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Issue Date: April 2003 (es)

Smartcard Briefs

1 April 2003

New owner - loading ATM from NDS
National Data Systems (NDS) has launched the latest in its wide range of co-branded ABSA ATM machines. Instead of making cash deposits daily, the retailer replenishes the ATM himself, saving cash deposit fees and allowing clearance of his tills more frequently. Additionally, dependency on cash-in-transit companies is avoided as cash is circulated via the ATM, ensuring less cash is transported to the bank.
The ATM, with its compact 'footprint', is enclosed in a built-in cubicle, so clientele cannot observe the routine of the cash hoppers being changed. This makes the ATM far less vulnerable than a front-loading model. Global experience has shown that retailers who have installed ATMs have experienced increased customer volumes while market research has also indicated that an in-store ATM can boost a retailer's turnover up to 30% per month, without any additional advertising and promotional expenditure.
"An in-store ATM has become one of the conveniences customers now expect from a retailer. People want easy access to their money and shop-owners find that they obtain new customers because people come in to draw money and most of them then buy from the shop," says Stephen van Basten, sales manager of the ATM Annuity division within NDS. "In addition, customers find an ATM in a brightly lit and busy shop so much more convenient and more secure than in a deserted shopping centre or mall where they feel vulnerable," says Van Basten.
Hong Kong transport systems wise up
The Hong Kong transport department, in conjunction with the HK taxi association have announced they are to enable Hong Kong's 15 200 taxis with Octopus smartcard readers. The Octopus smartcard system is the largest contactless smartcard system in Hong Kong where over 1,6 billion transactions occur on the public transport system yearly. Currently, the system is run on buses, rail and ferry. This decision will enable commuters using transport smartcards to extend their usage to taxis.
Chip vs paper in Chile
Chile's government-run Metro of Santiago has gone live with contactless smartcards that operate throughout the 52 subway stations and three lines of Santiago. The company is completing distribution of 100 000 smartcards, provided by Giesecke & Devrient. The system has deployed 160 card-reloading machines and 320 smartcard readers in turnstiles. Called 'Multivia,' each card costs 1000 pesos (about US$1,35), but cardholders receive a free subway ride after 20 rides and pay 20 pesos less per trip than do paper ticket users. Multivia users can have their 1000 pesos refunded within three months of purchase if they are not happy with the smartcard.
American Express introduces first smartcard Internet application
Blue from American Express, the credit card featuring multiple cardmember benefits including a smart chip, now offers the industry's first smartcard application that can be downloaded from the Internet. The new application - ID Keeper - stores and 'remembers' multiple websites, online IDs and passwords; offers consumers easy, automated access and entry to favourite websites; and provides a secure, convenient way to navigate and shop online.
"ID Keeper combines the security and flexibility of smart chip technology with the convenience and reach of the Internet," said David Bonalle, vice president and general manager of advanced payments development, American Express. "ID Keeper delivers on the promise of smart chip applications available via the Internet."
Ride-now-pay-later smartcard in testing
JCB Co, Japan's leading credit card issuer, has announced that it will test a smartcard that allows commuters to pay at the end of the month for subway rides. The contactless chip card, which travellers wave in the vicinity of turnstiles to record each trip, will be issued to about 1000 individuals for use on the subway in Sapporo, Japan. At the end of the month, charges are totalled and billed to the commuter's credit card or bank account. Post payment allows transit operators to offer discounts based on an individual's monthly travel, such as offering a price break for frequent travel or for riding during off-peak hours.
Chinese telecom development using smartcards
WatchData, a Beijing-based smartcard vendor, says it has won a contract worth more than $10 million to provide subscriber-identity chip cards to China Unicom, China's No. 2 mobile network operator. WatchData says it will supply 7 million SIM (subscriber identity module) and UIM (user identity module) cards during the first half of 2003. SIM cards are used in mobile phones that work on the GSM standard and UIM is the name given to similar cards that work in CDMA handsets. China Unicom, whose subscriber base has grown by 43% in the past 12 months, announced today it now has 54,7 million subscribers on its GSM network and 7 million users of its newer CDMA network.
