September 30, 2005
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.

IN THIS ISSUE:
1. Editorial Comment
2. Canadian Market Strategic Initiatives
3. Coinamatic Selects New Hypercom Credit/Debit Card Terminals For Innovative SmartCity Smart Card Reload System
4. Gemplus To Develop R-UIM Smart Cards For Telus Mobility
5. Axalto Opens Advanced Payment Card Personalization Center In Canada
6. Rogers Trials New Payment Technology By Mint & MasterCard
7. QI Systems Developing Smart-Card Id & Payment System For Osage Nation
8. Oberthur To Issue Smart Card Solution For Orlando Intl Airport
9. Lasercard Receives Order For $500,000+ Of Optical Memory Cards For Costa Rica Resident ID Program
10. G&D Supplies Thai Smart Card Group
11. Keycorp Lands Saudi Payment Card Deal
12. U.S. Government Changes How It Buys Smart Cards
13. eFunds Launches Prepaid Gift Card Solution For Small To Mid-Sized Financial Institutions
14. Single Euro Payments Area To Mandate Smart Cards
15. Chinese Metro Equipped With Contactless Fare System
16. Danish Transit To Roll Out National Smart Card
17. Additional Stories Available In Members Only Section

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

PRINCIPAL:
Giesecke & Devrient ~ member since 1990

GENERAL:
EDS ~ member since 2001
Ingenico ~ member since 1990
Keystone Manufacturing ~ member since 2003

ASSOCIATE:
Jean Davy Consulting ~ new member
PJE Consulting ~ new member


WHERE YOU WILL FIND US:
October:
2nd annual government briefings in Ottawa
Canadian Payments Association Stakeholder Advisory Council
Smart Card Alliance Annual Meeting
ICMA Expo
November:
Cartes

For more information on any of these, please contact us.
1. EDITORIAL COMMENT
Source: Catherine Johnston, President & CEO, ACT Canada (09/29)
The 2 Tipping Points

In any market there is more than one tipping point and we are approaching the second in the Canadian EMV market. The first was in June 2003, when Visa Canada announced the intention of their members to convert to chip. Since then a significant amount of work has been done and other associations have made similar announcements.

The second tipping point has been reached now that stakeholder groups outside of the financial sector are increasing their activities. Merchants are seeking information, considering their options and making plans. The media are engaging. The industry is providing early assistance and strengthening relationships. Law enforcement is studying how this change will favourably impact the market. Inevitably, consumer advocates and other stakeholders will soon come forward.

This move, on the part of the financial sector, not only increases security for their customers, but also provides a platform for new services and conveniences. Governments face the same situation; the need to increase Canadians' security and the desire to provide enhanced service delivery. As with the financial sector, it starts with a great deal of background work and planning before any announcements are made. We see work being done that could lead to announcements - the first tipping point for governments. The question is, what can we do to support and accelerate those moves?
2. CANADIAN MARKET STRATEGIC INITIATIVES
 Source: ACT Canada (09/29)
What do consumers really want? That turned out to be a key question at this week's Cardware Connection meeting. Members of ACT Canada have decided to find out.

Research to determine how Canadians would use smart cards was one of four initiatives picked by the new Strategic Leadership teams. The Financial team selected merchant acceptance for chip migration as their second initiative.

The Emerging Markets, Applications and Technologies (EMATs) team also selected two initiatives. They will be conducting research on new EMATS around the world to determine what applications would provide a value add for Canadian multi-application EMV cards. Their second initiative focuses on contactless technology. They will provide a tool for all issuers of contactless card applications to aid their design and development of privacy protective applications. As well, they will in this first phase, prepare information materials for the media and public, to set the record straight on the uses and benefits of this technology.

The members of ACT Canada are key stakeholders in the Canadian market, representing card issuers, acquirers, merchants, consultants, the industry and other stakeholder groups. They have formed these Strategic Leadership Teams to pursue opportunities in this market. By working with the resources of ACT Canada and other ACT members, they can protect and leverage the investments being made to roll out national projects, support their success and promote new opportunities.

Both teams have identified goals and deliverables for their six-month projects and work has begun. All ACT Canada members are eligible to participate. A third team focused on government initiatives will be formed this fall.What do consumers really want? That turned out to be a key question at this week's Cardware Connection meeting. Members of ACT Canada have decided to find out.

