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November 2005 • Volume 10 Number 11 |
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Executive Director's Letter Dear members and friends of the Alliance: As quickly as you can say "frost on my pumpkin!," the fall season has arrived and that means the onset of the holidays are nearly upon us. That is good news if you think of it in terms of family gatherings and holiday parties, but it is also bad news if you are trying to compress the next 6 weeks of Smart Card Alliance activity into about 3 weeks of time. So much for having some downtime after the completion of our successful October Annual Conference in Miami! I will focus my comments on what is already behind us rather than talking about what lies ahead for a change. Last week, I was in Paris attending the Cartes Conference, which is always the highlight of the fall season for me. I can report firsthand that the images of Paris and its suburbs on fire and under siege by protests were nowhere to be found and, unlike many of the visitors from the U.S. and China who changed their hotel locations and transportation to avoid potential problems, the French citizens were going about their business with little or no concern. It certainly did not have an impact on the crowds walking the exhibition halls. The exhibits were flooded with people - so much so that it was difficult to get close enough to see what was on display in the booths of the smart card companies, chip manufacturers, and especially the POS terminal vendors. Cartes had created an ID security pavilion and had some success in reaching out to the security and identity markets. However, payment still is the dominant business in Europe. Contactless technology and products were showcased throughout the card, terminal, and financial services exhibits. Some of the most interesting demos I saw involved NFC-enabled solutions, showing the potential use of mobile handsets equipped with contactless technology that allows the phone to operate as a reader, a payment device, and a data port for peer-to-peer communication. The people I spoke with are very excited about the U.S. market for NFC since the technology is compatible with the more than 100,000 ISO/IEC 14443 contactless POS terminals being installed throughout the country as part of the contactless payments roll-out. Wouldn't it be interesting if a technology born and developed in Japan (Sony), the Netherlands (Philips), and Finland (Nokia) would take root in North America first?
Prior to joining MasterCard International, Dr. Merschen was head of Citigroup's Global Competence Center for chip card-enabled solutions, mobile financial services, PKI, and biometrics. As vice president and director of emerging technologies, he was the single point of contact within Citigroup for deploying business solutions based on emerging e-business technologies. Most recently, he managed the technical implementation of Citibank's U.S. consumer smart card program. He defined and deployed their strategy for mobile and alternative distribution channels for financial services delivery. Dr. Merschen also represented Citigroup on the Board of Directors of the GlobalPlatform consortium. Prior to Citibank, Dr. Merschen had numerous engineering, development and marketing responsibilities within IBM over a 14-year period, with assignments in Germany, the UK and New York. In his most recent position at IBM, he had worldwide responsibility for their research & development activities and strategic alliances for smart card technology and solutions . Dr. Merschen holds a Ph.D. and Masters degree in mathematics and physics from the Technical University of Aachen, Germany. 1. What are MasterCard's main smart card initiatives? MasterCard and many of its customer financial institutions view EMV chip cards as the next generation technology platform for card based payments. MasterCard enables the EMV chip based payment products, network infrastructure and implementation services to help its customers migrate from magnetic stripe to chip technology. Complementary to the basic payment functions, the MasterCard OneSmart™ suite of value-added solutions provides a series of options and multi-application packages enabling financial institutions to create innovative offerings for their cardholders.
The What, Who and Why of Contactless Payments The mass market introduction of contactless technology is an important event for the payments industry. Contactless payments are already providing benefits to consumers and retailers alike, in terms of higher levels of control and convenience for consumers and higher throughput for retailers. And these benefits are just the tip of the iceberg. This article describes the key changes associated with the use of contactless payments in North America, including the additional value such payments can provide to issuers, acquirers/processors, independent sales organizations (ISOs), retailers, and consumers. This paper is also intended to facilitate communications among the various industry stakeholders by describing current market activities and standardizing definitions key to understanding contactless payments. All stakeholders benefit from a clear understanding of how contactless payments deliver new benefits while also leveraging the reliability and trustworthiness of current payment systems. This year, the launch of contactless payments across North America has begun in earnest. Leading banks are issuing millions of contactless credit and debit cards to consumers, and leading retailers are installing contactless readers that can accept contactless payment and are integrated with point-of-sale (POS) systems. The rate of deployment of contactless infrastructure is the highest ever observed for emerging payments products and technology in recent memory and speaks of a unique market momentum for the industry. This year marks the beginning of contactless payment adoption in the U.S., a process that requires consumers to understand how to use the technology and requires everyone involved to understand its value and relationship to the existing payments infrastructure.
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This month Smart Card Talk spoke with Dr. Toni Merschen, Head of MasterCard International's Chip Center of Excellence, based in Waterloo, Belgium. Dr. Merschen oversees all business, product, and deployment aspects of chip-based solutions for MasterCard's Global Advanced Payments Solutions. This includes the management of the Center of Excellence, which represents extensive and unique expertise in chip business and technology, spread across locations in Belgium, the UK, and the US. The Center assists MasterCard's Customer Group in all Regions to provide recognized industry leadership and support to our customers in chip programs and services. Dr. Merschen is also responsible for developing, coordinating and executing MasterCard's chip strategy and tactics on a global basis .
Executive
Director's Letter
