- Email: [email protected]
Positive industry outlook for 2003
news industry statistics
Positive industry outlook for 2003 Following Schlumberger’s industry round up last month, Eurosmart has released its predictions for the year with similar positive sounds regarding the direction of the smart card sector – in particular for microprocessor cards. The association reported that shipments of smart cards in 2002 rose by just a modest 2% worldwide over 2001 to 1.786 billion units (see Table 1). However, within that figure was impressive growth in the lucrative microprocessor market of 17% to 701 million units and a decline
of 5.8% in the memory card market to 1.085 billion units, primarily because of weak sales in the telecoms market. The growth was forecast to continue in the microprocessor market in 2003, with the association predicting a further 16% rise to 815 million units (see Table 2). The memory card market was also predicted to stage a recovery in 2003, with a 2% rise to 1.102 billion units expected. This modest rise will be thanks to the non-telecoms sectors which are expected to display double-digit growth. From a geographical point of view, Europe, the Middle East and Africa remained the biggest region for both memory and microprocessor card (see Table 3). However the Asian Pacific market once again confirmed its growth potential and Cards (millions of units) Memory
Telecom
Microprocessor
950
430
Financial Services, Retail, Loyalty
23
175
Government/healthcare
30
32
Transport
60
15
Pay TV
0
35
IT Security
9
7
13
7
1085
701
Others Total
Source: Eurosmart. Table 1. Worldwide shipments by sector 2002.
Memory
% Growth
930
–2
480
12
Financial Services, Retail, Loyalty
32
39
205
17
Government/healthcare
45
50
40
25
Transport
70
17
–2
33
Pay TV
—
—
40
14
IT Security
10
11
18
157
Others
15
15
12
71
1102
2
815
16
Telecom
Total
Microprocessor
% Growth
Source: Eurosmart. Table 2. 2003 worldwide shipment forecast (millions of units).
Memory
Microprocessor
EMEA
391
414
Asia Pacific
369
231
Americas
325
56
1085
701
Total
Source: Eurosmart. Table 3. 2002 shipments by region (millions of units).
Card Technology Today June 2003
in brief • Card-printing and issuance systems provider Datacard Group has sacked its president and CEO, Jerry Johnson. The rumour mill suggests that the company’s financial results, although showing growth, were not meeting the board’s expectations. Chairman of the board Hatim Tyabji will serve as interim CEO while the company searches for a suitable replacement. Johnson had been in charge of Datacard since June 1999 and was recently made chairman of GlobalPlatform, the consortium that sets standards for multiapplication smart cards. • Atmel Corporation has announced a new family of devices or contactless smart cards and industrial RFID. The CryptoRF family has a 13.56 MHz, ISO14443 Type B compliant interface and is available with 1K to 64K bits of memory. Because this solution does not require the expense of adding an operating system or ROM development resources, the products can be cheaper (US$0.35–0.8 depending upon memory capacity), the supplier claims. Meanwhile, the high capacity memories could be used for storing photographic images or biometric information to allow greater security. The security features of CryptoRF are identical to those in Atmel’s CryptoMemory contact smart card IC family, so allowing a simple migration path from contact to contactless applications. • At this year’s CardTech/SecurTech show, the Larry Linden Award was presented to Giesecke & Devrient (G&D) and Siemens Business Services (SBS) for their efforts in the Macao Multifunction Smart ID Card project. The award is typically given to organisations that are instrumental in a particularly innovative and well-managed security technology project. The Macao Special Administrative Region in China contracted G&D and SBS to implement a multifunction smart identification card, which is being distributed to its 460,000 residents over the next four years. The smart card currently serves as Macao’s new identity card and includes a biometric application and special security features within the card body and chipset. It is expected that the smart card will ultimately serve as a multi-application card, combining the ID card with a driving licence, student card, medical card and electronic wallet. • Latvian bank Unibanka has begun issuing EMV-standard Visa credit and debit cards using TietoEnator’s Transmaster software. The smart cards are supplied by Austria Card. The Transmaster solution manages the complete cycle of payment card processing. The vendor says one of its main priorities over the next few years is to help European banks migrate to smart cards. Unibanca began issuing the EMV cards at the end of April 2003.
