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I N B R I E F

Gemalto has been commissioned to carry out the migration to microprocessor EMV credit cards for the Royal Bank of Scotland (RBS) across three markets in Asia: Indonesia, Taiwan and India. The first project began in October 2008 in Indonesia, taking just three months to implement, with projects in Taiwan and India to follow. Gemalto provides RBS with a range of products and serv-ices including personalization and project management. Fraud reduction is the major driving force behind Asia’s commitment to EMV migration. According to the Indonesian Credit Card Association, cred-it card fraud in the country amounted to 35 billion rupiah (approximately EUR2.3 million) in 2007.

Siemens Enterprise Communications Group (SEN) and Giesecke & Devrient (G&D) are collaborating on integrated security solutions. G&D is supplying SEN with smart cards and cryptographic USB tokens from the StarSign product family. Until now, SEN has primarily used smart cards featuring Siemens’ own operating system for use as company ID and sig-nature cards. SEN will now also include StarSign products from G&D in its port-folio. The StarSign product series offers a broad range of security tokens in a variety of form factors and for different operat-ing systems. In future, the two companies intend to offer their customers jointly developed company ID and identity solu-tions in a global cooperation model that will take effect immediately.

SCM Microsystems stockholders have approved a proposed merger of the com-pany with Hirsch Electronics. At a spe-cial meeting of SCM stockholders held in April, more than 99% of the votes cast were in favour of the proposal related to the merger. Hirsch shareholders approved the proposed merger in March. Acquiring Hirsch, which was already a distribution partner of SCM, approximately dou-bles the size of SCM. The acquisition is expected to position SCM to deliver convergence solutions with stronger tech-nological expertise, customer offerings, market penetration, regional strengths and service capabilities. Following sat-isfaction of remaining closing condi-tions, US-based Hirsch will become a wholly-owned subsidiary of SCM. Each company’s products and services will con-tinue to be marketed, sold and supported using the existing SCM and Hirsch brand names.

supported financial institutions, view electronic receipts, and create expense reports, all from the palm of their hand. The Blaze Mobile Wallet also offers valuable location based services such as maps and points of interest, including ATMs, restaurants and much more.

The second announcement came from INSIDE Contactless and First Data. These two companies announced a three-year agreement to develop contactless payment stickers, which First Data will market as GO-Tag products. With this agreement, INSIDE will supply MicroPass payment sticker prelams exclusively to First Data-qualified card manufacturers for production.

First Data says it will be marketing and dis-tributing GO-Tag products to financial institu-tions, major US merchants, and other distribu-tion channels in a variety of form factors.

“First Data’s GO-Tag solution represents an important step in the evolution from today’s plastic cards and fobs, offering a bridge to the future of mobile payments,” said Barry McCarthy, general manager, Mobile Commerce and Point of Sale Solutions for First Data.

MOBILE BANKING

Challenges, but opportunities for mobile banking

Two new studies have shown that there are plenty of reasons for opti-

mism that mobile banking can take off, but that there are significant hurdles still to overcome, particularly in the USA.

The first study, conducted by KPMG, the audit, tax and advisory firm, says that US con-sumers believe mobile banking is important but do no not want to pay for it and also are wary of using their mobile devices such as cell phones, smartphones, and personal digital assistants (PDAs) for financial transactions and online banking.

KPMG’s third annual Global Consumers and Convergence survey of more than 4000 people in 19 countries worldwide, revealed that 85% of US respondents believe mobile banking is important but they do not want to pay for it. The overwhelming majority of US respondents said they had never tried banking through a mobile device (91%).

Of those respondents who have not conduct-ed banking through a mobile device, 48% cited security and privacy as the primary reason.

Some 68% of US respondents also said

that their current bank does not offer banking through a mobile device and only nine percent said they had tried mobile banking.

Despite the pricing, privacy, and security concerns, 19% of US respondents said they are at least ‘somewhat likely’ to use their mobile device for online banking in the next 12 months. In addition, seven percent said they are willing to pay at least a nominal fee to access online banking services from their mobile device.

According to the survey, the majority of US consumers also are not comfortable with using their mobile device for financial transactions (66%).

“US consumers – as well as worldwide – need to be convinced that new payment meth-ods and banking vehicles are safe and secure for them to succeed,” said Mitch Siegel, director of payment advisory services in KPMG LLP’s Financial Services practice. “Once these con-cerns are addressed, consumer confidence can grow and adoption could potentially increase.”

“With high mobile device penetration rates, US consumers are accustomed to using the mobile channel to access data,” added Siegel. “And it may only be a matter of time before they grow comfortable with using – and poten-tially paying a premium to use – the mobile device for browser-based and point-of-sale, ‘contactless’ financial transactions.”

The second study predicts a rise in the use of mobile banking, as phones become more sophisticated and begin replacing computers as consumers’ preferred device for accessing the internet.

According to management consultancy, Arthur D. Little, mobile banking now has an opportunity to become much more sophisti-cated and savvy banks – that act early – will be able to generate a new revenue stream while boosting their brand image and supporting cus-tomer retention.