3. COINAMATIC SELECTS NEW HYPERCOM CREDIT/DEBIT CARD TERMINALS FOR INNOVATIVE SMARTCITY SMART CARD RELOAD SYSTEM
Source: ICMA Daily News (09/20)
Hypercom Corporation announced that Coinamatic, Canada 's largest multi-housing laundry route operator, has agreed to purchase Hypercom's new T7Plus credit/debit card terminals for use with their SmartCity(R) smart card platform.

SmartCity(R), developed by Coinamatic, is Canada's largest reloadable smart card system, providing a variety of micropayment services for multi-dwelling units and commercial facilities including apartments, condominiums, non-profit housing societies, colleges and universities. Coinamatic has issued over 450,000 reloadable smart cards. The Hypercom terminals will be integrated into Coinamatic's SmartCity(R) Card Reload Centre kiosks and installed in or near the buildings to which Coinamatic supplies smart card-activated laundry, parking and vending equipment as well as access control devices. The kiosks allow SmartCity(R) cardholders to add value to their smart card by swiping their bank debit or credit cards.

"Our SmartCity Reload Centres are self-serve kiosks located in unattended environments, so the debit/credit card terminal at the heart of each kiosk must be reliable and easy to use as well as secure and compliant with Canadian regulations," said Michel McDonald, Vice President, SmartCity(R) Solutions, Coinamatic Canada Inc. "Hypercom's T7Plus is enabling us to provide a state-of-the-art smart card reload mechanism that is an essential and key component of the SmartCity(R) card platform."

Coinamatic plans to begin installing the T7Plus-equipped kiosks at new customer sites beginning in late August. Coinamatic will eventually migrate existing locations to the T7Plus-equipped kiosks as the older devices are retired.

Coinamatic is a member of ACT Canada. For more information please visit their web site at http://www.coinamatic.com.
4. GEMPLUS TO DEVELOP R-UIM SMART CARDS FOR TELUS MOBILITY
Source: ICMA Daily News (09/15)
Gemplus International S.A. announced it has been selected by TELUS Mobility to develop R-UIM cards that will tie together the Canadian wireless carrier's CDMA and iDEN networks and enable world roaming on GSM networks.

"The ability to tie together CDMA, iDEN and GSM networks to enhance roaming options will give clients increased mobile freedom, enabling them to travel and do business more efficiently," said Robert Blumenthal, TELUS Mobility's Vice President of Products and Services. "Gemplus' proven track record of providing high-quality smart cards makes it an ideal partner in the development of R-UIM cards."

Gemplus is a member of ACT Canada. For more information please visit http://www.gemplus.com.
5. AXALTO OPENS ADVANCED PAYMENT CARD PERSONALIZATION CENTER IN CANADA
Source: ICMA Daily News (09/22)
Aiming to help Canadian banks better protect their payment card customers and introduce new services, Axalto announced the opening of its new advanced payment card personalization center outside of Toronto, Ontario. The ultra-secure facility, which enables bankers to add smart card technology to credit and debit cards, will start deliveries immediately to one of Canada 's largest financial institutions.

"On behalf of Visa Canada, I'd like to welcome Axalto to the Canadian financial card issuer market and congratulate them on the opening of a smart card personalization center in Canada," said Derek Fry, president, Visa Canada Association. "As the leader in Canada 's chip migration, we recognize the importance of having organizations such as Axalto on board who share our vision to make the transition to smart card technology as smooth as possible. Through this, Canada can realize the substantial benefits smart card technology has to offer -- greater convenience to consumers, added protection to merchants and future services our members will use to differentiate their products in the market."

At the new personalization center, Axalto will utilize its extensive global personalization and fulfillment experience to assist each bank in preparing and personalizing EMV banking cards. This mass customization includes loading appropriate cardholder data, and then packaging and sending the cards to banks or directly to cardholders.

