EVERLINK PAYMENT SERVICES INC.

Why Chip?

The payments industry is experiencing a global evolution. On behalf of CGI Services to Credit Unions, I spoke to industry experts Louis Davis, Director of Product Management, and Peter Kalogiannides, Vice President of Relationship Management, Sales, and Marketing at Everlink Payment Services, Inc. about the latest innovation affecting the payments environment.

CGI: Gentlemen, Thank you for taking the time to lend your expert opinion towards the latest and greatest innovation in the payments industry – Chip Technology.

PK: You’re most welcome Kevin. Before we begin, I would like to take this time to say that our team at Everlink is delighted to be selected by CGI to continue the provision of Switching and ATM Driving services to your credit unions beyond our current agreement of April 30, 2009. As the incumbent service provider, we are particularly proud to have again earned the confidence of CGI, and we are excited to work with you in developing EMV/ Chip capabilities, as well as exploring opportunities in expanded payments services offerings such as Enhanced ATM Management Services (AMS), Mobile Banking, Fraud Management and Prepaid, Loyalty and Gift Card Services.

CGI: While we have had discussions with Everlink and our clients at various meetings and conferences, could you please explain EMV and Chip Technology in general terms?

LD: EMV, which is sometimes associated with Smart or Chip technology, is an acronym which refers to Europay International-MasterCard International-Visa International. EMV relates to the technical specifications for how chip cards communicate with merchant terminals and ATMs. EMV is the common global operating standard and has been adopted by the electronic payment industry in Canada. Having a single standard ensures chip cards, terminals and other systems can communicate and will be interoperable all over the world.

A Chip card, sometimes referred to as a “smart card,” is a credit or debit card containing an embedded computer chip, enabling the card to make independent decisions, hold and update data securely, and approve or decline transactions.

Chip cards and chip terminals work together to ensure a highly secure transaction by validating the card and the cardholder. Once the chip card is inserted into a chip terminal, it is left there for the duration of the transaction which prompts the debit AND credit card holder to enter a PIN number. CGI: What are the benefits of the chip card to consumers?

PK: There are three primary benefits that financial institutions and consumers will realize in adopting chip technology:

1. Mitigating Fraud
2. Enjoying a greater sense of confidence in the payment infrastructure
3. Additional functionality that chip technology will provide

From a network perspective, financial institution brands will also be more preserved since chip cards provide the opportunity to promote a more secure transaction environment.

LD: Further to Peter’s point, consumers have a lot to gain from the migration to chip technology in the areas of Security and Multi-Application:

1. Security – As chip cards are very difficult to copy, they provide additional protection to avoid disclosure of personal information
2. Multi-application – Chip cards provide for greater speed and convenience at the point of sale as well as the addition of non-payment applications in the future. The potential of chip cards lie in multi-application cards carrying a series of applications from banks and their partners that can be tailored to suit specific groups of customers. Over time, chip cards could be used for:
   1. A choice of payment applications
   2. Loyalty or reward programs
   3. Public transportation fares
   4. Secure Internet access for e-commerce

CGI: Please describe the scope of Everlink’s Chip Services?

LD: As an active participant on the Interac EMV committee, with SCD certification, as well as a select member of the VISA, Mastercard, AMEX Multilateral K-W Chip Trial, Everlink is well prepared to deliver a comprehensive suite of products and services to our clients, enabling them to take advantage of the numerous benefits that Chip Technology offers.

Everlink is working closely with EMV Chip stakeholders to maintain our position as a Chip industry leader based on the development of innovative functionality and applications, such as:

• EMV Chip Transaction processing – Interac Certified
• EMV translator process
• PIN management services
• Key management services
• PIN change at ATM
• Smart Card Management System (SCMS) interface
• Settlement services
• Offline & stand-in EMV processing
• EMV Chip CAF data interfaced to SCM

CGI: You mentioned the Multilateral K-W Chip Trial in your last answer. Can you please elaborate on the current Kitchener-Waterloo (K-W) Chip trial in progress and its consequent benefits?

LD: First, I will provide your readers with a brief introduction to the K-W Chip Trial.

This trial of chip cards and terminals was designed to support the adoption of chip card technology across Canada. Everlink is one of the select members of the current Multilateral Kitchener-Waterloo Chip Trail, which is providing us with invaluable hands-on experience in implementing chip solutions. The K-W area was selected for the trial because of its size, demographics, and proximity to the Greater Toronto area where most of the participating institutions are located.

In addition to Interac Association, MasterCard Canada and Visa Canada, we will have representation from financial institutions (banks and credit unions), processors and merchants participating in the trial.

The trial is an opportunity to test the interoperability of all contact chip systems and devices. Using a defined area focuses these activities by containing the number of cards and devices. This will allow us to measure the effectiveness of operational and customer/ merchant experiences in a controlled environment thereby ensuring a smooth transition to chip technology for all participants.

I’m pleased to hear that Mennonite Savings & Credit Union Ltd., as an RFS user in the K-W area, has agreed to be CGI’s RFS pilot credit union for chip technology. This should work out well since they have been kept in the loop with the other FIs in their region.

CGI: Can you share with our readers the important timelines for Chip Migration in Canada?

LD: Timelines have already been established by each Network or Scheme for Canada’s Chip migration.

• Interac Chip migration requires that:
  • Sixty-five (65%) of debit cards must be Chip-enabled by 2010.
  • All debit cards using the Interac network must be Chip-enabled by 2012.
  • All ATMs connected to the Interac network must be Chip-enabled by 2012.
  • All POS devices connected to the Interac network must be Chip-enabled by 2015.
• Visa liability shift:
  • As of October 2010, liability will shift to non-Chip compliant entity in fraudulent transaction. (acquirer or issuer)
• MasterCard’s position:
  • Working with twelve card issuers and five leading acquirers in Canada to introduce Chip by 2010.

I am proud to state that Everlink’s CyberGateway solution already has three Chip-enabled ATMs in production to date!

CGI: Thank you Gentlemen for your time and thoughts on Chip technology. Do you have any concluding remarks?

PK: In closing, I would like to thank you for giving us the opportunity to share our thoughts on this exciting new innovation to the payments industry. As a leader in the dependable delivery of electronic transactions – regionally, nationally and globally, I invite your readers to funnel any inquiries on through their CGI Account Manager to take full advantage of CHIP Technology with Everlink.

FOR MORE INFORMATION AND DETAILS

Please call or email the Everlink Customer Relations Department:

Peter Kalogiannides, Vice President -- Customer Relations, Sales & Marketing
Direct: 905.946.5899
Peter.Kalogiannides@Everlink.ca

Director, Business Development:
John Fisher
Cell: 416.818.9535
John.Fisher@Everlink.ca

Strategic Account Managers:
Steve Mott
Cell: 604.999.5934
Steve.Mott@Everlink.ca

Darlyn Thompson
Cell: 416-522-3539
Darlyn.Thompson@Everlink.ca