Smartcard briefs

August 2005 Access Control & Identity Management

Smarter smartcards

Despite integrated circuit card technology being available for many years, very few South Africans carry smartcards in their wallets for payment, identification or healthcare transactions.

Some chip-based applications such as social grants disbursement systems have been implemented but they are still highly specialised and proprietary. The same applies to biometric technologies, which have seen tremendous growth in performance, availability and affordability, and yet very few widespread systems are in place. If those technologies address so many business and security requirements for transacting, why are they not more present in our everyday life?

The answer used to lie for a big part in the lack of standards.

Interoperability is the keyword, and standardisation initiatives such as ISO's BioAPI, Visa and MasterCard's EMV chip cards or ICAO's (International Civil Aviation Organisation) biometric passports are unlocking the potential for full-scale chip and biometric implementations. When Visa and MasterCard have enforced the use of smartcard technology in the payment world, they have incidentally made other chip-based business cases viable in the field of multi-application (eg, loyalty, authentication).

We can expect a similar effect from the ICAO move to enforce biometrically enabled travel documents. Standards are generally recognised as a key factor to the long-term success of the biometrics market, and have become a strategic business issue.

Biometrics and smartcard vendors have to provide increased flexibility, time to market and ease of use while decreasing total cost of ownership. Also, the rapid convergence of wireless communications and financial transactions must be seen as a background to any widescale biometric implementation. If the smart card/fingerprint biometric pair (often referred to as 'smarter cards') is currently seen as a perfect match for secure transacting, a careful watch must be kept on other leading and emerging technologies.

Technologies such as facial print scanning, voice or signature verification biometrics, digital rights management, cellular or near field communications as well as personal security modules, might converge faster than expected in the close future, on the back of mature interoperability standards and legal frameworks.

Source: Namitech

A first for security certification in Africa

Prism Holdings is the first company in Africa to achieve the international security certification, FIPS 140-2 for its Incognito TSM410 (transaction security module). The module is a tamper-resistant, cryptographic security device that offers high-performance, high-security services used in electronic funds transfer (EFT) switches and other top-end transaction processing arenas. The FIPS (Federal Information Processing Standards) 140-2 certification, a requirement for entry into several markets including the US and Europe, places Prism within an exclusive group of the world's top security module suppliers and overcomes a barrier of acceptance that historically has faced products of African origin. "Achieving this certification offers our customers in various sectors, from retail and banking to telecommunications the assurance that they can use our product with confidence," says Wayne Donnelly, Crypto product manager at Prism.

International credibility for contactless retail payments

There is a trend in retail to simplify transactions by allowing customers to wave identifying devices over a reader and have the amounts deducted automatically from their accounts. This is primarily thanks to crucial developments announced recently by Chase Manhattan of JP Morgan Chase & Co, the world's largest issuer of credit cards and 7-Eleven Inc, the world's largest convenience store chain, with some 27 100 stores worldwide. Together, the two announcements add legitimacy and stability to the approach. Chase is not the only financial-services company pressing for contactless payment. MasterCard International, Visa International Service Association, and American Express Co - as well as some smaller credit card issuers - are aggressively pursuing contactless card strategies.

7-Eleven has been pushing RFID for everything from backroom operations to managing temperature control for milk. The trials at 7-Eleven were promising, but what made the contactless move inevitable to 7-Eleven's CIO Keith Morrow, he said, was a trip last December to Tokyo, where he visited some of the chain's 11 000 stores in Japan. That is roughly twice the number of 7-Elevens that exist in the United States. Contactless payment in Japan was almost nonexistent one year earlier, but by December 2004, Morrow said, he saw it as a very popular and accepted form of payment everywhere from small retail operations to mass transit. "We sell convenience, we sell speed," he said.

Jupiter Research estimates that proximity payments will represent only 2,8% of all retail transactions in 2009. "A lot depends on whether card issuers and payment networks get behind the technology and subsidise its adoption by replacing cards and (adapting) POS (readers) ahead of their normal replacement cycle and market the benefits to consumers as well," said David Schatsky, a Jupiter research senior vice president.