Visa Canada Association is a member of ACT Canada. For more information please visit http://www.axalto.com & http://www.visa.ca.
6. ROGERS TRIALS NEW PAYMENT TECHNOLOGY BY MINT AND MASTERCARD
 Source: Mint Inc (09/19)
Rogers Communications announced that the Company is conducting a market trial of the Mint PayPass MasterCard at its Toronto headquarters. Throughout the trial, Rogers employees can use the Mint MasterCard for two new innovative payment options: MasterCard PayPass is a feature which enables contactless payment processing and prepaid functionality which allows cardholders to preload value on their card. Over the course of the trial, employees at the Rogers Campus need only register for the Mint MasterCard, which can be used for contactless payments at MasterCard PayPass designated merchants at the Campus and traditional purchases wherever MasterCard is accepted worldwide.

Mint Inc and MasterCard are members of ACT Canada. For more information please visit http://www.mastercard.ca & http://www.mintinc.com.
7. QI SYSTEMS INC. DEVELOPING SMART-CARD ID AND PAYMENT SYSTEM FOR OSAGE NATION
Source: Business Wire (09/07)
QI Systems Inc. announced that it will provide the Osage Indian Nation with a smart-card identification and payment system for use by tribal employees.

The new, state-of-the-art system will initially be utilized at the Nation's headquarters in Pawhuska, Oklahoma. It is envisioned that following the test phase, the preliminary applications will be expanded to provide additional value to the Nation.

QI Systems is presently partnering with the Osage Tribe on several additional projects, including the pursuit of federal, state and local government contracts for smart-card applications. Representatives from QI Systems, the Osage Business Enterprise Corporation, and other project partners recently met to review and assess the status of the program.

QI Systems is a member of ACT Canada. For more information please visit http://www.qisystems.ca.
8. OBERTHUR TO ISSUE SMART CARD SOLUTION FOR ORLANDO INTL AIRPORT
 Source: ICMA Daily News (09/19)
Oberthur Card Systems has been selected to issue the smart card solution Total IDOne for use in Orlando International Airport's registered traveler pilot programme, it was reported on September 16, 2005.

Oberthur has been selected by U.S. airport security products company Verified Identity Pass Inc. and U.S. advanced technology systems company Lockheed Martin to issue the TotalIDOne smart card solution for use in airport's Clear registered traveler pilot programme. Lockheed Martin, the technology integrator on the project, has selected Oberthur to manufacture and issue all the IDOne Cosmo cards based on Philips Semiconductors' highly secure SmartMX smart card IC platform.

The smart card solution TotalIDOne can be applied to a variety of identification needs and offers a complete centralised ID management package.

Oberthur Card Systems is a member of ACT Canada. For more information please visit http://www.oberthurcs.com.
9. LASERCARD RECEIVES ORDER FOR MORE THAN $500,000 OF OPTICAL MEMORY CARDS FOR COSTA RICA RESIDENT ID PROGRAM
Source: LaserCard (09/15)
LaserCard Corporation announced the receipt of a purchase order valued at more than $500,000 for highly secure optical memory-based Permanent Resident Cards to be issued by Costa Rica to its legal non-citizen residents. The card, which features custom artwork and security features, follows the layout of the U.S. Green Card and Border Crossing Card (BCC) and is designed to be interoperable with the optical memory-based border inspections systems implemented by the U.S. and Canadian governments. LaserCard has sold more than 25 million Green Cards and BCCs since 1997.

After an intensive investigation by the Costa Rica authorities, the LaserCard was selected as the immigration ID card for the program. As the first Latin American country to implement an electronic ID card program, Costa Rica is on the forefront of continuing technological advancements in secure identification.

LaserCard is a member of ACT Canada. For more information please visit http://www.lasercard.com.
10. G&D SUPPLIES THAI SMART CARD GROUP
Source: ICMA Daily News (09/22)
The Thai Smart Card Group (TSC) will begin issuing electronic purse cards through Seven Eleven's 3,000 outlets in Thailand from October. TSC is a joint venture set up by convenience store chain CP Seven Eleven, tele-communications operator True and a number of local financial institutions, including Krung Thai Bank, Bank of Ayudhya, Government Saving Bank, Siam City Bank and Krung Thai Card.

The cards, which combine contact and contactless payments interfaces, will be supplied by Munich-based smart card company Giesecke & Devrient (G&D). They will be issued either by TSC or by TSC's partners, such as Seven Eleven and the banks.

