April 28, 2005
Welcome to the April 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. Visa Expands No-Signature Rule For Contactless Payments
3. Desjardins To Switch To Chip Technology
4. ACI Readies Canadian Customers For Interac Chip Card Migration
5. Oberthur Wins First EMV Project In China
6. Giesecke & Devrient Wins Third Digital Tachograph Contract
7. Survey Finds That Enterprises Could Save Millions By Deploying Smart Cards For Both Data & Physical Access
8. Singapore Pushes Biometric Uptake
9. Oberthur To Supply E-Passports To Belgium
10. China Plans To Issue E-Passports In 2006
11. UK's Hospitality Sector Slow To Adopt Chip & Pin
12. Retail Logic Wins 2005 Queen's Award For Enterprise
13. Setec To Supply The Biometric Passports To Norway
14. Taiwan's Card Fraud Reaches 4-Year Low
15. Additional Stories Available In Members Only Section

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

GENERAL:
Canadian Banknote ~ member since 2003
Canadian Payments Association ~ member since 1998
eFunds Corporation ~ new member
IBM ~ member since 2003
Keycorp Canada ~ member since 1998


ASSOCIATE:
J.M.H. & Associates ~ new member
Pat Ranney ~ new member
Philip Andreae &Associates ~ new member

ATTENTION ACT CANADA MEMBERS: WEBINARS ARE NOW AVAILABLE IN MEMBERS ONLY SECTION

Past event webinars are now available in the members only section of our website. This is an excellent opportunity to catch up on what you may have missed at last year's events or to bring new employees up-to-speed. Click on the link below to access these webinars:

http://www.actcda.com/members-only/index.html

If you are a member of ACT Canada but do not have your login details please contact me - andrea(AT)actcda.com.
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (04/28)
Next Steps

If you receive this newsletter, you're likely a stakeholder in the Canadian market and either involved with EMV or identity management. It's important to ask what you will need in the next 12 to 24 months to meet your goals and where you can go for help.

At a high level, you will need information, contacts and access to skilled resources. From there your needs will change based on whether you are a financial services issuer or acquirer, retailer, government issuer, supplier, regulator, media, consumer or other stakeholder. Your benefits and challenges will also change, so let us help you sort through the process so that you can meet those goals.

In the past months we have been asked for help ranging from Smart Card 101 seminars, to executive briefings on how and why the market is changing, to an analysis of how the market will look in the next five years. We've answered government questions on identity theft and global best practices to combat this problem.

For help with your identity management programs and practices, we invite you to join us at Cardware 05: Smart Moves, June 27th, OBA Conference Centre, Toronto. For information on EMV for retailers and financial services, we also invite you to join us at Cardware to learn more about options and new opportunities and participate in the stakeholder sessions so that you can advance your interests. Members will receive stakeholder information from ACT Canada starting next week.

There are many questions to be asked about stakeholder involvement. Are all stakeholders equal? When do they need to get involved? What do retailers and financial services need to know about government plans and conversely what do governments need to know about EMV? What is the role of consumer groups and the media as advanced card applications are designed, built and implemented? What can we learn from those who have gone before us? Are there benefits to working together?

There are several ways in which stakeholders could answer these and many more questions, but undoubtedly they will best be answered in a neutral forum. ACT Canada has long served in that capacity, supporting stakeholders' needs to share information, learn, and resolve issues. We are committed to continuing that work to serve our members. If you would like more information on how we can help you, please contact us. See you in June!
ACT Canada is pleased to present
Cardware 05: Smart Moves
June 27th, 2005
OBA Conference Centre, Toronto, Canada
ACT members receive discounts on registrations & exhibitions rates
Details are coming soon to the ACT Canada web site
2. VISA EXPANDS NO-SIGNATURE RULE FOR CONTACTLESS PAYMENTS
Source: ICMA Daily News (04/22)
Visa USA will not require merchants to collect a signature or issue a receipt for payments under $25 made with contactless smart cards or other contactless devices that consumers wave past readers, Patrick Gauthier, senior vice president for new product development, tells CardLine. Visa currently allows merchants in certain categories where purchase amounts are small, such as fast food restaurants, to dispense with the signature on purchases below $15. Gauthier says extending the limit to $25 and including all purchases made using the radio frequency devices will add to the convenience of contactless products that Visa says issuers will begin rolling out this year. No issuers have yet announced such plans, but smart card vendors say they expect there will be millions of contactless cards in the field this year with the Visa, MasterCard or American Express brands. Gauthier notes that nearly half of Visa transactions in the United States are under $25.

