QUARTERLY NEWSLETTER OF THE GLOBAL SMART CARD INDUSTRY

JANUARY 2011 ISSUE

this issue

Welcome to the Chairman’s Letter P.1 International Smart ISCAN Member News P.1‐5 Card Associations Network 2011 Event Calendar P.4

International Smart Card Associations Network ‐ ISCAN ‐ is an international alliance of More than an industry, it is a world of news independent smart card associations combining manufacturers, systems

integrators, issuers, Chairman’s Letter ISCAN NEWS potential issuers and From Catherine Johnston, CEO ACT Canada economic or social Every year ISCAN members meet in Q4 to discuss actors involved in the smart card activities. the state of the global market and how we can In – The Canadian Task Force for contribute to progress in the coming year. the Payments System Review is well underway, identifying four 2010, a year where everyone was nervous landscape scenarios that could unfold over because of the global financial crisis, saw the Goals of the the next nine years. shipment of the one billionth EMV card and China Network committing to EMV. In fact, Eurosmart Continued on Page 3 announced that the overall growth in shipments ISCAN's major purpose of smart cards was 18% with financial services, is to support the loyalty and retail accounting for 880 million units proliferation of smart shipped. The effect of China converting to EMV • Eurosmart publishes smart cards card usage worldwide will see that number grow over the coming years. shipments for 2010 and 2011 forecasts by promoting results of 2011 is expected to also see double digit growth. tasks and facilitating Continued on Page 4 exchanges of views The contactless market experienced significant between participating growth in 2010 (40%) as well and is expected to national, continental continue that growth by another 28% in 2011. • GlobalPlatform has completed the and global member Who will benefit the most from this growth? associations. By validation of its first Card Specification Time will tell, but those who pair technology with v2.2 Test Suite. gathering their own consumer appeal will always do well. experience worldwide, Continued on Page 2 ISCAN will be a major I encourage you to visit the web sites of each of

forum to focus on the ISCAN members to learn more about our local strategic and technical markets. All can be reached through issues and to form a www.ISCAN.ca. On behalf of all ISCAN members, global view of the smart we wish you a successful 2011. I hope the news • China UnionPay signed a collaboration card industry. we publish helps you achieve your goals. agreement of UnionPay card acceptance business with Hungary OPT in Catherine Johnston . Chairman, ISCAN

President and CEO, ACT Canada Continued on Page 2 www.iscan.ca

Disclaimer: Each ISCAN organization has made an independent contribution to this newsletter and, as such, is not responsible for the content of the other associations PAGE 2

It is designed to evaluate a product's

compliance to the GlobalPlatform • The 2011 Mobile & Transit Payments • This is the first time that China UICC Configuration, which supports Summit brings together industry UnionPay cooperates with a local

the mobile services sector. stakeholders in Salt Lake City, UT financial institution in Hungary, which GlobalPlatform members participating February 15‐18, 2011 to discuss will lay an important foundation for

in the association's compliance current U.S. and international trends in expanding UnionPay card acceptance program can now expect the mobile payments and transit network in Hungary and Central Europe

