Executive Director’s Letter

Dear members and friends of the Alliance,

December is always a good time for me to reflect on the events of the past year and to look at where we began and ended the year. As I pause to look back over 2009, it seems impossible that another year has gone by already. To find some perspective, I pulled out my December 2008 newsletter interview to see how my predictions for 2009 turned out.

This time last year we were dealing with the early stages of the financial crisis and the uncertainty of how the economic recession was going to affect the smart card market and the country as a whole. My optimism for a steady smart card market, in spite of the daunting national challenges we faced in the first quarter of 2009, proved to be on target. True, we lost some member organizations due to drastic cuts in discretionary marketing budgets, and I know a few good smart card professionals who felt the pain of layoffs and reorganization. But the primary business segments–financial and government–remained committed to existing smart card projects and actually issued more smart cards in 2009 than predicted. As cited in the 2008 interview, the diversity of the global smart card industry allowed the industry to grow by nearly 10% and the contactless smart card segment grew by more than 25%. In the U.S., the contactless payment card industry has grown to an estimated 75 million credit and debit cards and the Office of Management and Budget reported that the Federal government has issued over 4 million HSPD-12 credentials, or 71% of the ID card population. I will admit that, at this point last year, I did not believe that either industry would perform so strongly in 2009. Unfortunately, my predictions that NFC-enabled mobile phones would be delayed until 2010 or 2011 also proved to be accurate, and it doesn’t look promising that NFC add-ons–like contactless stickers and secure memory cards–are going to provide the bridge that makes widespread mobile payments happen sooner.

Member Profile

Gemalto – Interview with Paul Beverly, President, Gemalto North America

This month Smart Card Talk spoke with Paul Beverly, President, Gemalto North America. Paul Beverly began his career as a Marketing Manager within the Schlumberger group. Over the course of his 19 years within Schlumberger, he held various management positions in operations, marketing and sales in North America and in France. From 1999 to 2003, he was Vice-President in Test & Transactions for Schlumberger in North America, while also serving as Chair of the Smart Card Alliance. He was President of the Americas from April 2003 until June 2006.

Paul Beverly holds Business and Economics degrees from Auburn University and the Management Program at Harvard University.

Feature of the Month

Fraud in the U.S. Payments Industry: Chip Card Technology Impact on Fraud

The payment card industry has been subjected to fraud losses for as long as cards have been in general use. However, acquirers and issuers are currently taking a closer look at the issue of fraud, as they begin to recognize that the cost of fraud is higher than the actual dollar amount of losses. Acquirers and issuers understand that losses affect card usage rates, authorization parameters, operational processes, and staffing while also decreasing profit margins. Furthermore, these losses can endanger the most valuable asset acquirers and issuers have–their relationships with business partners and consumers.

It follows that the industry should give serious consideration to new technologies and processes that may prove to be effective in combating fraud. Chip-based payment is one of those technologies. It would move the industry away from reliance in many markets (the U.S. market in particular) on magnetic stripe technology and its limitations. In addition, contactless payment introduces new processes that can move the industry from a reactive, loss identification and remediation mentality to a proactive posture of loss prevention.

New CSCIP Accreditations

Congratulations to the first group of LEAP members who have successfully completed the requirements for professional accreditation as Certified Smart Card Industry Professionals.
	Deborah Baxley, Keypoint Edgar Betts, Smart Card Alliance Dana Blegen, Paragon Application Systems John Fessler, Exponent, Inc. Dale Grogan, LifeMed Card, Inc. Bryan Ichikawa, Unisys Brad McGoran, Exponent, Inc. John McKeon, IBM Barry Mosteller, Oberthur Technologies Ken Pantin, The Bank of New York Mellon Neville Pattinson, Gemalto Myles Roberts, FAA Michael H. Smith, Montner & Associates, Inc.
Click here for more information about LEAP and CSCIP certification program.