Visa Canada Association is a member of ACT Canada. For more information visit http://www.visa.ca.

3. DESJARDINS TO SWITCH TO CHIP TECHNOLOGY
Source: ICMA Daily News (03/29)
Canada - Desjardins Group will soon be adopting chip technology for its members' debit and credit cards. This news follows on the heels of a recent announcement by Interac Association that by the end of 2006, it will have the necessary infrastructure to process transactions using this new technology.

In paving the way for the introduction of chip cards, Desjardins will be modifying its systems so that members will be able to carry out transactions at ATMs or POS terminals found in many stores. Desjardins expects the first chip transactions to be made starting in 2008.
4. ACI READIES CANADIAN CUSTOMERS FOR INTERAC CHIP CARD MIGRATION
Source: ACI (04/12)
ACI Worldwide responded to the recent Interac Association decision to have a Canadian chip card infrastructure in place within two years by confirming that two Canadian customers have already licensed EMV-compliant software from ACI. Interac has announced an aggressive plan to offer shared services using chip cards with a target of early 2007 for the first chip transaction. ACI Canada has worked closely with Interac on developing EMV debit specifications and achieving full support of the specifications within ACI's core BASE24® solutions.

"Chip card solutions are a natural extension of our payments processing footprint," said Mark Vipond, president of ACI Worldwide. "Interac's migration to chip card technology represents a significant investment, and our products will enable Canadian financial institutions take advantage of this investment with proven, low-risk technology."

ACI provides application software and technical consultancy based on its extensive experience with EMV solutions around the world. The range of ACI's EMV-enabled software supports transactions initiated at multiple delivery channels, from ATMs and point-of-sale devices to wireless telephones and PCs connected to the Internet. ACI has added new features to its BASE24 and BASE24-es payment solutions to support the processing of EMV authentication and maximize our customers' existing payments infrastructure. These products, along with the ACI Card Management System and ACI Smart Chip Manager, support the issuance and management of both magnetic stripe and chip cards, easing the migration to full EMV support.

"ACI's experience with other EMV initiatives provides our Canadian customers the opportunity to leap ahead of the curve in supporting EMV transactions," said David Grindal, director of sales support and marketing at ACI Canada. "Our BASE24 products support the EMV specifications for both the Canadian debit and credit markets, and our value-added products help customers manage the issuance of chip cards. We offer proven solutions to help customers fully participate in the Interac initiative."

ACI Worldwide and Interac Association are members of ACT Canada. For more information visit http://www.aciworldwide.com & http://www.interac.org.

5. OBERTHUR CS WINS FIRST EMV PROJECT IN CHINA
Source: Oberthur CS (04/06)
Oberthur Card Systems has been selected by the leading Chinese bank Industrial And Commercial Bank Of China (ICBC) as its card technology partner for the forthcoming EMV migration program.

The one-year contract calls for Oberthur Card Systems to provide ICBC with EMV global platform products as well as technical and consulting services.

Recognized as China's leading innovator in card technology, ICBC will become the first bank to issue EMV cards. This project marks the beginning of the long awaited migration to EMV of Chinese Banks.

"This project is of vital strategic importance not only for ICBC, but for the future of EMV in China", commented Mr. Han Xu Sheng, Business Dept Manager, ICBC Cards center. "We are keen to exploit the known benefits of EMV such as fraud reduction and payment interoperability, along with other new services for our cardholders".