finalization of GlobalPlatform test payments. Invited speakers and markets. China UnionPay and tools qualification early in 2011. Five attendees include mobile operators, representatives of some Chinese test tool suppliers – Galitt, FIME, transit operators, attended the signing ceremony. Zsolt Trusted Labs, Barnes International manufacturers, mobile services Becsey, Secretary of Hungarian and Collis – have all committed providers, chip and card Economy Ministry and Economic and extensive resources to the initiative manufacturers, terminal Ren Hongbin, Commercial Counselor of and are working towards the launch manufacturers, payment brands, Chinese Embassy in Hungary attended of GlobalPlatform Qualified Test issuing banks, payments processors, the meeting for the congratulation. For Tools. FIME and Trusted Labs also and systems integrators. more, please visit： www.e‐cts.net provide laboratory services and have • More signs that EMV chip cards are • The development of China IC Card additionally contributed this coming to the U.S. payments market, market：Because of the competition of expertise, alongside card as Travelex announced in December manufacturers and Oberthur the Chip and Pin Cash card, a China IC card market in recent years, Technologies, which have both played reloadable prepaid EMV for prices fell, especially the SIM card prices an active role in the compliance U.S. travelers to Europe and the United fell year after year caused reduced program since the inception of the Kingdom. growth in shipment value, but it passes Test Fest process. • The first NFC‐enabled mobile handsets one hundred million of 2010 for the first • GlobalPlatform has redefined its have reached the retail stores in the time. tagline to 'the standard for managing U.S. The Google Android Nexus S applications on secure chip comes with an NFC chip inside and is 12000 technology'. The new positioning being sold by retail giant Best Buy. 10000 8000 10600 9850 aligns the reality of GlobalPlatform's Other announcements of NFC handsets 9008 6000 8165 7426 impact on the industry with the by Research in Motion, Apple, and 5607 4000 association's current and future Nokia are anticipated in the next few 2000

roadmap for the marketplace. months. 0 Previously positioned as ‘the • The Alliance’s Physical Council 2005 2006 2007 2008 2009 2010F international specification body for and Identity Council have jointly Unit : Million RMB smart card infrastructure’, released a new white paper, PIV I for GlobalPlatform acknowledges its Non‐Federal Issuers: Trusted Identities • China Mobile Hangzhou Branch value proposition is now – and has for Citizens across States, Counties, announced the commercial launch of been for quite some time ‐ one that Cities, and Businesses. The white paper the Hangzhou Citizen Card for mobile reaches far beyond the historic provides guidance for government and phone based on Watchdata’s 13.56MHz positioning of the smart card business to issue secure ID SIMpass™ technology. In early March platform. The new wording accurately that meet the federal standards for 2010, China Mobile, Hangzhou Citizen reflects the ability of GlobalPlatform's trust and interoperability. Card Co., Ltd. and Hangzhou City Pass technology to enable the Card Co., Ltd started the pilot program development of trusted end‐to‐end Continued on Page 4 of Hangzhou citizen card on mobile embedded chip solutions, which serve phone and issued 50,000 SIMpass™ multiple actors and support several dual‐interface SIM cards. business models.

Continued on Page 3 Continued on Page 4

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Continued from Page 1 • AFPC is a member of the CSG / EPC Continued from Page 2 Group

It is chaired by Pat Meredith, FCA. (www.europeanpaymentscouncil.eu) Next steps include an identification of which supports and promotes the barriers, as well as timelines for creation of the Single Euro Payments This marked a new trend

change. This supports the Area (SEPA). for the people of Hangzhou. After 7 months development of implementation trial, users fully accepted this new trend in • The European Payments Council (EPC) is options and next steps resulting in final lifestyle, carrying Hangzhou citizen card the decision‐making e European recommendations to the Minister of and the city transit card in their mobile Payments Council (EPC) is the decision‐ Finance. The timing of this broad phones. For more, please visit: making and coordination body payment landscape review is critical as of the European banking industry in www.scfc.org.cn Canada finalizes our move to EMV and relation to payments. prepares for mobile payment and NFC. The EPC develops the payment schemes

• Cardware 2011: Payment Insights in and frameworks necessary to realize the June is scheduled for June 14th and th Single Euro Payments Area (SEPA). SEPA 15 . Canada's premiere conference for is an EU integration stakeholders draws together issuers, initiative in the area of payments acquirers, regulators, retailers, the designed to achieve the completion of • The 2nd World IC Cards supply industry and others to gain the EU internal market and monetary Summit－Macao 2011 will take place insights into the future of the payment union. at the Venetian Macao‐Resort‐Hotel landscape and to influence change. • Contactless debit: Association Convention Center, Macao on October • During 2010, AFPC have shared with announced that Interac Flash will 27‐28, 2011. Currently held is 13th other stakeholders the definition and debut in summer 2011. RFID ASIA 2011, the new expansion of the maintenance of the Volume‐Book of

