By Jean-Christophe Doucet
New generations of prepayment utility meters still have a slot, but it is a smart card slot, suitable to accept a generic chip-based payment card such as many people now have in their wallet. Europay, Mastercard and Visa have paved the way for chip-based credit cards around the world. Prepayment residential meters can directly accept these cards. Alternatively, the smart card slot in the meter can accept proprietary cards that the utility company can issue – and sell – to its customers, allowing full control of the smart card issuance and collection of money from its customers, independently from any bank or financial organisation.
In spite of the fact that the first prepayment utility meters hit the market a long time ago, it is still an emergent market, primarily because smart card technology in this application is relatively new. Market research organisation IMS Research forecasts a major growth of prepayment utility meters, in particular in Europe, Middle East and Africa (EMEA) and Asia. Whereas IMS Research estimated this market to be roughly 2 million units in 2004, this number is clearly about to take off, with some upcoming deployments identified in some key countries: In EMEA (in particular Turkey, Nigeria, South Africa) several prepayment programmes for gas, water and electricity meters are going to represent several millions of units by 2010. In Asia, IMS Research indicated that hybrid domestic meters (mechanical water with built-in electronic registers, AMR or prepayment) accounted for 4.1 percent of residential meter shipments in 2004 and shipments of these are forecast to almost double by 2009.
A MUST: THE EMV INTERNATIONAL STANDARD:
Smart cards are ubiquitous, and this is today’s most proven, secure, reliable, and cost effective solution to manage sensitive applications such as payments. Transactions went electronic a long time ago, and smart card technology is now making them secure. Three major financial institutions – Europay, Mastercard and Visa – teamed up to establish an international standard that defines how a payment card – debit or credit – must operate, as well as what acceptance terminals must do in order to accept or “read” such cards. Acceptance terminals include utility meters, point-ofsales (POS), vending and ticketing machines, and more generally any device or payment slot that is meant to accept a chip-based customer payment card. This international specification, known as EMV, has now reached revision 4.1. It is largely based on the generic smart card international standard, namely the ISO 7816-3/4 specification, which covers electrical and protocol layers with smart cards.
The primary goal of the EMV specification is to guarantee interoperability between payment cards and terminals everywhere in the world. Unlike with the ISO 7816, any payment terminal or payment slot targeting EMV applications and markets must not only feature a smart card reader slot compliant with the EMV 4.1 specification, but also has to be formally tested by an independent EMVaccredited laboratory. Upon successful testing of the card acceptance device, the EMV laboratory will issue an official “type approval.” Obtaining this “stamp” is mandatory to addressing EMV markets. For designers and engineers, this EMV testing milestone is a major headache that can easily turn into a nightmare: Prior to the type approval, there is usually a preliminary pre-testing campaign in the same EMV lab, to verify the performance of the terminal against EMV. When designers have developed their own smart card reader from off-the-shelf generic microcontrollers, this pre-testing exercise often becomes a debugging session that can take weeks or even months. With between 500 and 1,000 EMV tests only to verify the protocol when communicating with the smart card, engineers often spent long hours fine-tuning their embedded firmware at the EMV lab. On the hardware side, electrical testing can also get tricky, with less room for last minute adjustments. Overall, this time spent at the EMV lab incurs costs that come in addition to the EMV type approval fees, and making the overall R&D cost significant for many companies.
Manufacturers of prepayment utility meters who want to address international markets must support the EMV payment scheme. As a result, prepayment slots in utility meters typically fall into the category of terminals that require a formal EMV type approval for EMV level 1 (protocol and electrical).
In terms of integrated circuit solutions, there are few technical options available in the market that combines seamless EMV compliance and approval, easy integration into a customer’s platforms and affordable cost. To address these concerns, integrated circuits have been developed that take care of the whole EMV level 1. Such solutions are based on a high performance, optimised 8-bit 80515 core controller and feature a built-in EMV 4.1 interface and a dedicated UART (a hardware digital block designed to meet the various requirements of ISO-7816 and EMV). These chips interface with the external world through a generic asynchronous UART. But more importantly for prepayment terminal markets, are devices that offer an “EMV-in-a-can” package. This package consists of a turnkey embedded firmware stack that enables the device to become a self-contained smart card reader IC that is immediately usable – and testable by any EMV laboratory. Integration into the meter design (i.e. interaction with the host processor of the utility meter) can be done seamlessly with sample code for the driver: This allows the host application to access some high level smart card access functions, again in full compliance with the applicable standards without worrying about painful low level protocol and electrical compliance.