Oberthur Card Systems is a member of ACT Canada. For more information visit http://www.oberthurusa.com.
6. GIESECKE & DEVRIENT WINS THIRD DIGITAL TACHOGRAPH CONTRACT
Source: ICMA Daily News (04/07)
Giesecke & Devrient (G&D) has been commissioned by the Department of Transport of the Republic of Ireland to supply 100,000 smart cards and the corresponding technological infrastructure for digital tachographs over the next five years. As of August 2005, EU regulations require all newly registered trucks and buses to be equipped with a digital tachograph. For G&D, the deal represents the first public contract with Ireland and, following Germany and Belgium, the third tachograph project in succession. As general contractor, G&D is responsible for design consulting, production, personalisation, and delivery of the cards.

Over the course of this year, digital tachographs will be replacing analogue units in every country of the European Union. The changeover will affect around 6,000 buses and trucks newly registered in Ireland every year. Switching to the digital system will serve to improve monitoring of vehicle operators' driving times and rest times as well as their adherence to speed limits. The European Commission expects the new system to boost road safety and create a uniform competitive environment, especially among hauling companies, across the EU.

Giesecke & Devrient is a member of ACT Canada. For more information visit http://www.gdai.com.
7. SURVEY FINDS THAT ENTERPRISES COULD SAVE MILLIONS BY DEPLOYING SMART CARDS FOR BOTH DATA & PHYSICAL ACCESS
Source: ICMA Daily News (04/04)
By deploying an integrated smart card security solution for both data and physical access, an enterprise may annually save more than $2 million for every 2,000 employees covered by such a combined identity and access management system, according to a new survey conducted by Datamonitor and commissioned by Siemens Communications, Inc.

"Increasingly, enterprises are looking to deploy converged security solutions that use the same authentication mechanism for both logical and physical access," said Tim Gower, senior analyst of Datamonitor. In the fall of 2004, Datamonitor conducted a North American survey of 53 enterprises to explore current authentication practices and the potential benefits of converging logical and physical access solutions. The survey's findings were captured in a new Datamonitor report, "The ROI Case for Smart Cards in the Enterprise."

According to the survey report, substantial cost savings may result from factors such as reduced time spent on sign-on procedures, better management of PKI certificates, consolidation of employee access privileges onto a single, multi-functional smart card, reduced numbers of password-related queries made to IT departments and greater automation of card provisioning.
8. SINGAPORE PUSHES BIOMETRIC UPTAKE
 Source: ICMA Daily News (03/31)
Singapore is steamrolling ahead in the use of biometric technology to safeguard its borders, and local authorities hope other countries can come together to establish best practices in this space.

During his opening address at the Global Security Asia 2005 conference, Wong Kan Seng, Singapore's Minister for Home Affairs Wong, called for greater cooperation between governments worldwide in developing biometric standards. He also urged for nations to share implementation know-how in the use of biometrics to strengthen international counter-terrorism defences.

"We need to establish common security and biometric standards quickly," Wong stressed. "One strategic effort that countries can work together on is the development and deployment of biometric passports," he said, a project that is currently underway in Singapore.

Singapore plans to introduce biometric passports - incorporating data of travellers' facial features and fingerprints - by October this year in a bid to remain on the United State's Visa Waiver Program. The US has set a 26 October deadline for all 27 nations in this programme to issue passports with such biological data to their citizens so that they can continue entering the country without visas.

Besides passports, Singaporean authorities have also deployed another biometric system called "Sentinel" at its border checkpoints which links the republic to the neighbouring Malaysian state of Johor. Implemented last year, the iris-scanning system helps to expedite immigration clearance for thousands of Malaysian motorcyclists who commute daily to Singapore for work.
9. OBERTHUR TO SUPPLY E-PASSPORTS TO BELGIUM
Source: ICMA Daily News (03/29)
Oberthur Card Systems (Oberthur CS) and identity documents and banknotes printer Francois-Charles Oberthur Fiduciaire (FCOF) were awarded a contract for an undisclosed sum to supply 500,000 electronic passports a year to Belgium.