3
news
in brief • ViVOtech, a provider of contactless smart card payment solutions, has received certification for its ViVOpay payment terminal from Global Payments, a provider of electronic payment card and cheque processing solutions. By certifying ViVOpay, Global Payments and its independent sales organisations are able to offer their merchant customers an easy way to upgrade their POS terminals to accept payment from contactless cards. The ViVOpay technology centres around a Dynamic Strip that plugs into a merchant’s magnetic-stripe-based terminal, allowing it to accept various contactless payment devices, including RF payment cards and infrared-enabled cell phones. • Schlumberger Smart Cards and Terminals has announced a smart card chip-based payment solution that works using standard protocols between a merchant’s point of sale and back office systems. Using the cheqFlex solution, merchants can issue a smart card to their customers that will authorise low-cost ACH payments upon entry of the correct PIN by the customer. To sign up to the scheme, a customer must first fill out a form authorising the merchant to debit their chequing account. During normal operation, the PIN entered by the customer is checked, and if verified the smart card chip passes relevant information to the POS terminal, verifies the card and then creates a payment transaction. The payment terminal is able to write data onto the smart card’s chip, including digital receipts, coupons or reward points. These can be viewed by the customer and even hooked up to common home accounting systems. • The Federation of Small Businesses (FSB) has called on the UK banking industry to make sure that independent traders are kept fully informed as to the timetable for chip and PIN migration and to do more to protect against cardholder-not-present fraud. UK banks and high street retailers are currently testing a new chip and PIN payment system with nationwide roll out expected by 2005. Businesses that do not have the requisite point-of-sale pinpads will become liable in the event of fraud. The FSB is concerned that many small firms are still unaware of the plans. • Datacard Group is to produce a smart card personalisation module for the Datacard 9000, 7000 and 500 Series card issuance systems in the third quarter of 2003. The module will allow card issuers to personalise the most common contactless cards, including ISO type A and B (14443) cards, MIFARE cards and Sony’s FeliCa cards. Meanwhile, the supplier introduced a universal smart card platform for the personalisation of RFID cards.
4
now accounts for around 33% of shipments in both the memory and microprocessor markets. Olivier Piou, the new chairman of Eurosmart, presented the figures during a recent press conference in Orlando. Piou is also president of Schlumberger Smart Cards and Terminals. He told journalists that Eurosmart aims to begin giving its figures on a more regular quarterly basis, and that it would attempt longer range forecasts. The association will also try to improve the visibility of the non-Eurosmart market share. Contact: Eurosmart, www.eurosmart.com
financial
G&D rolls out home banking system Hypothekarbank Lenzburg (HBL), one of Switzerland’s major regional independent banks, is to offer its customers a new online banking service. The company’s traditional home banking procedure based on entry of a PIN and TAN (transaction number) will be replaced by the use of smart cards. The technology is being supplied by Giesecke & Devrient (G&D) and its technology partners Trivadis and AET. Besides providing access to the e-banking application, the G&D card will also enable encryption and digital signing of e-mails. This means that in future all e-banking customers will receive their bank statements by e-mail, in encrypted, digitally signed form. All business correspondence between customers and HBL will also be exchanged electronically. The application is supported by Windows, Linux and Macintosh operating systems. Communication between the smart card and the customer PC will be enabled by AET’s SafeSign software. As well as smart cards, which require a card reader, the bank is also issuing USB tokens to laptop users. These tokens can be plugged into the USB port of a notebook and – like the card – provide maximum security, mobility and convenience. Benefits of the PKI (Public Key Infrastructure) system, besides the higher security standard, include enhanced ease-of-use: in future users will authenticate themselves just once with their smart cards or tokens, and can then carry out various transactions. The PKI was already introduced internally in 2002. HBL estimates that all existing e-banking users will be able to migrate to the new system during 2003. By the end of the year, a total of 2000 customers will be using the smart card
