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January 30, 2005 |
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Welcome to the January 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.
IN THIS ISSUE:
1. Editorial Comment
2. Smart Card Vendors Form Payment Alliance
3. Oberthur To Supply Smart
Cards For U.S.
Passports.
4. EDS Awarded $200 Million
In New Etravel
Contracts
5. MasterCard PayPass Card
Selected For Taiwan
Transit Project
6. Study Says It Will Take
Seven Years For
Smart Cards To Make A Dent
In The U.S.
7. Citigroup Introduces
Card With Transit
Chip
8. Shanghai Loyalty Programme
Rides On City
Transport System
9. Multifunctional Smart
Cards To Be Debuted
In 10 Cities Early Next
Year
10. Japan To Issue Contactless
Driver's License
In 2006
11. Additional Stories
Available In Members
Only Section
ACT CANADA WOULD LIKE TO THANK OUR NEW &
RENEWING MEMBERS:
PRINCIPAL:
Oberthur Card Systems ~ new member
GENERAL:
Coinamatic~ member since 1995
CPI Card Group ~ member since 1999
EDS ~ member since 2001
Ingenico ~ member since 1990
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1. EDITORIAL COMMENT
Source: Catherine Johnston, President &
CEO, ACT Canada (01/29) |
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Contrary to popular belief, the emergence
of advanced cards into North America has
not been a frustratingly slow climb. It has
been an aggravating seesaw ride with highs
when Mondex and the Ontario Services cards
were moving forward and lows as each fell
off the seesaw.
Entering 2005, we're
back on the climbing
side, but with an
important difference.
Wedged
below the rising
seat are business
cases
and drivers that
will keep us from
plummeting
to the ground this
time. There is another
interesting element
with seesaws. Unlike
roller coasters,
there is not a gradual
curve
followed by a steep
climb, instead there
is a steady rise.
Welcome to 2005,
the real
start of a successful
market rise.
I started my career
as a newspaper writer,
so I still view news
as an explanation
of
who, where, when,
why and how, so let
me
use those guidelines
to present 2005 to
you
from my point of
view. This month
we'll look
at who is and isn't
engaged and what
they'll
need to move forward.
Next month we'll
address
the other questions.
Please bear in mind
that these are solely
observations and
projections
derived from information
from a broad network
and analysis based
on a 15-year history
within
this market.
Look for solid progress
this year in the
financial services
sector from all Canada's
major financial institutions.
Visa Canada
members will continue
to move toward EMV
conversion with some
setting an aggressive
timeline to counter
the fraud shift from
other converting
countries. Look for
a market
pilot, likely next
year. MasterCard
Canada
members will also
have to counter the
fraud
shift and their association
has said that
they will be ready
to move to chip whenever
their issuers are.
They will continue
to
explore contactless
to open new relationships
and markets.
This increases the
vulnerability of
credit
and other payment
cards that are prone
to
fraud. We're watching
regulators this year
as they continue
to monitor the situation.
As important stakeholders
in the payment
arena, retailers
should show more
interest
this year in how
to leverage chip
infrastructure
for their own benefit.
In government, transit
continues to be high
profile with the
GTA Fare Card project,
but
other cities across
Canada are also showing
interest and intent.
At the provincial
level,
the Ontario government
could leverage their
current understanding
of the benefits of
advanced cards and
transit, to look
at their
use in sustainable
healthcare. This
is an
area that Quebec
has long understood,
but
not yet implemented.
Federally, I believe
we will continue
to
press forward with
applications that
have
international implications,
such as the CATSA
secure ID and ID
for other transportation
workers. This year
governments at all
levels
should think about
the intersection
of government
ID and payments at
the point of sale,
so
that they have a
timely understanding
of
both the issues and
opportunities. As
infrastructure
continues to drop
in price and fraud
and
identity theft grow,
governments need
to
aggressively seek
information leading
to
solutions. Legislative
and policy reviews
are underway indicating
a growing awareness
within government
and this year we
expect
to see planning to
combat these problems
on behalf of citizens.
Unfortunately, we
aren't seeing much
movement
in an application
that promises the
great
potential for advanced
cards; data access
control. In spite
of viruses and network
attacks, organizations
aren't thinking about
the need to apply
the same safeguards
to
data that they use
for physical facilities.