Security and smartcards
American Express, whose headquarters are across from the site of the destroyed World Trade Centre towers, has stepped up security at its offices using biometrics and smartcards. Employees use contactless smartcards to gain access to the building entrance and must authenticate themselves with chip cards and fingerprint biometrics at high-security doors within the building.
Tesco goes smart with mag stripe
Dione, represented in South Africa by our member computer software consultants, will be rolling out 18 000 new electronic payment devices to Tesco stores. This new credit/debit card reader (IC-Xpress), designed specifically as a low cost solution for integration with the latest multilane retail EPoS systems, has been chosen by Tesco to provide a managed upgrade path to EMV compliance for chip card payments. In their fight against fraud, banks and retailers have committed to the adoption of chip and PIN for all credit and debit card transactions by the end of 2004.
In the multilane retail sector the adoption of chip cards has raised several issues, not least customer interaction and slower transaction times. Retailers have spent millions of pounds speeding up lane throughput and Tesco specifically required a solution that did not impact on gains made in this area. Instead of the normal approach where terminals have both a magnetic stripe reader and front-loading readers for chip cards, IC-Xpress has a single slot. Cards are swiped and the magnetic data is read in the normal way. However, at the end of the swipe slot the card is parked while the data is read off the chip. This new solution has two major benefits for the retailer. Firstly, there is complete transparency to till operators who do not have to distinguish between different cards and therefore maintains existing process at point of sale. Secondly, making the card data from both magnetic stripe and chip available simultaneously significantly reduces transaction times.
Stop under-age smoking smartly
Smokers in Germany who run out of cigarettes might want to make sure to carry their Geldkarte electronic purse cards in their wallets starting in 2007. Separate agreements forged last year between banking groups representing the largest issuers of Geldkarte smartcards and the association of tobacco wholesalers and vending machines in the country will accept Geldkarte by 1 Jan, 2007. The driving force behind the agreements is to discourage underage smokers from purchasing a pack on any given street corner. The Geldkarte chip, which rides on more than 50 million magnetic-stripe debit cards in Germany, will help vending machine operators comply with government mandates to curb sales of tobacco to persons under the age of 16. Starting next year, all new and replacement Geldkarten issued by the Sparkassen-Finanzgruppe, the countries savings banks, and the country's cooperative banks, the Genossenschaftsbanken, will carry a piece of code that will establish the eligibility of the cardholder to buy cigarettes. All vending machines will be equipped with card readers to check the code. Once age-qualified, the consumer will be able to purchase his or her pack either by inserting coins or using the Geldkarte purse.
Smart passports
Starting autumn, 2004, Dutch passports are to be equipped with an electronic chip containing the passport holders' biometric details. The chip's introduction is to coincide with the deadline of a new US law that requires visitors to the US to have passports capable of holding information electronically with distinguishing biometrics such as fingerprints, or facial or iris scans.
New French smart banking cards
Following an international Call for Tender launched by Groupement de Cartes Bancaires CB, Sagem has been selected to develop a new generation of bank cards CB/EMV/DDA, which will provide both superior performance and be better adapted to customers' needs (both cardholders and merchants). The new bankcard will contain an application defined by Groupement de Cartes Bancaires CB in compliance with the EMV international specifications. Its high processing and memory capacity will also allow for other applications such as loyalty, electronic signature and electronic purse to be implemented on the same card. Furthermore, the new chip will contain a cryptoprocessor, which uses Dynamic Data Authentication to make every transaction unique, thus significantly increasing the security of the card payment system.
Smart products
By the time the next November/December holiday season is upon us, a wide range of consumer products will be on sale in packs enhanced by minute computer chips called RFID (radio frequency identification) tags. The tags will carry customisable, scanner-readable data such as product serial numbers or stock codes, enabling retailers and manufacturers to know immediately and precisely what's moving and where. According to analyst Michael Liard of research firm Venture Development, the tags offer a win/win scenario to all concerned. They will dramatically improve inventory operations, thus reducing costs and hopefully, consumer prices.