technology. New customers will receive their personalized G&D cards straight away. Contact: Andrea Bockholt at G&D, Tel: +49 89 4119 2422, Fax: +49 89 4119 2020, email: [email protected]
loyalty
Loyalty vendors welcome patent pact A deal has been struck between Catuity, Visa USA, Visa International and Welcome Realtime that will increase the availability of interoperable systems for smart-card based loyalty rewards at the point of sale. The agreement will see Catuity, Visa and Welcome cross license existing and future patents for Visa smart loyalty programs. The cross patent will be worldwide and royalty-free. All Visa members and merchants will now be able to implement smart Visa loyalty programs without the threat of patent claims from the other parties involved in this agreement. This is an important step in achieving more rapid expansion of the market for loyalty programs using smart cards, the suppliers claim. As well as cross licensing patents, the players will adopt of a common interoperability platform that will allow card issuers and merchants to mix and match software products from different vendors. This is also expected to encourage innovation and accelerate development. The companies will achieve interoperability by integrating Visa interoperability toolkits within their platforms. These toolkits, demonstrated by Visa, Welcome and Catuity at the end of last year, allow cards with one technology to be used in terminals connected to a different loyalty platform, and for data from different loyalty processing centers to be aggregated to enable customer service activities. Contact: Michael Howe at Catuity, Tel: +1 313 567 4348, Aneace Haddad at Welcome, Tel: +33 4 4297 5897
company news
Philips and Visa promote contactless payments Royal Philips Electronics and Visa International have announced a major alliance to promote and develop the application of contactless chip technology for payment transactions. The companies hope that together they will be able to promote the benefits of fast and secure universal commerce to consumers and businesses worldwide, such as content providers, merchants and banks.
Card Technology Today June 2003
Positive industry outlook for 2003 Following Schlumberger’s industry round up last month, Eurosmart has released its predictions for the year with similar positive sounds regarding the direction of the smart card sector – in particular for microprocessor cards. The association reported that shipments of smart cards in 2002 rose by just a modest 2% worldwide over 2001 to 1.786 billion units (see Table 1). However, within that figure was impressive growth in the lucrative microprocessor market of 17% to 701 million units and a decline
of 5.8% in the memory card market to 1.085 billion units, primarily because of weak sales in the telecoms market. The growth was forecast to continue in the microprocessor market in 2003, with the association predicting a further 16% rise to 815 million units (see Table 2). The memory card market was also predicted to stage a recovery in 2003, with a 2% rise to 1.102 billion units expected. This modest rise will be thanks to the non-telecoms sectors which are expected to display double-digit growth. From a geographical point of view, Europe, the Middle East and Africa remained the biggest region for both memory and microprocessor card (see Table 3). However the Asian Pacific market once again confirmed its growth potential and Cards (millions of units) Memory
Telecom
Microprocessor
950
430
Financial Services, Retail, Loyalty
23
175
Government/healthcare
30
32
Transport
60
15
Pay TV
0
35
IT Security
9
7
13
7
1085
701
Others Total
Source: Eurosmart. Table 1. Worldwide shipments by sector 2002.
Memory
% Growth
930
–2
480
12
Financial Services, Retail, Loyalty
32
39
205
17
Government/healthcare
45
50
40
25
Transport
70
17
–2
33
Pay TV
—
—
40
14
IT Security
10
11
18
157
Others
15
15
12
71
1102
2
815
16
Telecom
Total
Microprocessor
% Growth
Source: Eurosmart. Table 2. 2003 worldwide shipment forecast (millions of units).
Memory
Microprocessor
EMEA
391
414
Asia Pacific
369
231
Americas
325
56
1085
701
Total
Source: Eurosmart. Table 3. 2002 shipments by region (millions of units).