The e-passports will be the world's first to comply with the International Civil Aviation Organisation (ICAO) recommendations, Oberthur CS and FCOF specified.

The chip, developed by Oberthur CS, allows to store all the data that is now featured on the page two of the passports: marital status, owner's photo and signature and will also store biometric data of the passport holder, including digital fingerprints and iris recognition-enabling data.

Oberthur Card Systems is a member of ACT Canada. For more information visit http://www.oberthurusa.com.
10. CHINA PLANS TO ISSUE ELECTRONIC PASSPORTS IN 2006
Source: CardTechnology (04/21)
China is developing new passports that will carry contactless smart card chips, keeping up with other nations that are introducing electronic passports, a Ministry of Public Security official said. He said the government decided late last year to go ahead with the electronic passport projects and expects to be able to complete testing and begin issuing the new documents by 2006, said Yan Ming, the director of the First Research Institute at the Ministry of Public Security. That department is ao responsible for the new national ID card that the government is rolling out in the form of a contactless chip card, and Yan said lessons from that ID card project will be helpful in rolling out the electronic passports. Speaking of contactless cards, he said, "We believe the technology is all ready and grown up." China is currently issuing about 8 million passports per year, Yan says.

The demand for passports in China is growing as more Chinese travel abroad. Nearly 29 million Chinese traveled outside the country in 2004, nearly a three-fold increase from just over 10 million in 2000, according to the China National Tourism Administration.
11. UK'S HOSPITALITY SECTOR SLOW TO ADOPT CHIP & PIN
Source: ePaynews.com (04/22)
The UK's hospitality sector has lagged retailers in migrating to chip and PIN, due to the need to integrate terminals and to support split payments where cards and cash may be tendered for a single bill. While hospitality businesses are liable for any card fraud occurring on their systems, many are waiting to integrate new billing systems and EMV terminals in one upgrade. Low levels of card fraud at hotels, restaurants and bars also caused many to delay their rollout of EMV card terminals, as did the complexity of establishing payment guarantees and bar tabs on arrival.

Integrated payment terminals were a prerequisite for the hospitality industry, which took time to agree on its chip and PIN standards. In Manchester, the Lowry hotel group is now seeing reduced card fraud as a result of its EMV migration. Before chip and PIN cards were accepted at the hotel, fraudulent charges totaled Stg 1,000 to Stg 2,500 per month but since January 2005, the fraud rate has been zero. The hospitality sector is however being warned not to provide cash-back services on non-chip and PIN cards, as fraudsters could leave businesses footing the bill.

Hotel customers using bank-leased EMV terminals at check in are asked to use their PIN for a preauthorized amount, and to re-key the same PIN for the final bill upon checking out. The sector has also called for greater clarity from banks and terminal providers for procedures to follow when accepting chip and PIN-secured payments. Gratuities, online bookings, implementation, support and upgradeability are still major issues for the UK's hospitality businesses, which have accused the chip and PIN Program Office of paying sufficient attention to their specific requirements.
12. RETAIL LOGIC WINS 2005 QUEEN'S AWARD FOR ENTERPRISE
Source: Retail Logic (04/21)
Retail Logic, part of The Logic Group, has received the 2005 Queen's Award for Innovation. The award recognises Retail Logic's key role in the development of innovative payment processing software and its continuing battle against card fraud.

The Queen's Award for Enterprise is the UK's most high profile award for business. Retail Logic's fight against fraud is spearheaded by its innovative Chip & PIN technology, now being used by the majority of the UK's top retailers. This technology provides enormous security and convenience benefits for retailers, banks and, perhaps most significantly, consumers.

"We are honoured that our dedication to innovation has been recognised with such a prestigious award," says Tim Stratton, Retail Logic's Managing Director. "Retail Logic is dedicated to fighting card fraud in all its forms. We're determined not to rest on our laurels and we'll continue to develop new technology to protect retailers and shoppers."

