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October 31, 2005 |
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Welcome to the October 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. Interac Association Moves Forward
3. Credit Union MasterCard
Leading the Way
to Chip
4. Dexit Opens in Ottawa
5. Multiple Benefits Found
to Drive EMV Adoption
6. U.S. Details Security
Plans for Chip-Based
Passports
7. Chip-Based Home Banking
Helps Dutch Bank
Cut Costs
8. Visa Approves Contactless
Technology
9. Boarding Per Smart Card
- Giesecke &
Devrient and Silverstroke
to Present Contactless
Solution for Civilian Aviation
10. Japan to Complete EMV
Migration in 2010
11. Additional Stories
Available In Members
Only Section
WHERE YOU WILL FIND US:
November:
Cartes, Booth #4H 055
November 14 - 17, 2005
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1. EDITORIAL COMMENT
Source: Catherine Johnston, President &
CEO, ACT Canada (10/29) |
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A Government Call to Action
Seventeen government
groups met with us
earlier
this month in Ottawa
and we discussed
some
of their plans and
shortly afterwards,
I
met with similar
US government representatives.
Over the course of
these discussions,
I came
to fully appreciate
the value of a forum
or coordinating body
to help promote knowledge
and understanding
of card technology
at the
federal, provincial
and municipal levels
and to provide advice
and guidance on emerging
issues and challenges.
In Canada, as governments
make plans for
identity management,
electronic benefit
distribution,
municipal services
delivery and a myriad
of other applications,
ACT Canada is prepared
to support and facilitate
their plans. We
offer to help provide
and clarify information,
build consensus and
deal with other items
that could inflate
project costs, delay
or
defeat initiatives.
We pledge to do this
in a neutral forum.
We are stepping up
to the plate with
the
launch of the Government
Strategic Leadership
team. This team is
open to all levels
of
government. They
will choose the initiatives
they wish to pursue
and will work with
ACT
Canada members in
a neutral environment.
Last month we launched
two Financial Services
teams and the Emerging
Market, Application
and Technologies
team and their work
is well
underway.
For more information
on this team, please
contact me at catherine(at)actcda.com.
We
are seeking team
members and co-chairs
for
the first 6-month
term.
In the United States
the Intergovernmental
Advisory Board (IAB)
works with the Smart
Card Alliance to
expand their community
of
interests and bring
industry expertise
to
the table in areas
related to smart
card
applications, technology
and standards. The
IAB is a "look
ahead" organization
that identifies and
addresses issues
that
will be important
to government officials
in the next 12 months.
ACT Canada offers
to work with existing
Canadian government
groups to achieve
the same benefits.
In the Canadian financial
market, the work
done by Interac,
MasterCard and Visa
on behalf
of their members
has been groundbreaking.
Their joint efforts
with American Express
will determine how
quickly and efficiently
conversions will
take place. Their
work shows
the strength and
benefits of entities
with
similar goals working
together.
We call upon all
governments and our
members
to work together
for the benefit of
all Canadians.
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2. INTERAC ASSOCIATION MOVES FORWARD
Source: ACT Canada (10/26) |
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Interac Association has made a number of
public announcements this year concerning
their commitment to move for the conversion
of Interac Shared Services - Shared Cash
Dispensing and Interac Direct Payment - to
chip technology. This week's announcement
demonstrates Interac Association's leadership
in ensuring a smooth and timely transition
to chip technology and providing long-term
security and innovative service offerings.
In February, they
announced approval
by the
association's Board
of Directors to migrate
to chip technology
for the delivery
of Interac
Shared Services:
Interac Direct Payment,
Canada's national
debit card service
and
Interac Shared Cash
Dispensing Service
for
cash withdrawals
at Automated Banking
Machines.
The Association plans
to have the necessary
infrastructure in
place for its Members
to
begin offering the
Shared Services using
chip cards by the
end of 2006. Plans
call
for the first chip
transaction to take
place
in 2007.
Since that announcement
there has been some
question as to when
conversion would
be completed
and that was answered
this week with the
following release
from the Association.