Card Technology Today June 2003
in brief • Card-printing and issuance systems provider Datacard Group has sacked its president and CEO, Jerry Johnson. The rumour mill suggests that the company’s financial results, although showing growth, were not meeting the board’s expectations. Chairman of the board Hatim Tyabji will serve as interim CEO while the company searches for a suitable replacement. Johnson had been in charge of Datacard since June 1999 and was recently made chairman of GlobalPlatform, the consortium that sets standards for multiapplication smart cards. • Atmel Corporation has announced a new family of devices or contactless smart cards and industrial RFID. The CryptoRF family has a 13.56 MHz, ISO14443 Type B compliant interface and is available with 1K to 64K bits of memory. Because this solution does not require the expense of adding an operating system or ROM development resources, the products can be cheaper (US$0.35–0.8 depending upon memory capacity), the supplier claims. Meanwhile, the high capacity memories could be used for storing photographic images or biometric information to allow greater security. The security features of CryptoRF are identical to those in Atmel’s CryptoMemory contact smart card IC family, so allowing a simple migration path from contact to contactless applications. • At this year’s CardTech/SecurTech show, the Larry Linden Award was presented to Giesecke & Devrient (G&D) and Siemens Business Services (SBS) for their efforts in the Macao Multifunction Smart ID Card project. The award is typically given to organisations that are instrumental in a particularly innovative and well-managed security technology project. The Macao Special Administrative Region in China contracted G&D and SBS to implement a multifunction smart identification card, which is being distributed to its 460,000 residents over the next four years. The smart card currently serves as Macao’s new identity card and includes a biometric application and special security features within the card body and chipset. It is expected that the smart card will ultimately serve as a multi-application card, combining the ID card with a driving licence, student card, medical card and electronic wallet. • Latvian bank Unibanka has begun issuing EMV-standard Visa credit and debit cards using TietoEnator’s Transmaster software. The smart cards are supplied by Austria Card. The Transmaster solution manages the complete cycle of payment card processing. The vendor says one of its main priorities over the next few years is to help European banks migrate to smart cards. Unibanca began issuing the EMV cards at the end of April 2003.
3
news
in brief • ViVOtech, a provider of contactless smart card payment solutions, has received certification for its ViVOpay payment terminal from Global Payments, a provider of electronic payment card and cheque processing solutions. By certifying ViVOpay, Global Payments and its independent sales organisations are able to offer their merchant customers an easy way to upgrade their POS terminals to accept payment from contactless cards. The ViVOpay technology centres around a Dynamic Strip that plugs into a merchant’s magnetic-stripe-based terminal, allowing it to accept various contactless payment devices, including RF payment cards and infrared-enabled cell phones. • Schlumberger Smart Cards and Terminals has announced a smart card chip-based payment solution that works using standard protocols between a merchant’s point of sale and back office systems. Using the cheqFlex solution, merchants can issue a smart card to their customers that will authorise low-cost ACH payments upon entry of the correct PIN by the customer. To sign up to the scheme, a customer must first fill out a form authorising the merchant to debit their chequing account. During normal operation, the PIN entered by the customer is checked, and if verified the smart card chip passes relevant information to the POS terminal, verifies the card and then creates a payment transaction. The payment terminal is able to write data onto the smart card’s chip, including digital receipts, coupons or reward points. These can be viewed by the customer and even hooked up to common home accounting systems. • The Federation of Small Businesses (FSB) has called on the UK banking industry to make sure that independent traders are kept fully informed as to the timetable for chip and PIN migration and to do more to protect against cardholder-not-present fraud. UK banks and high street retailers are currently testing a new chip and PIN payment system with nationwide roll out expected by 2005. Businesses that do not have the requisite point-of-sale pinpads will become liable in the event of fraud. The FSB is concerned that many small firms are still unaware of the plans. • Datacard Group is to produce a smart card personalisation module for the Datacard 9000, 7000 and 500 Series card issuance systems in the third quarter of 2003. The module will allow card issuers to personalise the most common contactless cards, including ISO type A and B (14443) cards, MIFARE cards and Sony’s FeliCa cards. Meanwhile, the supplier introduced a universal smart card platform for the personalisation of RFID cards.