According to the report, customers’ bank-ing behavior is changing, with a significant decrease in branch use and a steep increase in the use of internet and telephone banking. Arthur D. Little argues that mobile banking is reaching product maturity, and the traditional SMS-based mobile banking service is simply no longer enough to meet customers’ increasingly sophisticated telecommunications expectations. There are four specific areas driving the devel-opment of next generation mobile banking, all of which have scope to increase banks’ revenue, customer retention, and brand equity. These are:

jargon, convergence is now a reality. Today’s internet user is increasingly mobile (for

April 2009 Card Technology Today

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6Card Technology Today April 2009

example, 29% of Chinese internet users have no computer access, and access the web via mobile handsets);

and other internet-ready mobile devices are driving integrated web- and telephone-based banking services, supported by specific mobile applications;

theft, etc. further boost mobile banking with its incorporated personal security safeguards such as PIN-protected chips and operator-controlled functions;

that allows mobiles to communicate with other nearby devices could be revolutionary in offering online payments, providing authorization and processing services, and supporting a range of location-based services and marketing opportunities.

“The mobile phone has become one of the most indispensable devices the modern con-sumer carries with them each day. For banks to deliver on personalized service and an excep-tional customer experience, offering sophisticat-ed mobile banking solutions will be a key dif-ferentiator in the coming years,” said Dr. Gerrit Seidel, Managing Director and Global Head of Arthur D. Little’s Financial Services Practice.

Contact: Gerrit Seidel at Arthur D. Little,

Tel: +49 89 38088 770,

Email: seidel.gerrit@adlittle.com

CARD READERS

21m personal card readers in Europe

New figures announced by industry supplier XIRING show that 21 mil-

lion bank card based strong authenti-cation solutions have been delivered in Europe to replace the static password for online banking services and to secure e-commerce payments.

In early 2008 XIRING launched an annual survey on the bank card based strong authen-

tication solutions market, which includes home chip and PIN and similar products. The 2008 consolidated year-end figures for Europe (including Switzerland and Turkey) show the number of solutions delivered over twelve months has doubled; proving the relevance of the solutions for replacing static passwords, especially to secure online bank-ing transactions.

With around 21 million solutions distrib-uted by the 2008 year-end, personal card based strong authentication is the most deployed solution in Europe after the static password for securing online banking (see Table).

XIRING said that the North of Europe is in the lead with about 15 million users equipped in Scandinavia, Benelux and the UK, half of the 2010 forecast (31 million). In the UK it is estimated that more than seven million Britons were equipped over 18 months.

2008 also saw new countries opening up to bank card based strong authentication solu-tions including France and Italy. In this area, it is estimated that 60 million users will be equipped at the end of 2010, with significant volumes in France (10 million).

Banque Populaire, the first French bank to launch the solution for its internet customers, began the deployment programme of XIRING’s Vericode at the beginning of the year. (For its part, XIRING delivered more than 10 million devices in 2008.)

EID

eIDs a hit with kids and students

French smart card manufacturer Gemalto has announced a range of

projects which target eID technology at younger members of society.

Starting with the youngest first, the com-pany explained a project it has rolled out alongside the Belgian government. It consists of a dedicated eID card for children aged under 12 with specific features intended to increase their security in emergency situa-

I N B R I E F

Hypercom has announced that its PCI compliant S9 PIN Pad has received APACS (Association of Payments And Clearing Services) Common Criteria accreditation in the UK. The new accreditation and listing on the APACS website replaces the previous accreditation of the non-PCI model. The device can be connected to Hypercom’s Optimum T4200 terminals, providing a dedicated customer interface for cardhold-ers to insert their card and enter their PIN number securely.

Gemalto has launched its Sealys e-health terminal, specially designed for the German market. New services it will provide include access to the patient’s electronic medical file and emergency data such as blood group, allergies and ongoing treatment records. Doctors will also be able to issue electronic pre-scriptions that facilitate data exchange with pharmacists and reduce fraud, while eliminating paperwork. The Gemalto ter-minal also offers optional connection of biometric and contactless devices, allow-ing doctors to sign e-prescriptions using fingerprints or any contactless device. The product is fully and immediately operational with the current healthcare system and also has all the necessary features to operate in online mode in connection with the future ‘Telematik’ infrastructure, due to be implemented in 2010. It has been approved by Gematik, which establishes that it meets the strin-gent security requirements of the coun-try’s e-healthcare system.

– Hypercom, Ingenico and VeriFone have announced the formation of the Secure POS Vendor Alliance (SPVA), a non-profit business organisation char-tered with implementing common pay-ment security standards among vendors of secure point-of-sale (POS) devices used by retailers, acquirers and cardhold-ers. The SPVA will increase awareness of security issues, encourage adoption of best practices and ease consistency among standards that govern disparate components and participants in the pay-ment environment. Membership is open to all payment industry stakeholders. VeriFone, Ingenico and Hypercom, as founding members of the new alliance, will serve on the SPVA managing com-mittee, along with two other directors to be elected by the membership in the coming months.

European area (incl. Switzerland and Turkey)

Jan-08 Jan-09 2010 Vision (e)

Millions of online banking users and/ or e-commerce buyers

110 130 200

Millions of Home Chip and PIN (and similar products) delivered

10 21 60

Equipment rate 9% 16% 30%

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