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EMV: transforming the payment experience

EMV: transforming the payment experience. William Tran, Marketing Manager, Secure Transactions with Gemalto Lori Breitzke, North America Marketing, VeriFone. Today’s agenda. What is EMV? Why EMV? When is it coming to the U.S.? How will EMV change the POS? B&M Online Mobile capabilities

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EMV: transforming the payment experience

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  1. EMV: transforming the payment experience William Tran, Marketing Manager, Secure Transactions with Gemalto Lori Breitzke, North America Marketing, VeriFone

  2. Today’s agenda • What is EMV? • Why EMV? • When is it coming to the U.S.? • How will EMV change the POS? • B&M • Online • Mobile capabilities • Transaction & Process changes due to EMV • Questions & Answers

  3. Gemalto

  4. What is EMV?

  5. What is EMV? • Global standard for chip card and mobile payments • Developed by Europay, MasterCard and Visa in 1993 • Typically a chip inset within a plastic card • Much more secure than magnetic stripe cards CONTACT OUTSIDE EMV chip cards use an embedded microprocessor for payment transactions INSIDE • Secure chip stores payment information • Chip card authentication prevents counterfeiting • Adds cardholder verification methods • Offers online or offline authorization

  6. EMV is the Gateway to Digital Payments 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  7. EMV Contact & Contactless Cards Mag-stripe on the back Contactless Antenna inside EMV chip

  8. The Payment Ecosystem is Rapidly Evolving

  9. EMV Enables Contact, Contactless and Mobile EMV contact – card is placed into a device that reads the data on the chip Sometimes PIN is omitted and a signature is required. Enter individual PIN code. The card checks the PIN stored on the card. Contact Payment Terminal NFC-enabled phone NFC mobile payments – provides secure mobile payments, increased loyalty and marketing options for issuers EMV contactless payments – simply tap the card and pay securely 2 inches Contactless Payment Terminal Contactless Payment Terminal

  10. How it Works • Online and offline authentication validates that the card is authentic • Uses cryptography and the chip’s microprocessor • Protects payment system against counterfeit cards • Can take place online, offline, or both • Online and offline transaction authorization • Authorization provides approval for the transaction based on issuer parameters • Online authorization includes transaction-specific cryptogram • Offline authorization is completed by EMV card and payment terminal • EMV can require online authorization for every transaction • EMV supports four methods for verifying the Cardholder • Online PIN • Offline PIN • Signature • No CVM Source: EMVCo

  11. Why EMV?

  12. EMV Reduces Fraud • 2008 – 2010: Canada noticed increased peaks of fraud due to holiday season • 2011: No spike in fraud due to holiday season • As EMV penetration at POS increased, counterfeit as well as other types of fraud decreased Source: MasterCard Analysis 2012

  13. Annual Fraud Losses on UK-Issued Cards (Pounds MM) EMV is introduced Source: http://www.financialfraudaction.org.uk Source: MasterCard Analysis 2012

  14. EMV Provides Global Interoperability AFRICA, THE MIDDLE EAST 17.6% of cards 60.7% of terminals ASIA PACIFIC 27.0% of cards 43.0% of terminals CANADA, LATIN AMERICA, CARRIBBEAN 31.2% of cards 76.5% of terminals EUROPE ZONE 1 73.9% of cards 89.0% of terminals EUROPE ZONE 2 12.7% of cards 6.4% of terminals UNITED STATES Source: EMVCo

  15. When is emv coming to the u.s.?

  16. 687 Days: U.S. EMV Migration Milestones 1 Liability for counterfeit transaction shifts to terminal owners if they don’t accept EMV 2 Liability for counterfeit transaction shifts to party who has least-secure support

  17. The Two Largest Payment Card Markets in the World are Migrating to EMV It typically takes 5-6 years to cover the majority of the market in a given country

  18. VeriFone

  19. How will emv change the pos?

  20. How will the payment experience change? • Brick & mortar • BranchesIn-Store • Online • e-commerce • Mobile • Micro/Macro

  21. How will the B&M Payment experience change? • At the POS • Device will prompt consumer to “insert card” • Amount has to be entered prior to card insertion • Processing time may be longer • Industry Stakeholders • Longer certification process • Stronger payment security • For the Consumer • Consumer may be prompted for more data after the card is inserted • Card will need to be kept in the device the entire time the transaction is being processed

  22. U.s. transaction view – today & future Host Processing MAG-STRIPE DELIVERY Fraud/Velocity Check Mag-stripe Validation Open to Buy Check Card Swipe Clerk Data Entry/ Amt. Other Send to Host Response From Host Approval/ Decline Message Receipt Printing Terminal Processing Host Processing EMV CONTACT CardholderVerification CVM) Terminal RiskManagement Terminal Analysis/ Decision Offline Data Auth. Application Selection Processing Restrictions CardValidation Fraud/VelocityCheck Open to Buy Check Clerk Data Entry/ Amt. Other Card Insert Response From Host Approval/ Decline Message ReceiptPrinting Remove Card Send to Host Terminal Verification Results (TVR) Host Processing Card Processing Terminal VerificationResults (TVR) Terminal Analysis/Decision EMV CONTACTLESS CardValidation Fraud/VelocityCheck Open to BuyCheck Clerk Data Entry/ Amt. Other Card Tap Send to Host Response From Host Approval/ Decline Message Receipt(may not be required)

  23. Transaction times comparison DIAL DIAL WITH EMV

  24. Market Solution Certification Changes • Certification Criteria • Level 1, Level 2 Certifications • Brand testing, individual tests vary by scheme • Each brand has their own specification (based on EMVCo) • Contact and Contactless testing require specialized tools • Tools updated frequently to provide necessary scheme simulation • Results of New Criteria • Certification will take more time to accomplish at the acquirer levels • Ongoing certification work must be maintained for solutions • Ongoing investment is required to keep up to date on tools and certification process • Specialized training will be required to accomplish this new solutions delivery

  25. Field Upgrades, How EMV is Different • Today • Devices are deployed, and in some cases, not touched for years • Merchants are reluctant to be reprogrammed, to give time for the activity • Infrastructure (dial lines, ..etc) not setup to handle large downloads • Tomorrow, EMV Challenges (Contact and Contactless) • EMV components, kernels for contact and contactless can and will change • New cards issued with new functionalities happen, require downloads to accept the card • Interoperability will be impacted if devices are not kept up to speed • Contactless software components, EMV and for NFC initiatives, will require updates and changes to remain field-ready for new cards

  26. Merchant Decisions for the U.S. • Stand Alone Devices • Customer total amount verification, EMV card insertion, and Contactless tap • Speed of transaction • Hand over, external pin pad (with Contact/Contactless/Mag-stripe Delivery support) • Integrated • Customer facing, Communication options, USB, RS-232, IP • Register software changes to drive the device differently (Amount first, no walk up and swipe) • Semi-Integrated • Light cash register integration • Direct to host for processing, removing register knowledge of EMV or transaction data

  27. VeriFone Solutions

  28. EMV CAPABLE DEVICES – VX & VX EVOLUTION SOLUTIONS Countertop series Vx 570 VX 520 Portable series Vx 610 Vx 670 VX 520 VX 680 Consumer Facing series Vx 810 VX 820 VX 805

  29. EMV CAPABLE DEVICES – MX SERIES SOLUTIONS MX 800 series MX 900 series Consumer Facing series MX 850 MX 860 MX 915 MX 870 MX 880 MX 925

  30. More information • To learn more about EMV and VeriFone’s hardware, software, training and support solutions that can smooth the EMV migration process, please go to www.verifone.com/emv-us and www.verifonezone.com.

  31. Thank you

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