4
now accounts for around 33% of shipments in both the memory and microprocessor markets. Olivier Piou, the new chairman of Eurosmart, presented the figures during a recent press conference in Orlando. Piou is also president of Schlumberger Smart Cards and Terminals. He told journalists that Eurosmart aims to begin giving its figures on a more regular quarterly basis, and that it would attempt longer range forecasts. The association will also try to improve the visibility of the non-Eurosmart market share. Contact: Eurosmart, www.eurosmart.com
financial
G&D rolls out home banking system Hypothekarbank Lenzburg (HBL), one of Switzerland’s major regional independent banks, is to offer its customers a new online banking service. The company’s traditional home banking procedure based on entry of a PIN and TAN (transaction number) will be replaced by the use of smart cards. The technology is being supplied by Giesecke & Devrient (G&D) and its technology partners Trivadis and AET. Besides providing access to the e-banking application, the G&D card will also enable encryption and digital signing of e-mails. This means that in future all e-banking customers will receive their bank statements by e-mail, in encrypted, digitally signed form. All business correspondence between customers and HBL will also be exchanged electronically. The application is supported by Windows, Linux and Macintosh operating systems. Communication between the smart card and the customer PC will be enabled by AET’s SafeSign software. As well as smart cards, which require a card reader, the bank is also issuing USB tokens to laptop users. These tokens can be plugged into the USB port of a notebook and – like the card – provide maximum security, mobility and convenience. Benefits of the PKI (Public Key Infrastructure) system, besides the higher security standard, include enhanced ease-of-use: in future users will authenticate themselves just once with their smart cards or tokens, and can then carry out various transactions. The PKI was already introduced internally in 2002. HBL estimates that all existing e-banking users will be able to migrate to the new system during 2003. By the end of the year, a total of 2000 customers will be using the smart card
technology. New customers will receive their personalized G&D cards straight away. Contact: Andrea Bockholt at G&D, Tel: +49 89 4119 2422, Fax: +49 89 4119 2020, email: [email protected]
loyalty
Loyalty vendors welcome patent pact A deal has been struck between Catuity, Visa USA, Visa International and Welcome Realtime that will increase the availability of interoperable systems for smart-card based loyalty rewards at the point of sale. The agreement will see Catuity, Visa and Welcome cross license existing and future patents for Visa smart loyalty programs. The cross patent will be worldwide and royalty-free. All Visa members and merchants will now be able to implement smart Visa loyalty programs without the threat of patent claims from the other parties involved in this agreement. This is an important step in achieving more rapid expansion of the market for loyalty programs using smart cards, the suppliers claim. As well as cross licensing patents, the players will adopt of a common interoperability platform that will allow card issuers and merchants to mix and match software products from different vendors. This is also expected to encourage innovation and accelerate development. The companies will achieve interoperability by integrating Visa interoperability toolkits within their platforms. These toolkits, demonstrated by Visa, Welcome and Catuity at the end of last year, allow cards with one technology to be used in terminals connected to a different loyalty platform, and for data from different loyalty processing centers to be aggregated to enable customer service activities. Contact: Michael Howe at Catuity, Tel: +1 313 567 4348, Aneace Haddad at Welcome, Tel: +33 4 4297 5897
company news
Philips and Visa promote contactless payments Royal Philips Electronics and Visa International have announced a major alliance to promote and develop the application of contactless chip technology for payment transactions. The companies hope that together they will be able to promote the benefits of fast and secure universal commerce to consumers and businesses worldwide, such as content providers, merchants and banks.
Card Technology Today June 2003