The focus remains
on outside threats
in spite
of the percentage
of attacks that come
from
inside. Advanced
cards would not only
support
multi-factor authentication
and permission
based access but
also privacy protection,
a high appeal for
consumers.
To support these
and other initiatives
in
2005, ACT Canada
will provide a neutral
forum
for all stakeholders
to learn, share information
and pursue their
goals. Here, they
will also
clarify mandates,
resolve issues and
problems,
and suppliers can
use their expertise
to
provide solutions
and sustain business
growth.
Our new webinar series
will also support
access to information
ensuring that everyone
interested in advanced
cards and the Canadian
market can retrieve
content from anywhere
they have Internet
access. ACT Canada
web-ed:
the information you
need, when you need
it.
We also plan to re-introduce
our networking
events. I invite
you to join us for
an exciting
year.
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CardTech/SecurTech
April 12-14, 2005
Mandalay Bay Convention
Center, Las Vegas,
NV
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This year's CTST conference offers an exciting
new look at two "core competencies"
that have always been at the foundation of
the event: Security and Transactions. CTST
has always been about ID tokens that are
usually taken to mean smart cards, but actually
include so much more. Here, we've taken the
high-level technological expertise that forms
the conference and we've re-focused, packaged
and labeled it with you, the end-user of
these technologies, in mind. The result is
CardTech/SecurTech 2005.
Visit http://www.ctst.com for details
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2. SMART CARD VENDORS FORM PAYMENT ALLIANCE
Source: CardTechnology (01/24) |
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The smart card industry's four largest vendors
believe there is still hope to encourage
banks to issue multiapplication chip cards.
The card vendors
formed the Smart
Payment
Alliance, which they
say will ensure interoperability
of payment and other
applications that
run
on banking smart
cards complying with
the
international EMV
standard. These other
applications
could include loyalty
programs and Web
authentication.
"You've seen
the market; there
are not
a lot of multiapplication
programs currently
alive," says
Marc Birkner, director
of business development
for the banking unit
of Gemplus International.
"Everything
we do together with
Visa and MasterCard
can
help. We all believe
there is place for
additional
value on EMV."
Representatives of
the new alliance,
however,
offer few specifics
on how they will
sell
issuers on the more
expensive smart cards.
One smart card industry
source tells Cardline
that vendors could
make value-added
applications
from Visa and MasterCard
work better together
for dual issuers
in Europe.
"If you want
go loyalty, you've
got
one application for
Visa and one for
MasterCard;
and if you want to
do Web access, you've
got one for Visa
and one for MasterCard.
The vendors say they
will open the organization
to other types of
vendors.
"Currently,
we are only the card
vendors,"
says Marie-Jane Denis,
director of finance
marketing and solutions
at Oberthur Card
Systems. "We
hope this will change
in
the coming weeks,
and we will have
some terminal
manufacturers, people
working on the software.
It's really with
all the different
companies
involved in the value
chain in the application
to try to define
the full system."
She says as a secondary
goal, the alliance
could help ensure
the EMV specifications
are implemented properly.
"We do not
anticipate problems,
but we are cautious."
The other members
of the alliance are
Axalto
and Giesecke &
Devrient.
Giesecke & Devrient and Oberthur Card
Systems are members of ACT Canada. Please
visit their websites at http://www.gdai.com & http://www.oberthurcs.com.
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3. OBERTHUR TO SUPPLY SMART CARDS FOR U.S.
PASSPORTS
Source: ICMA Daily News (01/18) |
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Oberthur Card Systems is to supply the U.S.
with smart-card technology for the development
and production of electronic passports.
Oberthur said it
would jointly conduct
tests
this year with the
U.S. Government Printing
Office (GPO) but
declined to provide
financial
details of the contract.
"The use of
electronic passports
will
help strengthen security
and boost controls
at borders while
meeting the demands
of the
basic rules of the
Enhanced Border Security
Acts," Oberthur
said.
Oberthur is a member of ACT Canada. Please
visit their website at http://www.oberthurcs.com.
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4. EDS AWARDED $200 MILLION IN NEW ETRAVEL
CONTRACTS
Source: EDS (01/24) |
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EDS announced five new contracts, plus an
extension of an existing order, together
valued at more than $200 million for electronic
travel services under the General Services
Administration's eTravel Service contract
vehicle.