Contactless solutions are available

American Express recently announced the rollout of its ExpressPay RFID (contactless) payment system, based on RFID enabled tokens and credit cards in the USA. It is already operational in 485 CVS stores and plans are to roll out to more than 5300 stores countrywide by mid-2005. Texas Instruments is to supply the RFID chips, which are fully ISO/IEC 14443-compliant and offer the high security required for financial transactions. Arrow Altech Distribution represents Texas Instruments in South Africa.

First to take EMV technology into Africa

Namitech has secured a contract for the supply of EMV compliant bankcards into the Republic of Rwanda. The contract is significant for NamITech as it is the first EMV deal outside of South Africa for the company and is ground breaking in terms of the deployment of EMV technology into Africa. The contract is with Simtel, a consortium of seven banks that has been established by the Rwandan government to modernise the country's national payments network. The first phase of the product will comprise debit cards limited to domestic transactions. Plans are underway to expand the solution to foreign transactions by year-end.

EPC GEN 2 RFID system currently in use

The German retailer, Metro Group, and Intermec Technologies, successfully demonstrated an interoperable EPC Generation 2 RFID system at the '2005 ECR Europe Conference and Marketplace'. During a keynote presentation, an RFID-tagged pallet of RFID-tagged cases was pushed through a portal, simulating a typical supply chain application.

"Generation 2 RFID is here now," said Dr Gerd Wolfram, executive project manager for the Metro Group's Future Store Initiative. "We wanted to ensure that our existing RFID systems would seamlessly migrate forward to the ISO-based Gen 2 solution." The demonstration of the interoperable power of Generation 2 follows the first successful use of an EPC Generation 2 RFID system at Metro Group's RFID Innovation Centre in Neuss, Germany, in April 2005. The next step will be to equip Metro's RFID Innovation Centre with Gen 2 technology to test system performance. The companies also plan to update Metro's Future Store supply chain with Gen 2 capabilities.

"The demonstration of Gen 2 tags from two chip providers being read by an Intermec IF5 reader, in production since September 2004, is a significant step forward," said Intermec's vice president Scott Medford, who represented Intermec at ECR. "It dispels the myth that Gen 2 is somewhere in the distant future. It proves that properly designed products can be deployed and then upgraded via software to accommodate new features, standards or regulations. And it clearly demonstrates that several technology companies can work together to create interoperable products that comply with international standards in order to satisfy the requirements of a global economy."

By the end of 2005, more than 100 Metro Group suppliers are expected to migrate to Generation 2 RFID technology for improved asset tracking and inventory control. METRO Group, which has 2300 stores in 30 countries around the world, launched its first RFID pilot project in November 2004 and - so far - more than 100 000 pallets have already been read using Metro's current RFID system.

RFID tag identifies Lear Jet on 300 kph take-off

It is true - this may be the fastest and biggest item to ever go through a supermarket-standard RFID scanner. A company was asked to quote for an electronic licensing system for motor vehicles in the Middle East. The specifications required that the system would detect motor vehicles at over 300 kph. Well, with most countries having speed limits restricting vehicles to 120 kph, they could not find a legal test track. So they strapped the RFID tag to the undercarriage of a Lear Jet, and tied the antenna and reader to the restrictor loops at the end of a runway, then successfully identified the 9000 kg jet as it took off. To verify that the transponder was correctly identified, the data from the reader was processed by a laptop, which triggered a camera only after the transponder code was recognised - and the picture was just fine. Moving objects can be detected up to Mach 2 but, because the transponder has to come within metres of the reader at the time of reading, that limit is likely to remain untested for quite some time.

