Smart Card Talk

August 2005 • Volume 10 Number 8

Executive Director's Letter

Dear members and friends of the Alliance:

August is all about PLANNING. For some lucky people, this is a time for rest and relaxation, with vacation breaks and lots of outdoor activities - that is, if you can stand the heat and humidity depending on where you live. But for the board of directors of the Alliance and me, this wasn't the time to relax. There are numerous reasons for this. On the immediate horizon is the upcoming 2005 Fall Annual Conference on October 11-14 to prepare for. Looking beyond that, the fiscal year for the Smart Card Alliance ends in August and developing the foundation for a business plan and strategic directions for the organization that will carry us through the next twelve months begins now. Lastly, finding time on everyone's calendar during the rest of the year makes planning during the summer months the logical choice.

Since a great deal of my attention, as well the interest of our readers, is on the upcoming conference, let me begin there. The theme for this year's Smart Card Alliance 2005 Fall Annual Conference is "Smart Cards: The User and Issuer Experience." We've added a fourth day to this year's event and expanded our geographic focus to include both North America and Latin America. We are expecting speakers from the banking, public transportation, government ID, healthcare, and mobile telecom markets in Brazil, Mexico, and the Caribbean countries to join speakers from these same segments in the U.S. and Canadian markets to present how smart cards are being issued and used. Our new industry councils for physical access, transportation, healthcare, and contactless payments are already actively engaged in projects and will be contributing to the program. In addition, we will be providing meeting space for these groups to hold face-to-face meetings during the week. We are replacing last year's technology exchange with an international Information Exchange and reception on Thursday. This exchange is open to organizations from all regions that wish to reserve a table during this special one-day event to share information about their company, products and services. Our Latin America Chapter, led by its 10 new Foundation Members, will also be gathering for the first time to discuss the chapter's future activities. Several networking receptions, an awards luncheon, an Educational Institute workshop, and birds-of-a-feather discussion groups are some of the added highlights for this year's conference. Email invitations have been distributed to all Alliance newsletter subscribers and the automated event information and registration system is waiting for you to respond. Visit it NOW and register TODAY! A full agenda will be posted soon. Keep checking back for additional agenda and speaker updates in the coming weeks. If you did not receive an invitation to register for the annual conference, request one at events@smartcardalliance.org.

October is also when we honor the outstanding individual and issuing and supplier organizations for their contributions to the North American smart card industry with our Outstanding Smart Card Achievement (OSCA) awards. You can read about the OSCA's eligibility requirements and download the application by visiting the OSCA Awards link on the Smart Card Alliance web site. Applications must be received by September 16. We will announce the winners of the 2005 OSCA awards at the Annual Conference awards luncheon on October 12.

Another highlight of the August planning season was marked by the gathering of the board of directors for a two day meeting on August 9-10. It is important for the health and prosperity of the Alliance for the leadership to communicate as a group as we look back at the results of the past year and look forward to our upcoming fiscal year. As an added bonus, a board gathering is also an excuse to get together as a social unit. Many of us have worked together in the smart card industry or at the board level of the Alliance for at least three years and, for some multi-term members, for six or more years. We can have a few laughs, mix in some old war stories, and still cover the serious business that we have been entrusted to do. Having the collective experience and leadership of our board together in one place to chart the direction, and in some cases, alter the course of the Alliance has resulted in many of the positive changes that have occurred.

I will give you an insider's look at some of the information that I presented to the board about this year's accomplishments. I shared an Alliance membership report that included a list of 36 new members and only 10 non-renewals for the year to date, a net growth of 25% for the year. I came equipped with an interim report of our 2005 member survey, which runs until September 1, to quantify and share the input from our member community so far. I was particularly pleased to report that the overall satisfaction rating so far by our members was an 87 out of 100, which measured high on the scale of "Satisfied - with membership value clearly present." The high satisfaction rating reflects the long list of deliverables that have been completed by our two well-established task forces, our fledgling industry councils and technology task force, our past conference events, webinars, and educational workshops, and our market outreach and industry conference participation in the US and internationally. In addition, the survey has provided some great input from our membership about what we can do to improve the Alliance and keep abreast of new opportunities and challenges ahead.

One of the significant discussions at the board planning meeting in 2004 was the creation of the Smart Card Alliance Latin America Chapter. After only the first month of operation, 7 out of 10 Foundation Member seats have already been filled. Our new Foundation Members are Oberthur Card Systems (Brazil), Rede Ponto Certo (Brazil), Visa International (Miami for Latin America), ASK (France), Axalto (Latin America), Daruma Orga Card Systems (Brazil), and Identification Technology Group - ITG (California). Many other organizations are planning to join the group once they complete the internal approval process which has been affected by the normal summer slowdown. With ongoing support from the U.S. Department of Commerce, Commercial Services Division and International Trade Administration to support our MDCP grant, the first three quarters of our year one plan are complete and the Alliance organization is ahead of schedule. The benefits to the rest of the Alliance membership will start to be realized at the Annual Conference in October when attendees will have an opportunity to meet and hear from many of these Latin American smart card leaders about the emerging markets and business opportunities that exist in the region, and the chapter members start to work together as a group.

Shifting back to the U.S. market and contactless payments to conclude, the bandwagon for the contactless payments trend picked up some additional supporters this month with two additional issuers announcing rollouts, each with a slightly different approach than the previous announcements by Chase and American Express. Keybank of Cleveland, Ohio, announced that they will be the first bank in the country to issue MasterCard PayPass contactless technology on a debit card. Beginning September 1, all existing debit cards will be replaced and all new checking account customers will receive a PayPass-enabled debit card. Then just last week, Meijer Stores, a grocery and general merchandise retailer in Michigan, announced that it will begin accepting PayPass contactless credit cards in all of its stores and announced the availability of a Meijer's Platinum MasterCard, a private label credit card to be issued by GE Consumer Finance. Meijers joins McDonald's, CVS, 7-Eleven and other major retail chains in the area now accepting contactless payment cards. By adding a debit card issuer and a private label credit card linked with a major super center chain, the contactless movement has spread to two new financial product areas - showing that it has broad appeal across all financial service products. The feature article in this month's newsletter is about contactless payments in the U.S. There is more room on the bandwagon if anyone wants to jump on!

Enjoy what time you have left this summer and here's to a prosperous fall. Cheers!

Randy Vanderhoof, Executive Director