Chalermchai Chatchaiganan, chief commercial officer of TSC, expects more than 20 large chains to follow Seven Eleven's lead and convert to smart cards. He estimates the number of customers who will switch to the card at around 1 million in the first year, rising to more than 5 million after only five years.

Seven Eleven hopes that the move will bring greater security by reducing the number of attempts to raid the chain's shops.

Giesecke & Devrient is a member of ACT Canada. For more information please visit http://www.gi-de.com.
11. KEYCORP LANDS SAUDI PAYMENT CARD DEAL
Source: CardTechnology (09/09)
Saudi Arabia is moving its approximately 7 million debit cards to the international payment standard known as EMV, says Keycorp Limited, the Australian company that will provide the smart cards. The cards, which will be distributed by all 10 Saudi Arabian retail banks, will use the Multos operating system. The Saudi Arabian Monetary Agency will oversee the deal. A timeframe for the migration was not announced. The agency wants to convert the nation's debit card scheme to smart cards. SAMA statistics show there were more than 37,000 point-of-sale terminals in the nation as of June. That month, more than 5.7 million transactions were made with those terminals. There were 4,333 ATMs in Saudi Arabia as of June.

Keycorp is a member of ACT Canada. For more information please visit http://www.keycorp.netSaudi Arabia is moving its approximately 7 million debit cards to the international payment standard known as EMV, says Keycorp Limited, the Australian company that will provide the smart cards. The cards, which will be distributed by all 10 Saudi Arabian retail banks, will use the Multos operating system. The Saudi Arabian Monetary Agency will oversee the deal. A timeframe for the migration was not announced. The agency wants to convert the nation's debit card scheme to smart cards. SAMA statistics show there were more than 37,000 point-of-sale terminals in the nation as of June. That month, more than 5.7 million transactions were made with those terminals. There were 4,333 ATMs in Saudi Arabia as of June.

Keycorp is a member of ACT Canada. For more information please visit http://www.keycorp.net.
12. U.S. GOVERNMENT CHANGES HOW IT BUYS SMART CARDS
Source: CardTechnology (08/31)
The U.S. General Services Administration is changing how smart card systems will be purchased as all U.S. agencies prepare to issue a standard smart card ID. The current contract vehicle expires on May 17. That contract has resulted in most government smart cards and related equipment being procured through four approved prime contractors, EDS, Maximus, BearingPoint and Northrop Grumman. The new purchasing agreement will open up projects to other systems integrators and vendors.

U.S. government agencies have issued about 3.5 million smart cards to employees and contractors, mostly through the Department of Defense. As the new standard ID card comes into use over the next few years, it is expected that some 7 million employees of government agencies and companies that do business with the government will carry the smart cards that all agencies will be able to read.
13. EFUNDS LAUNCHES PREPAID GIFT CARD SOLUTION FOR SMALL TO MID-SIZED FINANCIAL INSTITUTIONS & CREDIT UNIONS
Source: MARKET WIRE (09/28)
eFunds Corporation announced the introduction of a turnkey, prepaid gift card solution for small and mid-sized financial institutions and credit unions. eFunds is calling the solution Card in a Box(TM). eFunds will offer its Card in a Box offering to small and mid-sized banks and credit unions immediately, providing a turnkey solution that can be implemented in approximately 30 days. The rapid implementation turnaround and low cost of market entry gives small and mid-sized institutions a packaged gift card offering designed to attract cardholders for the upcoming 2005 holiday season.

"Today, only 23 percent of all mid-sized institutions offer Prepaid Gift Cards and this percentage drops precipitously for smaller banks," said Tim Sloane, prepaid market analyst for Mercator Advisory Group. "Consumer demand will prove difficult to address until more small and mid-sized banks distribute Prepaid Gift Cards."

