National Smartcard Project

1. National Smartcard Project Work Package 8 – Card Governance Report

2. Card Governance Report • Format of report: • Executive summary • Introduction • Main body of report (12 sections) • Appendix 1: Glossary • Appendix 2: Contract law guide • Appendix 3: Sources

3. Executive Summary The Executive Summary sets out: • what is considered in the Card Governance report: • i.e. the legal issues connected with the card governance aspects of a Scheme, including the establishment and operation of a Scheme and the way in which such issues can be managed through contract; • a summary of the conclusions reached in each section of the Card Governance report; • References to the applicable legislation.

4. Introduction The Introduction explains: • the purpose of the report; • the parameters of the report; • The assumptions that have been made in order to draft the Card Governance report. Please note that the report should be read in conjunction with the Introductory Report and the contract law guide in Appendix 2.

5. Project administration and Smartcard Scheme administration • Introduction to the three phases of a Scheme: • The Development Phase • The Implementation phase • The Operational Phase • Detailed discussion of the three phases of a Scheme • Contract structure options: • Card Issuer / prime contractor contract • Card Issuer / individual supplier contracts

6. Physical Smartcard and Reader issues • Design and development of Cards and Readers: • Discussion of the technical standards to be applied • Ensuring accessibility and reliability • Quality control and quantity: • Ensuring that supply meets demand • Contractual considerations • Branding considerations • Health and safety rules: • The Health and Safety at Work Act 1974

7. Accessibility • The Disability Discrimination Act 1995: • The scope and requirements of the Act • Important concepts under the Act • Direct discrimination • Failure to make adjustments to a service • Definition of a “disabled person” • Relevant codes of practice • Exclusions and defences • Enforcement

8. Accessibility • Application of disability discrimination rules and guidance to a Smartcard Scheme: • Design considerations – Smartcard and Reader • Customer support • Web sites: • Scope and application of the W3C Guidelines • Location of Readers • Cost issues • Language issues

9. Software Applications • Issues surrounding the use of a multi-application Cards in a Scheme: • Technical standards • Adherence to standards • Ensuring technical capability of Cards • Interoperability • Ownership • Card Issuer Software Applications • Secondary Service Provider Software Applications • Card Issuer/Secondary Service Provider contract terms

10. Software Applications (continued) • Management of Software Applications • Description of the management activities required • Responsibility for management activities • Data issues • Importance of data segregation • Financial Software Applications • Credit / debit card functions • Open e-purse function • Interoperability issues

11. Voluntary / Mandatory Schemes • Types of Smartcard Scheme: • Voluntary • Genuine option to apply • Availability of alternative delivery channels • Mandatory • Consideration of statutory powers • Application to private sector Software Applications • Hybrid • Application to public-private Smartcards • Social exclusion and accessibility issues

12. Interoperability of a Smartcard Scheme • Technical interoperability • Common standards • Achieving interoperability through contracts between: • Card Issuer and Card User • Card Issuer and the Card Issuers of other Schemes involved • Obtaining services • Branding • Costs

13. Ownership of Smartcards • Ownership considerations in relation to: • The physical Smartcard, as between: • Card Supplier and Card Issuer • Card User and Card Issuer • Secondary Service Provider and Card Issuer • Data stored on a Smartcard • Obligations under the Data Protection Act 1998

14. Individual applications for a Smartcard • The application form • Methods of obtaining and completing the form • On-line applications • Through interview • Contents of form • Accessibility • Data protection issues • Identity verification • Evidential requirements • The e-Envoy guidelines (2003) • Obtaining and processing evidence of identity • Replacement Smartcards

15. Individual applications for a Smartcard • Formation of contract between Card Issuer and Card User • Terms and conditions • Contracting with minors • Data protection considerations • Application and scope of the Consumer Protection (Distance Selling) Regulations 2000

16. Card User Verification • Methods of verifying Card Users after the Card has been issued: • Passwords • PINs • Trusted third parties • Biometric information • DNA • Fingerprints • Iris / facial recognition • Consequences of failure to verify

17. Card replacement, cancellation and withdrawal • Lost and stolen cards: • Procedure for reporting • Disabling functionality of Cards • Continued access to services • Contractual issues • Cancellation and withdrawal of Cards • Definition of terms • Contractual issues • Responsibility for managing procedures relating to replacement of Cards

18. Misuse and liability • Three types of misuse by Card User: • Use of Card to obtain services to which Card User not entitled • Use of Card to provide false information to third parties • Use of Card in breach of terms and conditions of contract with the Card Issuer • Misuse by a third party • Potential consequences of misuse • Liability for misuse

19. Competition Law • Application of competition law to a Smartcard Scheme • Overview of main provisions of the Competition Act 1998: • Chapter I prohibition • Agreements between undertakings which have as their object or effect the prevention, restriction or distortion of competition in the UK • Chapter II prohibition • Abuse of a dominant position in the marketplace • Restraint of trade: the common law

20. Appendices • Appendix 1 • Glossary of terms specific to the Card Governance report • Appendix 2 • Contract Law Guide: A brief summary of the law of contract, which provides a backdrop to the rest of the report • Appendix 3 • A list of primary and secondary source materials