With
the stated plans
for 2006 and 2007,
and the
need for issuers
and acquirers to
undertake
a full national conversion,
the next step
was to commit to
dates after which
the Association
members' existing
magnetic stripe cards
would
no longer function
within Canada. Setting
these dates has confirmed
the commitment
to move to chip and
provides all stakeholders
with an understanding
of when major milestones
will be reached.
Here is this week's
announcement.
October 24, 2005,
Toronto, ON - Interac
Association
announced approval
by its Board of Directors
of final deadlines
for the conversion
of
Interac Shared Services
- Shared Cash Dispensing
and Interac Direct
Payment - to chip
technology.
This latest step
demonstrates Interac
Association's
leadership in ensuring
a smooth and timely
transition to chip
technology and providing
long-term security
and innovative service
offerings.
This decision builds
on the Association's
commitment, made
earlier this year,
to have
the necessary infrastructure
in place for
its Members to begin
offering the Interac
Shared Services using
chip cards in time
for the first chip
transaction to take
place
in 2007. With these
deadlines, magnetic
stripe
transactions will
not be permitted
in the
Shared Cash Dispensing
Service for debit
card cash withdrawals
from Automated Banking
Machines after December
31, 2012 and magnetic
stripe transactions
will not be permitted
in the Interac Direct
Payment Service at
point-of-sale devices
after December 31,
2015.
"These end-dates
solidify our commitment
to migrate the delivery
of Interac Shared
Services to chip
technology,"
said Judith
Wolfson, President
and CEO of Interac
Association.
"This is an
important step for
successful
migration, and we
continue to work
closely
with our Members
and business partners
to
ensure a timely and
effective transition."
These deadlines acknowledge
that full migration
to chip will take
several years, recognizing
the large number
of organizations
involved
and the number of
debit cards, automated
banking machines
and point-of-sale
terminals
that will need to
be converted. The
specific
timetable for the
introduction of chip
by
individual Association
members will vary
from member to member.
Chip cards will continue
to carry the magnetic
stripe, which currently
facilitates transactions.
This will not only
facilitate the transition
to chip, but also
allow cardholders
to use
their debit cards
in other markets
not planning
to introduce chip
in the near future,
such
as the United States.
Interac Association is a member of ACT Canada,
please visit their web site at http://www.interac.ca.
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3. CREDIT UNION MASTERCARD LEADING THE WAY
TO CHIP
Source: CUETS (10/05) |
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CUETS, the primary supplier of payment cards
and merchant services to Canadian credit
unions, announced an aggressive plan to implement
and support chip technology for its complete
line of card products. By being an early
entrant into the Canadian market with smart
card technology, CUETS will offer its credit
union partners the ability to provide their
members superior fraud protection, sophisticated,
flexible and convenient payment options,
and enhanced loyalty rewards programs, potentially
all on one card.
Since the first days
of exploring the
use
of smart cards in
Canada , CUETS has
been
actively involved
in the campaign to
adopt
chip card technology
in the country. It
participated
on the national task
force that created
Canada
's first chip standards
(Chip Card Migration
Program), and has
been involved in
a number
of chip trials. CUETS
is also a member
of
several national
committees engaged
in developing
smart card strategies
for the credit union
system.
CUETS, through its
ownership participation
in Unified Network
Payment Solutions
(UNPS),
is taking a lead
in preparing the
marketplace
for the shift in
payment technology
by developing
chip-ready merchant
terminals and hardware
for deployment.
"We look forward
to working with credit
unions and merchants
in developing smart
card solutions that
fit their unique
business
needs," says
Kuss. "CUETS
is also
committed to a seamless
transition to chip
technology for its
Credit Union MasterCard
cardholders."
CUETS and MasterCard are members of ACT Canada,
please visit their web site at http://www.cuets.ca & http://www.mastercard.ca.
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4. DEXIT OPENS IN OTTAWA
Source: Canada NewsWire via COMTEX(09/30) |
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Dexit Inc. announced it has initiated a controlled
launch of the Dexit Service in the nation's
capital with the installation of Dexit RFID
tag readers and terminals in four independent
merchant locations that serve consumers working
at Place Bell, one of downtown Ottawa's largest
office towers located at 160 Elgin Street.