One-inch RFID adhesive labels launched

Following a successful market launch in the USA, one-inch self-adhesive RFID labels are now launching in Europe, providing the ability to tag small items that are not traditionally easy to tag. In launching the one-inch (2,54 cm) label, on offer is the option of labelling smaller packages for which standard-use labels (up to 15 cm long) would be considered an eyesore. According to the USA trade magazine, Managing Automation, these labels "can be placed in optimum location on any size carton for best read rates". The label, which carries an integrated RFID tag and antenna, was introduced to the USA market at the end of 2004 in the American 915 MHz specification, and has since proven popular with users such as retail giant Wal-Mart. The label has been re-engineered to meet the European 868 MHz specification, and is available for immediate shipment using the Philips U-Code 1.19 chip. During the development of the one-inch label, the biggest technical challenge was to ensure that the RFID units located less than two centimetres apart on the label roll did not interfere with each other. The labels are processed with the Paxar 9855 RFID system. This stationary RFID bar code printer works with thermal transfer or thermal direct bar code labels, and also writes to RFID tags embedded in the labels. The system also tests the functionality of each label so that incorrect tagging is eliminated.

In April 2004, Paxar began series production of RFID printers. Since then, the company has also launched a solution for mobile RFID pallet labelling (with the NVE-2-EPC Starter Kit) that can be integrated with existing processes and also meets the Metro Group's requirements. Paxar is a partner in the Metro Group's Future Store Initiative, and is providing 53 Marks & Spencer stores with RFID technology by 2006 in the UK.

RFID mobile asset management

RedPrairie has announced a new partnership with UK telecom spin-off BT Auto ID Services to offer RFID enabled Mobile Asset Management as a fully managed service. Many businesses operate fleets of high-value mobile assets such as totes, roll-cages, trailers, beer kegs and medical equipment.

Businesses often waste time and resources searching for assets and carry unnecessary 'buffer stocks' to address typical annual losses of 10-40% each year. But by attaching RFID tags to these assets and placing RFID readers that are connected to the Internet in fixed locations in the company's physical environment, RedPrairie's simple web-based tracking system pin-points assets instantly. Alerts can also be set up to highlight critical events such as assets not being returned to base or not being serviced at the right time.

Several SCSSA/Afritag members have this technology available right here in South Africa - contact us for their details.

RFID to combat counterfeit drugs

Two USA companies have teamed up to implement a strategy to battle drug counterfeiting and boost pharmaceutical supply chain security, by offering an integrated security solution for the pharmaceutical market's first authenticated RFID platform, through the integration of electronic and physical security.

1 billion-plus SIM cards

Eurosmart, the association of European smartcard suppliers has released its new projections for 2005: They predicted shipments of 1249 million SIM cards to wireless carriers in 2004 and actually shipped 1469 million which prompted them to increase their 2005 projection to 1727 million units!

South African 2005 budget allocation for Hanis (home affairs national identity system)

The back record conversion (BRC) process would cost R132 million in 2005, while R44,4 million has been allocated to the electronic document management system (EDM) and R270 million to the Smart ID Card project. In addition, the redesign of the population register will be at a cost of R15,2 million, while the rewrite of the Movement Control system has an allocation of R72,2 million. R1,8 billion has been budgeted for the project over the next five years.

SAPS uses biometrics successfully

The South African Police Services has claimed large-scale success with the biometrics-based MorphoTouch device since its implementation in November 2003. SAPS spokesman Captain Percy Morokane says the device had been rolled out across all nine provinces in the country, with 340 units available for 'operational deployment'. They are given to any relevant SAPS unit on request. The MorphoTouch is a handheld portable device that enables police to check for outstanding warrants of arrest of a person who is apprehended or questioned. Biometrics.co.za director Bryan Kimmel points out that SAPS's success rate has been 'phenomenal' since the introduction of the MorphoTouch. "Nine out of 10 times the same criminal is wanted for other crimes, which can now be detected on the spot," he comments, adding that other law enforcement agencies are also looking at employing the MorphoTouch. Kimmel says the MorphoTouch device and its software can also be used for applications other than crime fighting, including time and access control systems for remote sites where there are no computers.

A press release from the SABS

Automation, accuracy and cost-savings are three compelling benefits driving businesses overseas to adopt radio frequency identification (RFID) in their supply chain management operations. RFID delivers what the bar code cannot. It provides realtime information on the precise location and status of goods in a process flow or logistics chain. The result is lower labour costs, greater efficiency and major reductions in shrinkage - in short, a huge competitive advantage. Market leaders such as major retailers overseas (such as Tesco, Marks and Spencers and Wal-Mart) know this, so they are mandating RFID throughout their supply chains. And with suitable solutions from experienced service providers, smaller companies can benefit from RFID as well.