Key benefits of the Card in a Box solution include low, one-time start-up fees, minimal up-front investment, a flexible card re-sale price, and a commission-based sales program that compensates financial institutions for every card sold -- providing a robust revenue channel as institutions head into the high-volume gift-giving season. The gift cards will initially be available as Visa(R) branded cards, and will be honored wherever Visa debit card brands are accepted. eFunds will provide all card issuing, administration, risk management, customer support and payment processing. Card in a Box includes all prepaid program administration, including set-up, sponsorship, issuing, payment processing and reporting. It also features a standard IVRU and Web site for cardholder self-service -- eliminating the need for staffing and training from the financial institution.

eFunds is a member of ACT Canada. For more information please visit http://www.efunds.com.
14. SINGLE EURO PAYMENTS AREA TO MANDATE SMART CARD
 Source: CardTechnology (09/23)
While many banks in Europe ignored last January's deadline set by Visa International and MasterCard International to move their credit and debit cards to more secure smart cards, they may not be able to avoid mandates set by the European Central Bank and the European Commission. The Eurocrats are planning to rid countries that have adopted the single currency, the euro, of their hodgepodge of national payment card schemes by 2010. They say their planned "Single Euro Payments Area" will create one "domestic" payment market, and the officials back a plan to require banks to convert all their cards and payment terminals to the international EMV smart card standard by 2010. EMV will offer more security than the magnetic stripe debit and credit cards now used in most countries in the eurozone, says Alfred Schmauss, chairman of the cards working group of the European Payments Council, a bank industry group charged with implementing the single euro payments system. EMV also is designed to ensure interoperability among cards and terminals across Europe. "EMV is the key way; we gave a clear deadline of 2010 on that," he said today at a conference of the European Finance Management Marketing Association in Paris. He added that all payment cards, except e-purses, issued by banks after Jan. 1, 2008 should comply with EMV. While his group cannot assess any penalties to recalcitrant banks, he expects them to play along. "If they (mandates) are not achieved through self-regulation, then the regulators will step in," he tells Cardline Europe. Jean-Michel Godeffroy, director general of payment systems and market infrastructure at the European Central Bank tells Cardline Europe banks in the Netherlands, Italy and Spain have complained they will have a difficult time hitting the 2010 deadline for rolling out the single-payments infrastructure. But he agreed the threat of intervention by European officials is real if the voluntary compliance fails.
15. CHINESE METRO EQUIPPED WITH CONTACTLESS FARE SYSTEM
Source: CardTechnology (09/22)
Thales Transportation Systems has finished an 18 million euro contactless smart card-based fare collection system for the first line of the Nanjing Metro in China. The system, which opened on Sept. 3, is managing between 100,000 and 150,000 fares per day, Thales says. The line is almost 22 kilometers long and has 16 stations. Thales worked with China-based Panda Electronics Group to install automatic flap gates containing contactless readers, along with point-of-sale terminals, portable card-verification units and a maintenance center. The system is compatible with the Nanjing City Card, which is used for such other forms of public transport as buses and taxis, according to a Thales statement. The Metro's contactless system could be extended to offer payment of non-transport services in the future, Thales says. The city of Nanjing plans to have a metro network of 14 lines and 150 stations by 2050.
16. DANISH TRANSIT AUTHORITIES TO ROLL OUT NATIONAL SMART CARD
Source: CardTechnology (09/13)
A consortium led by France-based Thales Transportation Systems and IT services firm Accenture has won a 200 million euro contract to build and operate a nationwide e-ticketing system for Danish transit authorities.

The contactless "Travel Card" project will allow riders to pay their fares by tapping the same smart card on readers for all modes of public transport, including metro trains, buses, ferries and the national railway. Later, the card will be interoperable with a smart card-based fare collection system planned for the Skane region of southern Sweden, which includes Malmo. Both the Danish national transit card and the Skane card will comply with the Mifare protocol.

Thales forecasts it will roll out 1 million cards between 2007 and 2009 in Denmark in the main phase of the project. The prepaid smart card will incorporate the different fare structures of these operators.
17. 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

CHIP & PIN DEBIT CARDS HIT MID-STREAM IN THE UK

Chip and PIN cards now account for over 107 million of the estimated 140 million payment cards in the UK and the number is growing steadily as banks ramp up their chip card-issuing programs... Last month Norwich and Peterborough Building Society (N&P)

FRENCH E-PURSE TO CARRY OUT CONTACTLESS TEST

Billettique Monétique Services, the consortium of major banks and other companies that operates France's electronic purse, Moneo, is planning to test a contactless version of the e-cash card…

11 BULGARIAN BANKS PREPARE TO INTRODUCE SMART CARDS

The introduction of the smart card technology in 11 Bulgarian banks will be completed soon…
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