Dexit has supplied
approximately 1,500
RFID
tags for distribution
to the more than
5,000
people who work in
the Place Bell office
tower.
"We are delighted
with the opportunity
to establish a foothold
in the Ottawa market,"
said Renah Persofsky,
Dexit's President
and
CEO. "Retail
campuses such as
this one
at Place Bell are
an ideal platform
for the
Dexit service because
they offer us an
efficient
way to acquire new
tag holders and to
provide
these consumers with
a meaningful number
of easily accessible
merchants who accept
Dexit payments."
Dexit is a member of ACT Canada, please visit
their web site at http://www.dexit.com.
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5. MULTIPLE BENEFITS FOUND TO DRIVE EMV ADOPTION
Source: Frost & Sullivan (10/26) |
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Banks, card issuers, and retailers consider
the adoption of EMV (Europay-MasterCard-Visa)
smart cards a lengthy and costly process,
and the high price of implementing smart
cards compared to magnetic stripes has dampened
the speed of migration, according to an industry
analysis by Frost & Sullivan.
But industry efforts coupled with support
from the major card associations and payment
organisations are poised to reduce the cost
of migration, the analysis report says. At
the same time, EMV's successful application
in areas such as telecommunication and transportation
have gone some way toward encouraging the
acceptance of smart cards in banking (both
financial and loyalty) operations.
According to the report, the growing realisation
of EMV's multiple benefits (its enhanced
security features, large memory size, and
type of interface) have added greatly to
the appeal of smart cards in the banking
sector. Smart card-based banking and payment
(EMV compliant) cards are also now seen as
crucial to combating the high fraud rates
associated with magnetic stripe cards.
Retention tool
Frost & Sullivan smart card analyst,
Anoop Ubhey, said: "The security features
offered through this technology increase
consumer's confidence to conduct transactions
both online and offline. In addition, the
card's large memory and processing capability
opens opportunities for banks or card issuers
and acquirers to generate additional revenue
and provide value-added services to their
clients. In other words, it will act as a
key differentiator for the financial institutions
and retailers to better acquire and retain
customers."
Versatile interface methods between cards
and readers are also adding to the popularity
of smart card technology. For banking applications,
cards offer both contact and contactless
interface, and sometimes a blend of both
- either in combination (a dual interface
on a single chip) or as a hybrid (using two
separate chips).
Steady roll-outs
In particular, the use of contactless technology
has been steadily expanding with the initial
roll-outs and deployments highlighting its
advantages. For example, contactless payment
credit cards (such as MasterCard PayPass
and Visa Wave) are seeing high uptakes due
to the speed and convenience they offer cardholders.
At the same time, the strong performance
of contactless technology in the transportation
arena is encouraging its use in other application
segments (particularly in access control).
One of the key reasons for shifting to smart
card-based payment cards will be the migration
deadlines and liability shift set by both
Visa and MasterCard. The process of EMV migration
for banking applications has been progressing
for the past couple of years in almost all
geographic regions. But while fraud was touted
as the major motivating factor for large-scale
migration in Europe, Middle East and Africa
(EMEA), Latin America and Asia Pacific (APAC),
banks in North America - which aren't troubled
by the same degree of fraudulent card use
- have instead adopted a case-by-case approach.
Adding loyalty?
But while multi-application or multipurpose
capability has been among the major selling
points for smart cards, this has yet to fully
materialise. Many currently available smart
card projects in both banking and non-banking
applications are still dedicated cards with
simple applications.
Stressing the importance of developing multi-application
functionality, Ubhey noted: "Banking
multi-application programmes across all regions
will further boost the loyalty market. The
first additional service that banks tend
to deploy on their bankcards and payment
cards is loyalty. A number of banks have
partnered with merchants to deploy and operate
loyalty programmes on top of their payment
function."
