Complying With New Smart Card Standard

Cadmus Takes Lead in Complying with New Smart Card Standard

Local Company takes “EMV” Technology to International Markets

Cadmus Technology Limited (NZSE: CTL) today announced that it is the first New Zealand EFTPOS terminal manufacturer to meet the latest “EMV” (Europay, Mastercard and Visa) smart card certification standards.

To date, fewer than ten percent of terminal vendors worldwide have achieved the Level 2 EMV compliance (Version 4) standard. As testing is conducted on a software application kernel, the Company can incorporate the technology into all terminals in its range, including those designed for the mobile, pre-pay and fleet management markets.

“In March, the Company announced it had received EMV hardware certification for its products,” says Cadmus Managing Director, Ian Bailey.

“This announcement, however, confirms that Cadmus has completed the second part of that standard, is fully EMV certified and meets the stringent international Smart Card standards. The technical advancement will ensure greater security of card payments for both retailers and consumers – and also enable a new generation of smart card products to be promoted by banks world-wide.”

ETSL, New Zealand’s largest processor of EFTPOS transactions, in conjunction with its member banks, has advised all terminal vendors that, from August, the EMV standard is a requirement for all new EFTPOS terminal certifications for connection to its network. EFTPOS terminals, previously certified, may continue to be used, however it is being contemplated that all terminals will migrate to ones which incorporate the new security standard, Triple DES (“Data Encryption Standard”) and EMV over the next few years.

The establishment of the EMV standard will also require many users of the world-wide installed base of approximately 35 million terminals to replace, or upgrade their current terminal to the EMV compliant devices.

Cadmus expects to see a surge in both domestic and export sales of its payment solutions as the EMV standard is implemented by banks throughout the world. Based on recent reports it has been confirmed that the international market, for standalone and mobile/wireless EFTPOS terminals, continues to grow by an average of 20% over the last 3 years – partially due in part to the migration to the EMV regulations.

“We are already shipping products that meet this standard and to date it has enabled us to increase our market segment share in the Asia Pacific region – a primary export focus for our Company,” adds Bailey.

The Asia Pacific market for payment terminals is more than 950,000 terminals per annum with an installed base of over 4 million terminals – most of which will need to be upgraded in the coming years. Worldwide, sales are in excess of 6,100,000 terminals per annum, with an installed base of over 35,000,000 terminals (The Nilson Report, Sept ’02), and it is estimated that a high proportion of these will need to be replaced/upgraded over the next few years.

The Company is already shipping EMV compliant terminals to its New Zealand market base - with many of its dealers requesting EMV compliance now as a pre-requisite.

In March, Cadmus also announced an agreement with Australian Company, Card Services Australia Pty Ltd to supply its new Cadmus CPO2 SCR Pin Pad – complete with EMV capability (Europay, Mastercard, Visa). Deliveries have already started to meet this order, and sales continue for the high-end AC4500G product to Cadmus’s Australian customers (customised by Dial Time Pty Ltd), to offer the merchant mobile phone top up, bill pay and CRM functionality.

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