The Departments of Homeland Security (DHS),
Commerce, Housing and Urban Development,
and Veterans Affairs, and the International
Trade Commission selected EDS' FedTraveler.com
offering for their eTravel needs; the Department
of Agriculture also expanded its current
contract with EDS.
The Department of Veterans Affairs contract
was the first eTravel award of 2005 for EDS,
who closed out 2004 as the top eTravel contractor.
Since inception of the GSA's eTravel program,
the company has been awarded task orders
from nine federal agencies valued at more
than $370 million, outpacing all other competitors
in the federal eTravel sector.
"FedTraveler.com is a complete enterprise
solution with unmatched built-in flexibility
and cost-effectiveness," said Jim Duffey,
VP Global Sales & Client Solutions -
U.S. Government, for EDS. "Our competitive
advantage is supported by our performance.
Since November, we have won 56 percent of
the task orders, which accounted for 73 percent
of the available total cash value."
EDS' ability to tailor FedTraveler.com to
meet individual agency travel processes and
the ability to work with a variety of small
business travel agencies have also been cited
as key differentiators.
FedTraveler.com leverages EDS' extensive
commercial and government travel services
experience to provide a unique set of management
tools to handle planning and authorizing,
reservation and fulfillment services, voucher
approval, and robust travel card fraud containment,
reporting and auditing capabilities.
EDS is a member of ACT Canada. Please visit
their website at http://www.eds.com.
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5. MASTERCARD PAYPASS CARD SELECTED FOR TAIWAN
TRANSIT PROJECT
Source: CardTechnology (01/20) |
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A MasterCard PayPass card with contact and
contactless interfaces is the new payment
vehicle for mass transit riders in seven
cities in southern Taiwan. MasterCard International
announced today it won the bid. The card,
dubbed OneSMART PayPass Chip Combi Card,
will be issued to an unspecified number of
people, who will be able to use it to pay
for transportation on busses, intercity coaches,
trains, ferries and in public car parks.
The Transportation Bureau of the Kaohsiung
city Government is coordinating the project
on behalf of the other six cities. The card
will have both contact and contactless chips.
The payment portion of the card will have
MasterCard credit, debit and Mondex stored
value functions. MasterCard, in conjunction
with Mondex Taiwan, will provide the payment
and e-purse product for issuers and acquirers.
The card will also feature PayPass, MasterCard's
tap-and-go payment system. Cathay United
Bank, E.Sun Bank and Bank of Kaohsiung will
issue the cards and provide the marketing
for them. Details about the bid, such as
its value, when it will be completed and
how many cards will be issued, were not released.
MasterCard says work on the chip-based project
has already begun.
MasterCard is a member
of ACT Canada. Please
visit their website
at http://www.mastercard.com.
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6. STUDY SAYS IT WILL TAKE SEVEN YEARS FOR
SMART CARDS TO MAKE A DENT IN THE U.S.
Source: Celent Communications (12/22/04) |
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Celent believes that smart cards will have
a significant presence by 2012 in the U.S.
and Europe, despite the lack of initiatives
in the U.S. over the past few years. The
analysts say smart cards, also called chip
cards, will overtake magnetic stripes and
revolutionize the payment industry. New growth
drivers include RFID and the gradual elimination
of legacy payment systems.
In a new report,
Smart Technology
and Smart
Strategies:
Critiquing
the Path of Chip Technology,
Celent examines
the evolution
of smart cards
and their likely
impact on the
US credit
card market.
Several factors
will determine
the fate of
smart cards,
including the
threat of fraud,
EMV, and the
overall migration
of smart cards
across the
world. These
drivers have been
assumed for
quite some
time; other factors,
such as the
elimination
of cash-based systems,
radio frequency
technology,
and the proliferation
of smart technology
in other industries,
are spurring
the renewed
interest in smart
cards in the
US.
"Those
close to the
payments industry
and with an
eye on the
progress of
smart
technology
know that smart
cards in the
U.S.
will one day
take over magnetic
stripes and
revolutionize
the payment
industry, as
they
already have
done in Europe,"
comments
Ariana-Michele
Moore, a banking
analyst at
Celent and
author of the
report. "It
is only a matter
of when and
how. We wanted
to give our
readers some
fresh perspectives
on the issue
and what we
believe to
be realistic,
and not so
realistic,
assumptions."