Chips programmed with a turnkey firmware stack form a ready-to-use EMV level 1 solution. In today’s world where time-to-market is critical, this solution allows customers to dramatically accelerate their design cycles, and to submit their EMV prepayment module within a few weeks.
WHAT ABOUT PROPRIETARY (NON-EMV) PREPAYMENT SCHEMES?
In the utility prepayment world, EMV is not the only option by far. There are many countries where EMV payment card deployments have not started. In some emergent countries in the Far East, Africa and South America, most people do not have payment cards anyway. And many utility companies would rather collect the money directly, without relying on a financial organisation. The solution for them is to implement a proprietary payment scheme. This can typically be by means of a smart card that is owned by the utility company, which is then given to the user when he subscribes to a service. Once at home, a user will have to insert the card into his meter and type in a PIN code to access to a certain amount of electricity, water or gas. The user will have to “refill” his account on a regular basis as he uses his credit. The beauty of smart card technology is that it allows an endless choice of implementations. The “refill” mechanism is up to the utility company. It can be done remotely – provided there is a communication channel between the meter device and the external world – or the user can do it over the phone, or he may be forced to go to a retail store to refill his account. One thing is sure, the smart card is the only technology that brings almost unbreakable security (fraud is almost impossible at the card level), and at a very low cost. In such proprietary payment schemes, requirements differ from one country to another and from one utility company to another. Some meter manufacturers have developed their own complete solutions (including the reader slot and the smart card itself that they can sell to the utilities).
CASE STUDY - NEW MANAS PREPAYMENT MODULE
In 2007, MANAS, a Turkey-based designer, manufacturer and distributor of smart card-based payment and prepayment systems, decided to redesign its “G4” prepayment add-on module usable in conjunction with a wide range of utility meters. The unit can support the EMV requirements, as well as MANAS’ proprietary prepayment solution Payflex Smart- Card Token.
MANAS selected Teridian Semiconductor’s 73S1210F IC, with on-chip lockable Flash memory – one of the few ICs to offer turnkey EMV level 1 and the only company with an onchip Flash offering, especially in this low price range. Flash memory allows re-programmability in the field (i.e. directly in customer’s board).
MANAS’ new generation G4 prepayment modules have been available since October 2007, and are already poised to succeed in Turkey and in international markets. In October 2007, Manas manufactured and deployed the first batch of domestic type G4 gas meters equipped with EMV certificated smart card readers for IGDAS (Gas Distribution Company of Istanbul). This is the first stage of prepayment meter deployment for IGDAS, which is one of the largest gas distribution companies in Europe with 3.5 million customers.
OPEN PLATFORMS AS A MEANS TO CARRY ANY TYPE OF APPLICATION FIRMWARE
When designing electronic boards that are processor-based, each manufacturer brings its own added value through multiple hardware/firmware features and capabilities. In electricity prepayment meters, there is typically a main processor or ASIC that contains the embedded firmware that is, in essence, where most of the added value sits. Prepayment is often supported in the form of a separate module or circuit, as described above. Solutions that can act as a separate processor responsible for prepayment make smart card access a very straightforward solution. Alternatively, and in particular in gas, water or even heat meters, the host controller device is typically a generic microncontroller that takes care of the measurement. Smart card reader controller solutions that are designed as an open platform can advantageously replace this generic microcontroller and provide the prepayment slot as an option, with the EMV level 1 firmware stack.
Smart card technologies are a key enabler in the evolution of secure e-Payment and e-Identity applications. Until now, e-Payment applications primarily consisted of POS terminals, an application that has been served with multiple generations of smart card reader, modem and Ethernet devices. With e-Payment applications now including new services such as e-Banking and secure transactions over phone and Internet, proliferating e-Identification applications are allowing governments, corporations and other organisations deploying smart-card based IDs to authenticate users, grant access and manage credentials over private or open networks.