Smart Cards

EMV Compliance Smartcard for Australasian Banks and their co-branded merchants

INTRODUCTION

With the use of smart cards predicted to grow in the Asia Pacific Region over the next years,   SME-Centers Australia (ASME) have established links amongst smart card technology suppliers and users in the region. We add value at the interface between advanced technologies and their incorporation as an effective resource in the engineering and innovation processes of the information technology industry and society. Our vision of enhancing wealth creation by assisting Australasian enterprises to make effective use of advanced engineering, such as e-commerce solution, ASME is increasingly focused on the "engineering process" in which technology is integrated with management, design and market. With our current projects, conferences, workshops and continuous R&D identify issues, derive strategies and recommendations, and then initiate the actions needed for their implementation.

OUR VISION

We will assist to accelerate the widespread acceptance of smart card technology in the Asia Pacific region through system integration, supporting information sharing, and communication amongst smart card technology suppliers and users in the region, and maximizing the market opportunities for the industry.

In this role particularly as Project Facilitator, with the help from Australian Government support, ASME will maximize the opportunities for communication, information sharing and alliances in this new and expanding industry.

THE OPPORTUNITIES

ASIA PACIFIC REGIONS

Smart Card Technology has come to play a vital role in banking, telecommunications, retail marketing, transportation, healthcare insurance and many other applications.

This technology has brought with it a new opportunities for organizations with a vision and foresight for developing a better, more productive and profitable future.

The significant growth in Asian wealth brings about the rise of the powerful middle class, has resulted in higher incomes and a dramatic increase in consumers' spending power. This increasing affluence has made a tremendous impact on the growth of the card business. The most daring and significant adoption of smartcard in Indonesia was by Bank Rakyat Indonesia which was then called SmartBRI.  In 2003, BRI and SME-CENTER consortium and Gembas Technologies Indonesia (GTI) took another bold move in developing smartcard applications for the bank's SME-CENTER members. In preparation for the EMV compliance, BRIngin General Insurance is taking the lead role in utilizing the EMV compliance requirement as a way forward to provide a truly secure transaction platform for its substantial client base. This time we have the vast experience in smartcard technologies, particular in software applications after having implemented Bank Central Asia's EFTPOS applications with Intellect Australia.  GTI learned the hard lesson of developing application based on one single hardware vendor. Today, GTI seeks to cooperate with independent vendors with the view of developing multi-applications across various hardware platforms.

OUR CHALLENGES

Perhaps the vital questions need to be asked before embarking any new project, especially IT, in particular smartcard project, such as;

1. Do you want to be the market leader in your industry?
2. Do have the internal technical resources?
3. How do you ensure that vendors' product specifications are not obsolete within a short time?
4. Or more importantly, how do you know if the vendors' product specifications are not proprietary which renders incompatibility?
5. What happens if the card volume demand increases, how do you deal with;
   
   • card management,
   • card personalization
   • database administration,
   • marketing with global trends as a guide to growth with proper CRM strategy in mind
   • risk management, of your magnetic and smartcards will become increasingly sophisticated.
6. Technical issues such as security and sophisticated system applications will therefore be your main concern. Are you or will your organization be ready to handle such challenges?
   
   Are you aware of: ?
   
   • the potential card fraud and counterfeiting
   • the design of IC card systems to minimize risk
   • proper management, personnel and network procedures to support IC card security
   • security features for associated card readers/writers, POS terminals , PIN pads and associated application systems
   • the expectation from manufacturers of cards and associated systems.
   • what to do in case of fraud detection  e.g. security action plan

OUR APPROACH

COORDINATING STANDARDIZATION

We will provide an accurate update on international technical standards such as EMV Compliance relating to

1. integrated circuits contact & contact-less)
2. Electronic Purse (Stored Value Cards) and the issues surrounding them e.g. electronic financial transactions, banking regulations, privacy and security issues, the selection card acceptor devices as well their compatibility with other ICC based applications.
3. EMV Compliance requirement for both hardware and software

SMART CARD APPLICATION OF THE FUTURE

1. multi-application in financial ; banking applications
2. security in the smart card applications such as encryption fingerprint algorithm to be stored in smart card all security applications.

We have the needs for such applications for our members within the Asia Pacific regions.

HISTORICAL BACKGROUND

The introduction of smartcards into the BRI+TELKOM+KADIN+ICT consortium was actually first proposed by PT Telkom in 2001. At the time PT Telkom was testing Samsung smartcards.

GTI was then requested by the BRI+TELKOM+KADIN+ICT consortium to develop full e-commerce solution. Subsequently, GTI managed to design and develop authentication software using Global Platform smartcards. Consequently the push is then for smartcard based on global platform. Simultaneously EMV issued warnings regarding fraud liability switch to all banks in the world, giving them until January1, 2009 to comply.

Of course the EMV compliance generated enormous concern to the Indonesian banks, just like the year 2000 compliance did. GTI  was asked to ensure that it's banking applications such as debit/credit and electronic purse might as well be EMV compliance in order to be allowed for use by BRI+TELKOM+KADIN+ICT CONSORTIUM.

A series of meetings conducted independently between BRI+TELKOM+KADIN+ICT and VISA, MasterCard amounted to more delays since a common perception and confirmation on the alternative use of EMV accepted platforms; i.e. Generic and Global Platforms.

Finally the SME-CENTER Consortium took the proactive role in implementing a pilot project to ensure that SME-CENTER Debit/Credit smartcards can be used by card-holders as means of personal identification and secure payment mechanism.