Already significant overseas, RFID's cost and efficiency will become even greater as the technology continues to evolve. A key part of this evolution is the creation of international standards that enable interoperability and large-scale implementations. It is a task that calls for worldwide cooperation among the industry's leaders.

"This is why the South African Bureau of Standards (SABS) has formed a new technical committee (SC 71K, Automatic identification and data capture techniques)," said Bertus Pretorius, chair of SC 71K. "South Africa, through its membership of the international committee, has a say in influencing the text of new international standards in this area. However, if all local stakeholders do not join us, South Africa will be relegated to be a follower of the First World with the associated economical consequences. The reality is that it is South African technology breakthroughs which placed UHF RFID on the world agenda when the CSIR developed the SuperTag technologies in the early 1990s."

RFID Europe 2005

The European Commission (EC) is hosting a workshop at RFID Europe 2005 in Frankfurt on 27 and 28 October to let attendees know how to access the several tens of billions of Euros that the EC has made available to Eastern European companies to improve their supply chain and manufacturing processes through the implementation of new technologies, particularly RFID.

Philips to provide RFID chip for German passports

The German passport printing authority, the Bundesdruckerei GmbH, has selected (on behalf of German Ministry of Interior) a contactless smartcard chip from Royal Philips Electronics, for use in the country's smart passports. The secure chip will be used to hold personal information about the passport holder, thus reducing fraud and forgery of travel documents and increasing security for travellers. Driven largely by the USA's visa waiver programme, which requires visitors to the country to present a machine-readable passport when visiting the country for less than 90 days, governments around the world are implementing smart passports. Philips says it is working with a number of governments worldwide to develop solutions designed around current and future security needs.

The Philips chip used in the project has been certified by the German Federal Office of Information - the central IT security service provider for the German government. It has received the organisation's Common Criteria EAL5+ certification, and exceeds the specifications for smart passports set by the International Civil Aviation Organisation (ICAO). As the system provider for the project, Philips is working with various partners including Sokymat GmbH and T-Systems (also a SCSSA member). The chip features Philips' unique ultra low power handshaking technology, and meets the ISO/IEC14443 standard power range requirements. Having manufactured over 400 million contactless smart card chip modules to date, Philips offers its flat MOB4 chip package for smart passports in high volumes. The chip's 72 Kbyte EEPROM memory was designed to fulfil the needs of e-government projects, having the ability to hold biometric information such as fingerprints and facial images.

Fob off fuel payments

Shell Canada has chosen to use an in-store contactless payment programme. ViVOpay's Dynamic Strip 1000 interface technology delivers a simplified and seamless upgrade to Shell Canada's point of sale (POS) systems, with no POS changes and very few host changes. The solution also provides Shell Canada with lower implementation costs as it expands its easyPAY system across Canada. Based on RFID technology, the easyPAY system allows Shell Canada customers to pay by waving their easyPAY key fob in front of the in-store ViVOpay terminal, and the POS system automatically transmits the tag information to Shell Canada's host computer. For security, neither the customer's personal data or credit card information is stored on the key fob's chip. The easyPAY programme also offers Air Miles for qualifying purchases.

Smartcards lead RFID tag consumption

The biggest contributor to RFID tag consumption in 2005, according to research firm IDTechEx, will be smartcards and payment key fobs. Bus and subway system access around the world is helping drive the demand, as are national ID card programs - the Chinese initiative to issue national ID cards to every adult has been pushed forward from 2010 to 2008, just in time for the Beijing Olympics. Also, the increasing deployments of contactless credit cards by major players Visa and MasterCard will have a major near-term impact on the amount of RFID tags demanded worldwide. New conclusions suggest that the market for RFID may currently be very different than what is assumed by many in the industry - tagging of cases and pallets for supply chain visibility remains a surprisingly small contributor to the overall consumption of RFID tags. Other less widely reported situations will continue to be leading drivers of demand for RFID technology, claims IDTechEx.





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