consumers a fast, efficient and safe way to pay for goods and services. Now, as governments and enterprises extend the reach of electronic payments, we see rapid continued growth toward two billion electronic payment users, worldwide" said Christopher Rodrigues, president and CEO, Visa International.

Dr. Mohan Kaul, chief executive of the Commonwealth Business Council, noted, "This paper provides an important resource to help raise awareness and understanding in the area of electronic payments, particularly for emerging markets that are embracing leapfrog technologies to drive growth. It provides an effective overview of real challenges and practical advice."

The paper makes several important new contributions to public understanding of financial services and development. The paper advances an essential argument in the debate about driving economic modernisation and bridging digital divide issues: governments can deploy tailored electronic payment initiatives for specific stakeholders or geographies, allowing infrastructure, education and adoption issues to be resolved in targeted and cost-effective ways, with maximum return.

The CBC and Visa produced the paper based on growing public sector interest in new strategies to harness technology for economic modernisation. Although the World Bank and other institutions have produced various materials and studies on the importance of modern financial services and payments infrastructure, the CBC-Visa paper provides a new level of practical detail. The paper serves as a timely response to the needs of finance ministers, economy ministers and others participating in national and multilateral discussions about how to stimulate economic modernisation and growth. In particular, this paper serves as a timely intervention on the eve of the Commonwealth Finance Ministers' Meeting, which will specifically address these topics.

Visa Canada Association is a member of ACT Canada. For more information please visit http://www.visa.ca. Copies of the white paper and case studies may be downloaded at http://www.visa.com/modernisation.
5. NBS TECHNOLOGIES ACQUIRES UBIQ
Source: ICMA Daily News (08/31)
NBS Technologies Inc. has completed the acquisition of UbiQ, a privately held software development firm dedicated to the smart card industry.

Acquired for $3.06-million (U.S.) in cash and 1,330,435 common shares of NBS. UbiQ and NBS's existing smart card software group will merge within NBS's card personalization line of business. The issuance of common shares represents a dilution of 2.7 percent on a fully diluted basis.

"The increasing demand for smart cards, and the continued growth in the financial Europay-MasterCard-Visa (EMV) and government-secure ID markets, is driving the need for smart card personalization solutions," said David Nyland, president and chief executive officer, NBS Technologies. "The integration of the UbiQ software suite with our existing NBS smart card technology ensures we remain well positioned to take advantage of this increasing demand. In addition, this integration allows NBS to provide its customers and business partners with an enhanced end-to-end smart card personalization solution."

NBS Technologies is a member of ACT Canada. Please visit http://www.nbstech.com.
6. MBU CROATIA SEEKS SUPPORT FROM ACI WORLDWIDE TO AID EMV MIGRATION
 Source: ACI Worldwide (09/01)
ACI Worldwide announced that MBU Ltd, a leading financial services provider in Croatia, has licensed key components of the ACI Commerce Framework to support its growing card operations business and enable the company to meet forthcoming EMV mandates. These components include ACI's flagship BASE24 software, the ACI Card Management System and ACI Smart Chip Manager.

MBU was created by 27 Croatian banks in 1994 to develop a common bank card operations infrastructure. MBU designed, built and installed MBUNET, Croatia's leading ATM and POS terminal network. MBUNET will rely heavily on ACI's world-class BASE24 payments platform to provide transaction processing, authorisation and clearing for national and international bank cards including Visa, MasterCard and American Express. Deployment is underway and is expected to be completed by December 2004.

With EMV mandates fast approaching, MBU required support to ensure that its network of 540 ATMs and 2,700 POS terminals, as well as its card issuing system, complied with the January 2005 EMV deadline.

MBU licensed the ACI Card Management System to help members manage their cardholder base. Today MBU works with more than 17 banks and has issued more than one million cards. With new cards being issued at a rate of around 350,000 a year, MBU required sophisticated card issuance technology with the ability to maintain account information, track card usage and provide enhanced customer service.

ACI Worldwide is a member of ACT Canada. For more information please visit http://www.aciworldwide.com.
7. SCM MICROSYSTEMS INTRODUCES FIRST DUAL CARD DIGITAL TV SECURITY MODULE
Source: SCM Microsystems (09/10)
SCM Microsystems introduced a new digital TV security product called SIM-CAM that can support two different DTV smart cards - one of standard size and one of SIM size - in one Common Interface (CI) compliant module, a first for the industry.