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6. U.S. DETAILS SECURITY PLANS FOR CHIP-BASED
PASSPORTS
Source: CardTechnology (10/26) |
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The U.S. State Department will use two security
devices to
ensure the privacy of data on
new electronic
passports, the agency officially
announced this
week. For months the agency
has said it
was exploring ways to secure
the data stored
on the contactless chip that
will be embedded
into passport books. Now
the agency
says it will use Basic Access
Control and
a shielding technology that will
prevent information
on the chip from being
read when the
book is closed. Basic Access
Control requires
that the optical character
recognition
line on the passport's data page
be swiped before
the information on the chip
can be accessed.
That means someone carrying
a device that
can ping the chip with radio
signals would
not be able to obtain information
off the chip
surreptitiously, as the passport
book would
have to be handed over to be swiped
before its
chip will communicate with readers.
The U.S. has
said it plans to start issuing
passports to
diplomats by the end of the
year, with
rollout to citizens beginning
next year.
Some 40 nations are in the process
of adding contactless
smart card chips to
passport books
to carry biometric data that
will aid in
verifying the identify of travelers.
Australia this
week said it has begun issuing
chip-based
passports carrying a digital photo
for improved
identity verification. The 27
nations whose
citizens can enter the United
States with
just a passport must begin issuing
new travel
documents by October 2006 in order
to remain in
the Visa Waiver program. Those
countries include
most of Western Europe
as well as
such allied nations as Japan,
Australia,
New Zealand and Singapore. The
European Union
has set its own mandate of
August 2006
for its 25 member nations to
begin issuing
chip-based passports.
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7. CHIP-BASED HOME BANKING HELPS DUTCH BANK
CUT COSTS
Source: CardTechnology (10/17) |
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Rabobank of the Netherlands, one of the first
users of smart cards and handheld readers
to secure home banking, believes the fewer
help-desk calls it receives as a result of
the program pays for half of the cost of
the readers.
The bank launched the program more than five
years ago and now has 2.5 million users,
1.8 million of them active per month, says
Evert Fekkes, the bank's senior vice president
for payment strategy. The bank receives just
1 help-desk call for every 2,000 users, he
says.
That's about half of what it was before card-based
tokens were introduced in 2001. Next year,
the cards will be converted to EMV, the international
payment standard for smart cards. The savings
pays about 50% of the cost for the handheld
readers, which run roughly 8 euros apiece.
The readers calculate a one-time pass code
using encryption technology after customers
insert their payment cards and enter their
PINs on the device. Customers tap the 8-digit
pass code onto the bank's Web site.
The success of Rabobank's Internet banking
program is also expected to continue to reduce
personal visits by customers to bank branches.
Those visits are projected to drop to just
10 million this year from 100 million in
2000. Banking by telephone and, of course,
ATMs, have also reduced the number of bank
visits.
Rabobank puts the home-banking application
on a special chip card it issues. The current
card runs the Chipknip electronic purse.
But it plans to move the application to the
same chip that will carry the bank's debit
EMV application. It has about 7 million debit
cards in circulation.
In addition, Rabobank and other major Dutch
banks that use chip cards and handheld readers
for Internet banking, such as ABN Amro, soon
plan to introduce a standardized e-commerce
service. It will enable customers from any
of the banks to make purchases from Dutch
Web merchants using the same banking cards
and readers they use for home banking.
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8. VISA APPROVES CONTACTLESS TECHNOLOGY
Source: ICMA Daily News (10/21) |
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Visa has approved technology from two companies
for use in U.S. contactless payment cards,
according to announcements made Wednesday
from the two companies. Switzerland-based
STMicroelctronics won approval for its ST19WR02
microcontroller, the smart card chip. Israel-based
On Track Innovations won approval for its
Hercules operating system and inlay technology.
The inlay consists of the chip, software,
antenna and the material they sit on. Visa
did not immediately respond to calls for
comment. The microcontroller from STMicroelectronics
so far is the only one approved for use by
Visa, Jean-Francois Gatto, STMicroelectronics'
Visa account manger, tells CardLine. He says
Visa has the potential to convert 450 million
magnetic-stripe cards into contactless cards.
A contactless card communicates with a terminal
via radio signals, so that a consumer need
only tap the card on the reader to complete
a transaction.