"We're delighted that Retail Logic has been selected for this award," says Nick Mourant, Group Treasurer at Tesco." We've been working with the Retail Logic team since 1988 and today our business uses their technology to process millions of card transactions across our stores every week. The award is well-deserved, as Retail Logic is not only working with large retailers such as ourselves, but is also helping protect UK consumers wherever they choose to shop."

The Queen's Awards for Enterprise are presented every year to UK businesses who have demonstrated outstanding achievement in one of three categories; international trade, sustainable development and innovation. The awards are given on the recommendation of the Prime Minister, who is assisted by an Advisory Committee that includes representatives of Government, industry and commerce, and the trade unions. Retail Logic is entitled to the award until 2010.

Retail Logic is a member of ACT Canada. For more information visit http://www.retail-logic.com.
13. SETEC TO SUPPLY THE BIOMETRIC PASSPORTS TO NORWAY
Source: ICMA Daily News (04/13)
The Norwegian National Police Directorate has chosen the Finnish smart card company Setec to be the manufacturer of its new biometric passports that will be introduced in Norway in October 2005. The agreement is for three years including an option for two extra years.

The value of the agreement is over EUR 30 million. The deliveries will start at the beginning of October, and the estimated volume is approximately 600,000 passports per year. As a result of this agreement Setec will establish a new subsidiary in Norway.
14. TAIWAN'S CARD FRAUD REACHES A FOUR-YEAR LOW
Source: The Taipei Times (04/22)
In December 2004, Taiwan's counterfeit credit card rate dropped to a four-year low of 0.04 per cent, down from a high of 0.34 per cent at end-2000, according to figures from Visa Asia-Pacific. While Taiwan's 2000 fake card rate for 2000 was triple the Asia-Pacific average, the value of losses to cloned cards fell by 83 per cent between 2000 and 2004. EMV card issuance in the country stood at 3 million by end-2004, up from 2 million in mid-year. Transactions made with Visa-branded EMV chip cards will reach 5 million per month in 2005, up from 2 million at present.

About 80 per cent of Taiwan's credit cards now carry an EMV chip, which will help the country maintain its status of having the lowest card fraud rate in the Asia-Pacific, as in 2004. Average card fraud rates in the region ran at 0.07 per cent in 2004, according to Visa, as opposed to a global fraud rate of 0.09 per cent. Visa-branded cards are used in 62 per cent of all credit card transactions in the Asia-Pacific, where 238 million Visa cards are currently in issue and in 2004, USD 475 billion was spent at points-of-sale or withdrawn from ATMs across the region.

Taiwan's banks have so far issued over 2 million Visa-branded debit cards with debit and cash-back functions, and Visa anticipates this total to exceed 3 million by end-2005. Debit cards were used for over USD 200 million worth of payments in 2004, more than double the volume for 2003. In May, Taipei Fubon Bank will begin issuing debit cards and aims to reach 900,000 cards by end-2007. Chinatrust Commercial Bank and Taishin International Bank have also issued 1.6 million and 150,000 debit cards respectively, which underscores the popularity of the card product.

Visa Canada Association is a member of ACT Canada. For more information visit http://www.visa.ca.
15. ADDITIONAL STORIES AVAILABLE IN ACT CANADA MEMBERS ONLY SECTION
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


EMV CREDITED FOR FRAUD DROP ON VISA EU CARDS

Fraud on Visa-branded cards issued in Europe fell by almost 9 per cent in the year to September 2004, which Visa attributes to the rollout of EMV chip cards and POS terminals in the region..


NEW HAVEN INTRODUCES FIRST FULLY-FUNCTIONAL COMPREHENSIVE PARKING & LOCAL MERCHANT SMART CARD PAYMENT SYSTEM IN U.S.

Parcxmart Technologies and City of New Haven to offer convenient coin-free parking meter and garage parking, and multi-functional Smart Cards for retail purchases…


PREPAID POSA BRINGS MERCHANTS NEW REVENUES


Merchants that install bundled POS applications on multi-function payment terminals can potentially create new revenue streams for each value-added application that the terminal operates…
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