"SIM-CAM gives consumers a very convenient way to access two pay TV offerings from a single security module", said Robert Schneider, CEO of SCM Microsystems. "Until now, consumers had to change the broadcaster-issued smart cards if they wanted to watch programming from a different provider; now they can just change channels."

The SIM-CAM security module accepts one full size standard ISO-7816 smart card and one small form factor smart card, known in the industry as a subscriber information module (SIM) card form factor. SIM-CAM ensures that the security applications are both protected with a secure loader as well as mechanical protection. The cards can use the same Conditional Access (CA) system or potentially use two different CA systems. It is fully compliant with the Digital Video Broadcasting (DVB) Common Interface (CI) standard. SCM expects to begin deliveries to the DVB markets in the fourth quarter.

Worldwide about 350 companies have endorsed the DVB standard for digital TV security. Under the standard, manufacturers design set top boxes and digital televisions with a CI slot that accepts a security module. More than 10 million boxes and iDTVs have been shipped to date with a CI slot. The security module works with a smart card issued by the broadcaster and acts as a "lock" to safeguard broadcast content. Consumers who already have a CI-ready digital television or set top box can easily subscribe to premium pay-TV services without adding an additional set top box. Established in 1997, the DVB standard was approved by the European Committee for Electrotechnical Standardization (CENELEC).

SCM Microsystems is a member of ACT Canada. Please visit http://www.scmmicro.com.
8. RETENTION MANAGEMENT INC. LICENSES SMART CHIP TECHNOLOGIES' PRODUCT SUITE
Source: Smart Chip Technologies (09/13)
Smart Chip Technologies is pleased to announce that Toronto-based Retention Management Inc. (RMG), has contracted to rebrand and sublicense SCTN's Loyalty, Pre-Paid Stored Value, and Gift Card solution to their clients throughout North America. Under the agreement, RMG will begin to host the Loyalty Central™ back-end clearing operation for their clients later this year.

"Smart Chip Technologies' shrink-wrapped software suite is an ideal solution for our clients, with its flexible consumer rewards, easy integration with any existing client database, and the ability to run on multiple card and merchant point-of-sale platforms," stated RMG CEO Spiro Psiharis. "We are confident that we can support any conceivable loyalty, stored value, or gift card program, without the extensive system modifications usually required."

Smart Chip Technologies is a member of ACT Canada. Please visit http://www.sctn.com & http://www.retentionmanagementinc.com.
9. JCB'S QUICPAY CONTACTLESS PAYMENT SYSTEM GOES MOBILE IN TRIAL STARTING NOVEMBER
Source: JCB (09/14)
JCB will start a QUICPay™ contactless payment system trial project in November. The QUICPay system offers users simple and speedy offline payments in less than one second, and can be used in a variety of contactless chip media. The current trial will implement the system in mobile phones compatible with NTT DoCoMo's mobile wallet service.

Twenty employees of the Kanachu Hire taxi company, based in Atsugi, in the suburbs of Tokyo, will receive NTT DoCoMo mobile wallet service handsets to download the QUICPay application, while about 30 of the company's cabs will be equipped with contactless readers. The POS readers and data processing system at Kanachu Hire will be provided by SAXA, Inc.

"Everybody knows that people are busy in the Tokyo metro area. That's where the convenience and speed of QUICPay can make a big difference. QUICPay is signature-free and stress-free - just tap and go," said Mr. Go Masaki, AVP of JCB's Strategic Market Development Department. "Not only is payment more convenient for the customer, but the time saved frees the cab driver to serve the next fare even faster than before."

QUICPay ("Quick and Useful IC Payment") is significantly faster and more convenient than cash. Part of the customer's existing credit limit is assigned to a contactless IC chip, which may be embedded in a plastic card, or incorporated in the customer's i-modeR FeliCaR mobile wallet service phone as in the current trial. The QUICPay amount is billed to the customer's existing credit card just like any other card purchase.