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7. CITIGROUP INTRODUCES CARD WITH TRANSIT
CHIP
Source: ICMA Daily News (12/03/04) |
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In the first major U.S. test of combining
transit fare payment with a credit card,
Citigroup Inc. began mailing customers in
the Washington, DC, area a platinum card
they can also use to pay transit and parking
fees. Embedded in the conventional magnetic-stripe
credit card is the same type of contactless
smart card chip that allows 750,000 Washington-area
commuters to use their SmarTrip tap-and-go
cards to pay subway and bus fares as well
as parking fees at 33 lots operated by the
Washington Metropolitan Area Transit Authority.
"Citi's research indicates strong customer
response to the concept of a combined credit
and transit card," a Citi spokesperson
tells CardLine. Citi plans to mail 8,000
of the new cards to existing customers this
week, says Greg Garback, executive officer
in the finance department of WMATA. Starting
early in 2005, he says, Citi plans to offer
the card to new customers.
In all, he says, the plan is to issue about
20,000 cards in the pilot. Garback says commuters
will be able to load the transit chip with
value at vending machines in subway stations,
charging the value to their Citi card. The
Citigroup spokesperson says Citi will replace
fare value remaining on the chip if the card
is lost. The spokesperson adds Citi hopes
to benefit "from gaining customers and
from 'top-of-wallet' card presence."
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8. SHANGHAI LOYALTY PROGRAMME RIDES ON CITY
TRANSPORT SYSTEM
Source: ICMA Daily News (01/26) |
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Setting up a customer rewards programme in
China can present a big challenge.
First, retailers must be convinced of the
need to install the necessary equipment,
and that includes the counter-top machines
that read smart cards. Then, consumers must
be persuaded to carry yet another piece of
plastic in wallets already thick with ATM
and credit cards.
A better ploy is to piggyback off someone
else's infrastructure, such as Shanghai's
metro system. And this is exactly what SmartClub,
a retail loyalty and database marketing programme,
has done.
The start-up has an exclusive 12-year contract
with the Shanghai Public Transportation Card
Co, which provides smart cards for the city's
public transport system.
With the same card used to pay for train
and bus fares, consumers can collect loyalty
points at places such as McDonald's or sporting
goods retailer Quest Sport, and redeem them
later for prizes.
"People don't want to carry one more
card in their wallet," chief executive
Henry Winter said. "Also, merchants
don't want another card reader on their counters.
It's really simple, but many people miss
this point."
Since launching two years ago, SmartClub
has signed up 100,000 members. The potential
market comprises the six million Shanghai
commuters who carry transport smart cards,
and the number is growing daily.
Loyalty rewards programmes are a relatively
new concept in China, a country where consumers
are just becoming comfortable with their
growing economic clout. SmartClub has succeeded
in getting skeptical retailers to sign up
by minimizing their risks.
To join SmartClub, consumers register their
smart card identification numbers online,
providing detailed information about themselves.
When consumers make a purchase with a smart
card, this buying behavior information is
combined with the demographic details, giving
SmartClub clients a powerful marketing database
to tap.
About 20 merchants have signed up so far,
including mobile-phone content provider Linktone
and online game operator NetDragon.
The next stops are Beijing and Guangzhou,
but SmartClub must first find another US$5
million in capital in addition to the US$4
million it has already invested.
SmartClub's reliance on transport smart cards
can also be a weakness. The company depends
on Shanghai Public Transportation Card Co,
which depends on its close ties with the
municipal government for the right to run
the city's transport smart card system.
"It would really hurt SmartClub if the
card company were to lose its relationship
with the Shanghai government," Mr Harrington
said. To hedge its bets, Mr Winter is exploring
the option of basing loyalty programmes on
bank cards as well.
"We have signed a contract with Guangdong
Development Bank," he said. "Customers
using its debit cards and credit cards can
register with us and earn SmartClub loyalty
points as they spend."
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9. MULTIFUNCTIONAL SMART CARDS TO BE DEBUTED
IN 10 CITIES EARLY NEXT YEAR
Source: ICMA Daily News (12/22/04) |
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Multifunctional smart cards will be used
in 10 cities and local governments including
Busan city in the first half of next year.
