philip andreae presentation

u-commerce & Smart CardsLeading the New World of Payments

Philip Andreae11 June 2003

u-commerce & Smart CardsLeading the New World of Payments

Philip Andreae11 June 2003

VISA CANADA CONFIDENTIAL

anywhere, anytime, any wayanywhere, anytime, any wayanywhere, anytime, any wayanywhere, anytime, any way

VISA CANADA CONFIDENTIAL

How do you

want to pay?

Visa Debit

Visa Credit

u-Commerce and Payments

VISA CANADA CONFIDENTIAL

Bricks & MortarCommerce

Bricks & MortarCommerce

Bricks & Mortar Commerce

Bricks & Mortar Commerce

e-comme-comm

Bricks & Mortar Commerce

Bricks & Mortar Commerce

e-comme-commm-commm-comm

Bricks & Mortar Commerce

Bricks & Mortar Commerce

e-comme-commm-commm-comm

“x”-comm“x”-commu-commerceu-commerce

Bricks & Mortar Commerce

Bricks & Mortar Commerce

e-comme-commm-commm-comm

“x”-comm“x”-comm

The Commerce Universe

VISA CANADA CONFIDENTIAL

Early Indicators

VISA CANADA CONFIDENTIAL

! pervasiveness of technology

! growth of wireless

! increasing bandwidth & connectivity

Market Drivers

VISA CANADA CONFIDENTIAL

How do you

want to pay?

Visa Debit

Visa Credit

The Building Blocks

StandardsSecuritySystems

Simplicity

VISA CANADA CONFIDENTIAL

U-Commerce is enabled by the Chip Card

VISA CANADA CONFIDENTIAL

What Is a Chip Card?

■ A plastic credit card with an embedded computer chip containing a microcomputer

■ Yesterday a Calculator in your Card

■ Today a IBM PC

VISA CANADA CONFIDENTIAL

Background – Visa 1988 – EMV 1993

The international schemes decidedSmart Cards are the way forward

Europay, MasterCard Visa International developed a joint EMV Integrated Circuit Card Specifications for

Payment SystemsFraud ControlFraud Control

Credit Risk Credit Risk ManagementManagement

Cost ReductionCost Reduction

Value Added Value Added ServicesServices

VISA CANADA CONFIDENTIAL

Why Now

■ Increases Security & Privacy –Virtually impossible to copy–Support the evolution of security

techniques

■ Combats Fraud–Rising cost of fraud–The increasing risk of fraud migration–The high cost of Fraud Management

VISA CANADA CONFIDENTIAL

To Assure the Future

CORE:CORE:Credit and Debit Credit and Debit

TelephoneTelephoneTransitTransit

StoredStoredValueValueAuthenticationAuthentication

ElectronicElectronicBankingBanking

AccessAccessControlControl

LoyaltyLoyaltyElectronicElectronicCommerceCommerce

Payment Services:Payment Services:Debit/CreditDebit/Credit

VISA CANADA CONFIDENTIAL

Chip Cards – powerful and versatile

■ Increases Security & Privacy

■ Combats Fraud

■ Increased Utility

■ Greater Efficiency

Preserving Confidence in the Payments System

VISA CANADA CONFIDENTIAL

Broad International AcceptanceCountries that have EMV by March 2003

■ Austria■ Belgium■ Denmark■ France■ Great Britain■ Greece ■ Italy■ Luxembourg■ Netherlands■ Sweden■ Switzerland

■ Australia ■ Brazil■ Canada■ Japan■ Mexico■ New Zealand■ Peru■ South Korea■ Taiwan■ United States■ Venezuela

■ Egypt■ Israel■ Jordan■ Kazakhstan■ Kuwait■ Latvia■ Lebanon■ Palestinian Territories■ Poland■ Romania■ Russian Federation■ Turkey■ United Arab Emirates

VISA CANADA CONFIDENTIAL

Broad International Acceptance

■ Over 100 million Visa chip cards (EMV)

■ Millions more Visa chip cards are issued every month

■ Est. 3.4MM chip devices deployed out of 20MM worldwide (2.9MM during year 2002)

■ VisaNet can process full chip data

■ The VIOR has been modified to Support Chip

Projection: 42% of Visa volume will be chip-based by 2006Projection: 42% of Visa volume will be chip-based by 2006

VISA CANADA CONFIDENTIAL

Visa Chip Cards evolved from Issuer-centric toIssuer-enabled, consumer-centric…

" Preserve existing infrastructure

" Enable Issuers to focus on core business

" Allow parties to maintain control of their current programs and environments

" Easy and convenient for the consumer to use

" Easy to incorporate into existing programs

" Easy for all parties to implement

VISA CANADA CONFIDENTIAL

The Goal - Serve the Unit of One the Cardholder

■ Lifestyle

■ Values

■ Convenience

■ Simplicity

■ Control

VISA CANADA CONFIDENTIAL

u-Commerce drives Visa’s Vision