Payment of taxi fares with a credit card used to mean a cumbersome process in which the driver used a manual imprinter to capture data on a sales voucher. But in recent years, more automated on-line processing of card payments at some taxi companies has already resulted in a significant increase in payment by card. "Credit cards eliminate the problem in paying the fare in cash when the driver has to handle big bills and make change. And now with QUICPay, payment is going to be easier and smoother than ever before," commented Masaki.

The trial will run for two months. JCB will use the feedback provided by riders and drivers at the end of the trial in preparation for the full-scale release of the QUICPay system in the spring of 2005. The significant reduction of payment transaction times makes QUICPay suitable for a number of markets where quick throughput is critical, such as supermarkets and convenience stores.
10. TRANSIT CHIP CARD SUPPLIER BUYS PARKING SYSTEM COMPANY
Source: CardTechnology (09/01)
Cubic Transportation Systems Inc. announced that it had purchased Traf-Park Inc. of Quebec, Canada, a supplier of automated parking systems. Cubic says the acquisition is the first step in a strategy of expanding use of its smart card technology into such areas as parking, event ticketing and access control. Traf-Park's customers include transit operators, universities, hospitals, parking operators, museums, airports, hotels and exhibition centers. Jim Schleifer, vice president of products and services for Cubic Transportation Systems, will be president of the new wholly owned subsidiary. Pierre Blouin, Traf-Park's founder, will stay on as vice president of business development. Cubic Transportation Systems is a subsidiary of Cubic Corp.
11. LASERCARD TO SHIP 265,000 CHIP-READY OPTICAL MEMORY CARDS FOR NATIONAL ID CARD PROGRAM IN MIDDLE EAST
Source: LaserCard (09/01)
LaserCard Systems announced that it has received a purchase order release to ship 265,000 secure chip-ready optical memory cards for use in a Middle East national ID card program.

This quantity represents the balance required to fulfill the contract for Phase I of a program that called for a total of 300,000 cards. The prime contractor for the program issued the purchase order release following instructions from the customer, a Middle Eastern national government. The cards, which include highly secure customized optical memory and several other strong counterfeit resistance features, will be embedded with IC chips by a third party under contract by the prime contractor before delivery to the government customer. Deliveries under the purchase order release are scheduled to begin in the current quarter and to be completed by the end of January 2005.

Phase II of the same program, for which a Request for Proposal (RFP) was issued earlier this year, calls for an additional three million hybrid optical/smart cards and 220 optical card encoders to be used in card personalization and issuance. Responses to the RFP are currently under evaluation and the final selection of the prime contractor for Phase II is expected later this year.

LaserCard is a member of ACT Canada. Please visit http://www.lasercard.com.
12. ADDITIONAL STORIES AVAILABLE IN ACT CANADA MEMBERS ONLY SECTION
These additional stories will now be available to ACT Canada members via the Members Only section of our web site. Click on the link below to access this section. If you are a member of ACT Canada but do not have your login details please contact me - andrea(AT)actcda.com.
http://www.actcda.com/members-only/news.htm

INDIA DETERMINED TO LAUNCH NATIONAL ID CARD
Source: CardTechnology, Dan Balaban (09/03)

In what would become the second largest smart card project in the world, Indian government officials say they are intent on issuing chip-based ID cards to at least 600 million citizens…

UK CRIMINALS STEP UP MAIL FRAUD AS SMART CARD DEADLINE NEARS
Source: CardTechnology, by Robin Arnfield (09/22)

Fraudsters are turning to mail theft as they realize time is running out before the advent of chip-and-PIN cards in the United Kingdom makes card fraud much more difficult…

UNISYS AWARDED NEW $31 MILLION CONTRACT TO SUPPORT DEPARTMENT OF DEFENSE HEALTHCARE INITIATIVE
Source: Unisys (09/09)

Unisys Corporation was awarded a contract provide worldwide implementation and training services to support the department's electronic medical record system...

AXALTO'S SMART CARD SOLUTION ENABLES THE NETHERLANDS & LUXEMBOURG TO COMBAT EUROPEAN ROAD SAFETY VIOLATIONS
Source: Axalto (09/20)

Axalto has been selected by the Dutch Ministry of Transport, Public Works and Water management, and Luxembourg Ministry of Transport to integrate its smart card technology into digital tachograph cards that will be available shortly to road transport professionals…
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.
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