• Visa Canada: launched their debit Requirements. The last points RFID China brand (www.RFIDasia‐ product in Canada developed by the working group are : expo.com). For more, please

• MasterCard Worldwide: announced ‐An agreement on the CSG's ToR and on visit：www.scfc.org.cn the appointment of Betty K. DeVita, Labelling president, MasterCard Canada. ‐ All sectors agreed on the new version • Contactless: continues to roll out of the Volume (except on chapters 5

across Canada, with payment brands, and 6) issuers and merchant participation. ‐ Some innovative concepts have been Continued from previous column In Retail: introduced and are under discussion : • Canadian Tire launched a free mobile basic payment services, EMV weak application (app) for iPhone, implementations phasing out... • The major steps must happen in 2011 BlackBerry and Android ‐ Items to be addressed in 2011 are Reach as soon as possible a consensus allowing customers to scan product identified, priorities are fixed and a on Security Requirements (chapter 5) barcodes in stores and instantly access roadmap is defined and agreed and Certification Framework (chapter product information including price, 6) reviews and availability. Customers can Continued on next column ‐ Set up the independent certification also locate the nearest Canadian Tire management body and make the "one store, based on their current location, stop shopping" concept a reality search for products on canadiantire.ca ‐ Include mobile payments within the and browse the Canadian Tire flyer on Volume and introduce some their smartphones. enhancements related to security of contactless and remote payments Continues on page 5 ‐ Clarify relationships (and IPR) with EMVCo and PCI SSC ‐ Help to pilot SEPA compliant solutions or components

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Continued from Page 1 Continued from Page 2

• As every year, Eurosmart chairman, • GlobalPlatform will host a half‐day Continued from Page 2 Marc Bertin, presented at Cartes workshop on Wednesday, 30 March at

Eurosmart market analysis and vision of Cartes in Asia, in . The • The Alliance’s Payments Council will the Smart Security market worldwide. workshop titled ‘Managing a Multi‐ release a comprehensive paper about The Smart Security Industry has Modality and Multiple Ticketing Scheme EMV migration options for the U.S. confirmed its dynamism in 2010 and will in One Universal eTicket with payments market in January, called pass the 5 billion based GlobalPlatform’ will expose delegates to Card Payments Roadmap in the Smart Secure Devices this year. 4.5 GlobalPlatform’s existing technology : How Will EMV Impact billion units of Smart Secure Devices and demonstrate how it meets the the Future Payments Infrastructure. were shipped in 2009, and we anticipate current and future needs of the The report will detail how EMV options that number to grow by 18% in 2010 to transport ticketing sector. The impact card issuers, POS terminal exceed 5.3 billion units. Over 4 billion workshop will address the role of manufacturers, acquirers, and SIM cards have been shipped in 2010 GlobalPlatform Specifications as a merchants. standard framework for deploying and over 1 billion payment cards are • The Smart Card Alliance web site contactless services in smart cards, NFC expected in 2011. The proportion of (www.smartcardalliance.org) has mobiles and USB fobs in a secure and Contactless cards is growing, especially added new informative slide shows interoperable manner. It will also dual card combining both contact and and videotaped interviews with concentrate on the benefits of multi‐ contactless. industry experts to expand the application media to strengthen and • Eurosmart live‐demos at Cartes 2010. resources available to visitors to the extend the use of Eurosmart experts presented live‐ industry’s more comprehensive web beyond the current boundaries of demos at Cartes Exhibition in two areas: site. Over 1.3 million web site visits transport networks, by enabling co‐ Smart M2M, in the Internet of Things occurred in 2010. zone: demos included eCall, smart existence of multiple transport

metering, hardware enabling M2M applications on the same media.