The contactless payment cards introduced
this year by such issuers as Chase, American
Express, KeyBank and HSBC also carry a magnetic
stripe so that they can be used at conventional
terminals.
Visa Canada Association is a member of ACT
Canada, please visit their web site at http://www.visa.ca.
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9. BOARDING PER SMART CARD - GIESECKE &
DEVRIENT AND SILVERSTROKE TO PRESENT CONTACTLESS
SOLUTION FOR CIVILIAN AVIATION
Source: ICMA Daily News (10/17) |
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The European Aviation Safety Agency (EASA)
is considering allowing the use of RFID technology
for air travel. A final decision is expected
this fall. Radio Frequency Identification
(RFID) lets data be saved to and read from
a chip - contactless. In civilian aviation,
the technology would add flexibility, security,
and comfort for passengers and airlines.
The international technology company Giesecke
& Devrient (G&D), in conjunction
with the software supplier Silverstroke,
has developed a package solution for passenger
processing on the basis of RFID and biometrics.
This will cover every aspect from check in
to requesting information and up to boarding.
G&D and Silverstroke will present this
development at the "Boeing and Airbus
Progress and Requirements on RFID" event
in Ettlingen, Germany on October 17, 2005.
The infrastructure developed by G&D and
Silverstroke combines existing solutions
from RFID, biometrics, and various consumer
devices into one complete, new package solution.
G&D is providing the card applications
for contactless technology as well as biometrics,
Silverstroke is supplying the software system.
Instead of a normal airline ticket, the passenger
will receive a dual-interface card, a smart
card that can transmit data via contact or
contactless. To simplify and speed up check
in procedures, the card owner's fingerprint
can also be saved on the card. All passenger
transactions, from check in to boarding,
will be processed with the smart card or,
optionally, a fingerprint.
The passenger can use contactless technology
at the information booth to easily and quickly
get information on his flight, check in status,
or the way to the gate. A timed system will
let the passenger call up the information
he needs at that point. For example, if a
passenger has latency between connections,
he can check out the shopping possibilities
at the airport. Once the passenger has arrived
at his destination he can get information
on renting a car. Finally, processes using
RFID and biometrics open up the possibility
of mobile boarding. With PDAs or NFC mobile
phones, for example, ground personnel can
read tickets flexibly anywhere.
Giesecke & Devrient is a member of ACT
Canada, please visit their web site at http://www.gi-de.com.
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10. JAPAN TO COMPLETE EMV MIGRATION IN 2010
Source: CardTechnology (10/11)
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Japanese banks and credit card companies
plan to complete their rollout of more secure
cards and terminals that comply with the
international EMV smart card standard by
2010, according to the Japanese Bankers Association.
The banks and card companies have a long
way to go, however. Only about 15% to 20%
of Japan's 260 million credit cards complied
with the smart card standard at the end of
2004. Major banks started converting their
414 million ATM cards only this year. And
just 15% of bank-owned point-of-sale terminals
can accept EMV cards; with far fewer terminals
owned by retailers ready.
But financial industry officials predict
the share of credit cards converted from
less secure magnetic stripe to chip cards
will grow to 40% by 2007. And because of
bad publicity and pressure from the government
following a jump in cases of ATM fraud last
year, banks have made migration to more secure
ATM cards and terminals a priority.
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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
FRENCH CITY EMBARKS ON SIX-MONTH NFC TRIAL
In what seems to be the broadest (in terms
of applications) NFC trial to date, the city
of Caen in the Normandy region of France
will demonstrate the technology in retail
payments, parking facility ticketing, tourist
site information sharing, and eventually
promotions via active posters…
U.S. BANK REGULATORS CALL FOR BEEFING UP
OF PASSWORD-BASED WEB LOG-ONS
Federal regulators will require U.S. banks
to strengthen security for Internet customers
through authentication that goes beyond mere
user names and passwords, which have become
too easy for criminals to exploit.
Bank Web sites are expected to adopt some
form of "two-factor" authentication
by the end of 2006, regulators with the Federal
Financial Institutions Examination Council
said in a letter to banks last week…
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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
VP
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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