StepNexus Services is supplying two factor MasterCard Chip Authentication Programme (CAP) applications to protect Kreditkort Iceland customers
in Europe’s first commercial post-issuance service.

Reykjavik, Iceland – November 6, 2006 – Kreditkort Iceland, the provider of MasterCard Debit and Credit services to Icelandic banks, announced today the commencement of Europe’s first commercial post-issuance provision of enhanced security. With more than 70,000 cards already in circulation, this will enable MasterCard cardholders the ability to easily upgrade their existing EMV card with two-factor Chip Authentication Programme (CAP), which provides PIN-based verification of cardholders conducting online transactions through the use of a card reader.

This announcement brings re-assurance to the banking industry where the current rate of home internet users doing online banking remains at 50%, with security the main concern of users according to the British Computer Society*. This new service will enable additional protection without having to issue a new card. By utilising the online application generation service of StepNexus, Icelandic MasterCard cardholders are able to drop-in to the bank branch, have their card loaded with CAP, pick-up a two-factor card reader and receive a brief lesson in using the card and reader for eBanking, all within five minutes. A phased offering from Kreditkort will see cardholders immediately offered a drop-in service followed up in 2007 with the ability to upgrade cards at ATMs.

The solution is a combination of three core competences in the smart card market:

(i) Kreditkort Iceland’s existing expertise in issuing multi-application smart cards with Chip & PIN (EMV) functionality and retail loyalty based on MULTOS, and their ability to deliver new content to cardholders.

(ii) The Secure Trusted Environment Provisioning or “STEP” secure package technology provided by StepNexus and implemented on MULTOS, to allow smart card applications such as CAP (Chip Authentication Programme) to be pre-personalised with cardholder personal data, assembled into a STEP secure package, and sent in a single message to a target cardholder’s card via any network, including the internet and ATM for local download.

(iii) A new web-enabled smart card data preparation service operated by StepNexus that enables StepNexus Services Partners such as Kreditkort Iceland to supply encrypted cardholder data files to StepNexus Services over the web, for packaging of cardholder’s chip application code and data into a secure package that can be downloaded post-issuance.

Ragnar Önundarson, Managing Director, Kreditkort Iceland stated: “Kreditkort has once again demonstrated its leadership in the card payments market. Benefiting from our card platform choice of MULTOS and working with StepNexus, we are now providing a superior experience to our customers, offering on-demand services to complement our re-issuance rollout of improved eBanking services. There is no better way of protecting the customer.” We expect to see this on-demand offer being taken up by both the technically literate cardholders but also by the cardholder who will appreciate the offer of some education about eBanking.”

”MasterCard Chip Authentication Programme (CAP) for two factor authentication is being widely adopted by our members. The possibility to dynamically add CAP to existing cards in the field opens up the possibility for our members to enhance their chip value proposition in a number of ways not considered until now,” said Toni Merschen, Group Head, Chip MasterCard Worldwide.

John Wood, CEO of StepNexus commented, “Kreditkort Iceland’s post-issuance project employing STEP on MULTOS is a strong proof point of the advantages of STEP technology for device provisioning, and validates our strategy of diversifying the services StepNexus offers its partners to include chip data preparation. This is an exciting opportunity for our partners and the industry.”

*British Computer Society research August 2006

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About Kreditkort hf Iceland:

Kreditkort hf. was founded in 1980 and is a leader in payment solutions in Iceland. Kreditkort is the Principal Member of MasterCard in Iceland, issuing MasterCard credit cards, multi-currency B2B cards and supports Icelandic banks issuing MasterCard credit cards and Maestro debit cards.

Kreditkort hf. is also known for innovative solutions when it comes to servicing merchants that accept MasterCard, Maestro, American Express, JCB and Diners Club cards.

About StepNexus:

StepNexus enables a new era of secure services by providing pioneering technology solutions for securing devices and distributing protected content. StepNexus governs the STEP™ (Secure Trusted Environment Provisioning) standard methods for secure device issuance and control, secure package content loading and distribution, and application privacy management. StepNexus offers services and products associated with STEP and STEP-enabled platforms. StepNexus ensures that devices meet specific security and interoperability requirements necessary to receive STEP security validations.

StepNexus has more than 100 issuance partners and has enabled more than 65 million STEP-secured devices among governments, financial institutions, mobile carriers, and enterprise IT organizations, including the Hong Kong National ID, Saudi Residential ID, Turkish Military ID, and Kaohsiung City Government Transit Project.

StepNexus works with partners that implement device operating systems and applications meeting STEP specifications, including Nectar.NET implementers, the industry-backed MULTOS Consortium, and other STEP-enabled solution providers.

For more information visit www.stepnexus.com or http://services.stepnexus.com

About MULTOS™:

MULTOS is the world’s leading open standard multi-application Operating System for smart cards, whose development is overseen and provided by a consortium of 16 smartcard and silicon manufacturers, payment schemes, card management system providers, and integrators. A range of applications including payment, authentication, digital identity, biometrics, loyalty, and contactless ticketing may securely co-reside on a MULTOS powered chip.

MULTOS cards utilize the STEPTM (“Secure Trusted Environment Provisioning”) standard for secure device issuance, in-field update, and third-party privacy assurance More than 65 million MULTOS smart cards that have been issued in over 30 countries in projects providing banking, national identity, ePassport, campus security, secure ID and transit. For more information, visit www.multos.com