applications, M2M SIM‐centric services

and M2M innovation services for end‐

users. uses cases, in the

Identification zone : demos included

mobile and fixed enrolment stations, biometrics for ID verification, and signature, applications on Match‐on‐Card, and ISCAN SMART CARD INDUSTRY EVENT CALENDAR mobile terminals for card authentication. Security Document World 2011, London, UK, 4‐6 April 2010 • New Eurosmart White Paper on Eurosmart supported event Biometrics. The White Paper on

biometrics covers biometric technology 2011 Payments Summit – Salt Lake city, Utah, February 15 – 17, 2011 state of the art and best use cases and A Smart Card Alliance event technical choices of implementation

when in combination with smart card 2011 Smart Card Alliance Annual Conference – Chicago, IL, May 2 – 5, 2011 technology. The study involves also the A Smart Card Alliance event concept of creating biometric characteristics for physical documents, Cardware 2011: Payment Insights – Niagara Falls, Canada, June 14 – 15, 2011 identification of use cases and An ACT Canada event techniques, and finally the benefits of putting together human and physical document biometric characteristics. It also makes recommendations on the use of biometrics for cases of identification and authentication of individuals and goods. • PAGE 5

Continued from Pg 3 Continued from Pg 4 • identification and authentication of Changing the Market: http://www.iscan.ca individuals and goods. ACT Canada and our members continue to

influence the market through Strategic ISCAN Members: • Eurosmart vision on the Smart M2M Leadership teams. The 2011 SLTs will and the Internet of Things. Jean‐Pierre include: Mobile, Merchant, CyberSecurity Delesse, convenor of Eurosmart New (new), Prepaid (new) and Identity Form Factors Working Group, made a Management. Participation is a member

presentation on "Security, which benefit and fees apply for non‐members. challenges for the Internet of Things ?", http://www.actcda.com on Tuesday 7 December 2010, at the The Issues Alert team also influences the session “Internet of things ‐ state of the market through the early identification of art”, at Cartes & IDentification. emerging issues and sharing information to mitigate risks. This team is open only to members.

http://www.afpc‐cartes.com For more information on these and other Canadian stories, please visit

www.actcda.com and view our monthly • EESTEL has launched the label EETS newsletter under the resources tab. (Expert in E‐Transactions Systems). E‐ Transactions have a stronger and http://www.apsca.org stronger impact on everyday life, whether in payment, transports and ticketing, health, telecommunications. This domain uses more and more EESTEL’s objective is to attribute an EETS complex and abounding technologies, label to dozens of experts in 2011, in order and involves everybody’s identity and set links with the world of higher education http://www.eestel.com authentication. Services Operators and and with our European and overseas vendors hold a growing space in the economical concert. Experts’ role is partners. essential to enable the whole Society to

progress and to control the power of • EESTEL and ADEN to organize a seminar http://www.eurosmart.com such or such System. To find one’s way on E‐Payment at the French Parliament. in the jungle of specialties and skills, EESTEL works together with ADEN EESTEL, the E‐Transactions European (French Agency to develop the Digital Experts Association, implements a label Economy) to organize a seminar on E‐ approach, based on individuals Payment at the French Parliament in http://www.globalplatform.org evaluation assessing E‐Transactions June and issue a common white paper in Experts. The label bears on six November. functional and five technical specialties. • EESTEL, the E‐Transactions European It is open to anybody willing his or her Experts Association, is a club where its skills in E‐Transactions be acknowledged members exchange, on a monthly basis, http://www.smartcardalliance.org and promoted. On the operational information on technical, marketing and hand, EESTEL leans on an independent business issues linked to E‐Transactions. institution, the COREF EESTEL counts today 23 members (www.coref.asso.fr), which provides for representing more than 200 Engineers this process, its auditors and the rigor of and Experts. EESTEL is member of its procedures. So far, several experts ISCAN. For more information, please

have received the EETS label. visit www.eestel.com. Continued next column http://www.scfc.org.cn