Industry sources said three leading information
technology firms in Korea and the United
States, including e-Smart Technologies, a
U.S.-based biometrics and smart card maker,
Mybi, a transportation and electronic cash
company, and a leading system integration
firm Samsung SDS agreed to join forces to
provide smart card service in 10 large cities
and local governments toward the end of the
first quarter of next year.
Under the accord, these companies will provide
multifunctional smart card service, using
'Mybi-eSmart card', that features functions
of paying fees for medical, security and
transportation service as well as for using
vending machines, off and online shopping.
'Mybi-eSmart card' is a smart card integrating
fingerprint recognition card of e-Smart Technologies
with electronic cash of Mybi. In addition
to its fingerprint recognition card, e-Smart
Technologies will invest a certain amount
of fund for the project.
e-Smart Technologies will launch the smart
card service to a dozen hospitals in Busan
in the first half of next year, while installing
medical information portal system in conjunction
with Samsung SDS. The company will also supply
more than 2 million smart cards and install
systems in Busan and 9 other cities in alliance
with Mybi.
e-Smart Technologies developed a smart card
installed with fingerprint recognition and
identification module based on ISO 7816 and
ISO 14443 specifications.
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10. JAPAN TO ISSUE CONTACTLESS DRIVER'S LICENSE
IN 2006
Source: CardTechnology (01/14)
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Japanese police departments are expected
to begin issuing contactless driver's licenses
in the spring of 2006, perhaps the first
country to use a contactless card for this
purpose on a national scale.
The license will replace a plain plastic
card carried by about 80 million Japanese,
which is also used as a de facto ID card
in Japan. The card is frequently counterfeited,
which is one of the main reasons the National
Police Agency has ordered all local prefectures
to begin rolling out cards within five years.
The licenses will also make it easier for
officers to fill out traffic citations and
make sure those citations are file properly.
The cards will carry a contactless chip and
antenna that comply with the "type B"
option of the main international standard
governing contactless chips, ISO 14443. This
would make the driver's licenses interoperable
with readers rolled out to accept Japan's
contactless national ID card, Junichi Sakaki,
who heads a technical committee advising
the government on the chip-based driver's
license, tells Card Technology. The national
ID or residency card is voluntary few citizens
have requested it. That won't be a problem
for the driver's license, which is mandatory
for licensed driver's to carry. Local prefectures
together issue about 20 million licenses
per year, says Sakaki.
The 8-kilobyte chip will carry the same information
as printed on the front of the card, along
with a digital photo of the cardholder and
a digital certificate. This certificate and
associated private key stored on the chip
will be used to verify the authenticity of
the data. Police officers will carry portable
readers to view the contents of the chip.
But since driver's licenses are also used
by banks, hotels, video stores and other
establishments to check ID, project organizers
expect these establishments to install readers,
too. There is even talk of Japanese car makers,
such as Toyota Motor Corp., eventually equipping
some models with readers that could automatically
adjust seats and mirrors to the cardholder's
preferences.
Because of privacy concerns, the government
has made it clear the cards will not store
the cardholder's driving record or any other
data except what is needed to establish his
or her permission to drive. This is also
one reason the card will not run multiple
applications.
"The National Police Agency has to guarantee
that the IC driver's license doesn't include
any hidden data," says Sakaki, who is
also a counselor with Matsushita Electric
Industrial Co. (Panasonic) and a member of
the International Organization for Standardization
committee responsible for setting standards
for driver's licenses.
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| 11. ADDITIONAL STORIES AVAILABLE IN ACT CANADA
MEMBERS ONLY SECTION |
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These additional stories are 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
ICAO COMMITTEE GETS SERIOUS WITH PASSPORT
VENDORS
A special committee of the International
Civil Aviation Organization formed last month
to fix stubborn interoperability problems
found during tests of biometric passports
is laying down the law to vendors…
NATIONAL STANDARDS FOR DRIVER'S LICENSES
- JERSEY'S NEW VERSION SHOULD PASS THE TEST
Source: ICMA Daily News (12/21/04)
…under legislation signed by President Bush,
state-issued licenses will have to meet uniform
national standards to be accepted as proof
of identity for boarding airplanes, applying
for federal benefits and other official U.S.
government purposes…
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| 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. |
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| 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. |
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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 |
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