Stopping cloning of SIMs
According to Prism Group marketing director Steven Sidley, there has been an alarming increase in the cloning of SIMs in the past few years - with advice on how to do the cloning and where to obtain the necessary equipment readily available on the Internet. There is even a website, 'GSM SIM Cloning for Dummies', with step-by-step instructions and chat rooms in which SIM hackers share experiences. The SIMs being cloned use what is known as the COMP128-1 authentication algorithm, which is found in some 50% of the world's SIMs. However, there are now publicly documented attack methods on COMP128-1. These have enabled criminals to easily build systems to illegally clone SIMs and use them on GSM networks. These systems require no more than a PC and smart reader. The Prism SIM family is now available with tools to generate strong keys only, ensuring they remain invulnerable to the publicly documented attack methods. "In addition to including the technology on a SIMterix, Prism is making the technology available as a module to other SIM manufacturers. A provisional patent has been granted to Prism for the technology," Tebbutt concludes.
Another use of smartcards
South Africa's most successful and upmarket brothel, the Ranch, opened in 1987. Owned by ace businessman Andrew Phillips and situated in the smart Johannesburg suburb of Rivonia, it operated six days a week, from 12 pm to 2 am, and included international celebrities, tourists, monied movers and shakers, and top sportsmen in its clientele. It was also a popular and relatively discreet rendezvous in which captains of industry and businessmen simultaneously brokered professional and carnal deals.
As a commercial enterprise, the Ranch was smooth as silk. The entrance fee of R250 entitled patrons to unlimited drinks and food as well as access to the adjoining Titty Twister, a slick strip club. In addition to private rooms furnished with two massage beds, towels and a safe, there were the jacuzzi and sauna areas, restaurant, bar and patios.
Most of all, the Ranch was known for providing the services of some of the most beautiful women in town. And the services were in abundant supply -about 30 prostitutes worked on a single shift (from 12 pm to 7 pm, or from 7 pm to 2 am). With efficiency that was typical of the Ranch, each sex worker was issued with a computerised smartcard, which recorded the number of her clients. It also debited her between R350 and R450 a day for access to the Ranch's security, advertising and management services, as well as food and drinks.
As Bulgarian Eva, (22) recalls it: "The girls and I would sit at one of the bars or tables, and customers would have a few drinks or go directly to the girl of their choice. If a guy requested a 'good time' the girl would go with him to one of the rooms." The cost of a 'good time'? About R400, or R500 if a stint in the Jacuzzi was part of the session. "Then I would enter the payment on my smartcard and the system would credit me," says Eva. "I made about R5000 a week, excluding the levies that I had to pay to management."
Benefits drive the use of smartcards (tags)
Service stations that have implemented a new fleet management system have seen their costs drop and efficiency levels rise. Imperial Truck Centre, Elandsfontein, is one example. Says fleet customer Lettie Naude: "Before implementing the SmartFuel Forecourt system we took about two days to reconcile our fleet accounts; now this process only takes 20 minutes." The Forecourt system boasts a variety of features that allow for a smooth, automated billing and accounting process. The automatic debtor tagging facility allows for an improved flow of traffic on the forecourt, thus increasing overall fleet productivity. Each debtor tag, when tagged to the pump, electronically opens that particular account in the back office. The capturing of the transactions occurs electronically at the pump, thus preventing human error and minimising paperwork.
Gavin Gordon, fleet manager of Volvo Cars Dealer in Boksburg, notes: "This state-of-the-art computer system has really helped us keep complete control of our petrol usage. In fact, we have almost halved our fuel expenses since implementing the Forecourt system."
Colin Gallop of Land Rover East Rand endorses this view. "Since implementing the fuel monitoring system, we have managed to reduce our company fuel bill by R6000 a month."

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